Property Investment Metrics Glossary (AU)
A quick-reference glossary of every metric Australian property investors need: yield, LVR, DSCR, cash-on-cash, IRR, equity, NOI, and more — with formulas and examples.
Quick-reference definitions for the metrics that matter to AU property investors.
Gross rental yield
Annual rent / property value × 100. Quick screening metric, ignores costs.
Net rental yield
(Annual rent − operating expenses) / property value × 100. True income return.
NOI (Net Operating Income)
Annual rent minus operating expenses, before financing costs and tax. Used to calculate net yield.
LVR (Loan-to-Value Ratio)
Loan balance / property value × 100. Banks generally lend up to 80% LVR without LMI; 90–95% with LMI.
DSCR (Debt Service Coverage Ratio)
Annual NOI / annual loan repayments. A DSCR > 1.0 means the property covers its own loan. Common bank target: 1.25+.
Cash-on-cash return
After-tax annual cash flow / cash invested × 100. The actual return on the money you put in (deposit + acquisition costs).
IRR (Internal Rate of Return)
Annualized rate of return that makes the NPV of all cash flows zero. The gold-standard measure for comparing investments with different time horizons.
Equity
Property value − loan balance. Grows from price appreciation + principal repayments.
Negative gearing
Property where deductible expenses exceed rental income, producing a tax-deductible loss. See the full guide.
Stamp duty
State-based transfer tax on property purchase. Use our stamp duty calculator to estimate by state.