Methodology: How HomeScope Models Property

The calculator is transparent about its formulas. Here is every assumption behind it.

Loan repayments

For principal and interest we use the standard amortising formula: M = P × [r(1+r)^n] / [(1+r)^n − 1]. For interest-only, the annual interest is the effective balance × the annual rate. An offset balance reduces the interest-bearing balance.

Rent and yields

Gross annual rent is weekly rent × 52. Effective rent is weekly rent × occupied weeks. Gross yield divides annual contractual rent by purchase price; effective yield uses the vacancy-adjusted figure.

Cash versus taxable

Cash expenses add interest, principal, operating expenses, repairs and non-financed cash. Estimated tax deductions add interest, deductible operating expenses, borrowing costs, capital works and depreciation. The taxable result is assessable rent minus estimated deductions.

We deliberately do not model the tax effect as loss × marginal rate. Instead we compute tax without the property, then with the rental result, and subtract the two. This respects tax brackets.

Weekly contribution

The absolute annual negative cash flow, divided by 52. This is the first number you see — before any tax benefit is promoted.

Break-even growth

We simulate the holding period, then binary-search the annual capital growth rate at which the indicative investor outcome equals zero, between −10% and +20% at 0.01% accuracy.

Honest limits

We never invent tax brackets or suburb statistics. Unverified values are displayed as unknowns. All results are estimates that depend on your assumptions — it is not advice.