Buy today, collect CPI-linked rent and see your profit if you sell in 3, 5 or 10 years. Test where the RBA cash rate goes, use the bond market’s forecast, and see how a change in yield moves your sale price, just as falling yields lift bond prices.
Nick Sharma, Founder of Factor Capital, holds an MBA (First Class Honours) from Melbourne Business School and studied Fixed Income Asset Pricing at the University of Chicago Booth School of Business. Before Factor Capital he advised Victorian state entities on interest rate risk at Treasury Corporation of Victoria. He built this calculator to apply bond pricing to commercial property. Rent works like a coupon, the yield works like a bond yield, and when rates fall, a property bought at a higher yield gains value, much like a bond.
History since 2016 with a 20-month moving average and ±2 standard deviation bands. The forecast fan beyond today follows your rate path, with the band widening the way rate uncertainty does in a mean-reverting (Vasicek-style) model.
Each sale broken down into net rent after interest (carry), value growth from rent increases, the gain or loss from a change in yield, and transaction costs.
Like a bond, the property’s value rises when the yield falls, and the curve bends (convexity): a 1% fall in yield adds more than a 1% rise takes away. The shaded zone is the range of sale yields if rates move within the ±2σ band.
Rent received against interest paid on an interest-only loan, with cumulative net carry.
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Weighing up a commercial property? We’ll run your actual deal through this model, stress-test it against the rate cycle and compare 55+ lenders for the right structure.
Talk to the Factor teamHow it works. Purchase yield = RBA cash rate + lending margin − your yield gap. Rent starts at purchase price × purchase yield and grows at your rent growth rate. The loan is interest-only at the cash rate plus margin. Between today and each sale, the cash rate moves in a straight line through the rates you enter. Sale price = rent at the time of sale ÷ sale yield. “Moves with rates” sets the sale yield to the commercial rate at sale less your yield gap. Profit = sale price − selling costs − purchase price − stamp duty and buying costs + cumulative rent after interest and outgoings. The return on equity (IRR) is calculated on your deposit plus costs. The ±2σ band uses the volatility of 12-month changes in the cash rate since 2012, with mean reversion (κ = 0.35). Bond-market forward rates come from RBA table F2 yields and include a term premium, so they tend to overstate expected cash rates. Stamp duty uses 2026–27 general commercial rates for the selected state.
General information only. This calculator is illustrative and doesn’t consider your objectives, financial situation or needs. Results are before tax and depreciation, assume the property stays fully leased and the loan is repaid on sale, and aren’t a forecast or a guarantee of returns. Interest rates, yields and rents can move against you. Get independent financial, tax and legal advice before acting. Lending criteria, fees and charges apply.
Factor Capital is a trading name of Zinc Finance Pty Ltd (ABN 90 668 675 965). Factor Capital arranges finance for business and commercial purposes only. It does not provide credit assistance for consumer credit regulated under the National Consumer Credit Protection Act 2009 (Cth), including home loans and personal loans.
