Armchair developer vs retail investor
| Armchair developer | Retail investor | |
|---|---|---|
| Market value on completion | ||
| Less developer profit + selling costs | — | |
| Purchase price | ||
| Stamp duty | — | |
| Other purchase costs | ||
| Total purchase cost | ||
| Instant gain / (loss) vs value | ||
| Gross rental yield | ||
| Total difference in your favour | ||
Manufactured equity
Return on cash invested
equity ÷ cash contributed
LVR on completion
Annual cash flow
Repayment saving vs retail
smaller loan, less interest
Tax & exit (2026-27 Budget)
Armchair developer new build
After-tax cash flow (p.a.)
Negative-gearing treatment
CGT at exit
CGT method used
Net proceeds after CGT
Retail investor new build
After-tax cash flow (p.a.)
Negative-gearing treatment
CGT at exit
CGT method used
Net proceeds after CGT
Your total position after the hold
The exit line above is only part of the story. Total return counts the day-one equity, the after-tax cash flow across the hold, and the equity realised at sale after CGT and repaying the loan, all measured against the cash you put in.
Armchair developer
Equity at sale (after CGT, loan repaid)
After-tax cash flow over the hold
Total profit on cash invested
Total return on cash
Retail investor
Equity at sale (after CGT, loan repaid)
After-tax cash flow over the hold
Total profit on cash invested
Total return on cash
The picture
Where the discount comes from
Total cost vs value
Value & equity over the hold
Net proceeds after CGT at exit
Total profit on cash over the hold
Recycle it: one deal becomes a portfolio
The equity you manufactured doesn’t have to sit there. Once the build completes and the property has found its retail value, you refinance, pull your deposit (and a slice of the equity) back out, and put it to work as the deposit on the next one — bought again at cost price. Keep the profit working as your deposit and the portfolio compounds, without tipping in fresh savings each cycle. Eventually a single cycle frees enough to start two at a time.
%
How much the bank lends against the retail valuation.
yr
Build, settle and season before you refinance and redeploy.
yr
How far ahead to project the recycling.
What one property frees up
Retail value when you refinance
Refinance loan at your LVR
Repay your cost-price loan
Cash released to recycle
Equity buffer left in the property
After years of recycling
Properties controlled
Portfolio value
Your equity across the portfolio
Your own cash ever invested
| Cycle | New builds | Portfolio | Portfolio value | Your equity | Cash recycled |
|---|