> For the complete documentation index, see [llms.txt](https://docs.scaleconnect.com.au/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.scaleconnect.com.au/scaleconnect-docs/simulator/assumptions-and-events/property-assumptions.md).
# Property Assumptions
Property assumptions are the background growth and cost settings that run across each property's full timeline. They control how the simulation projects value, income, expenses, and interest over time. Each assumption appears as a slider row on the property timeline — adjust it at any point to override the default from that date forward.
For one-off events like loans, sales, and renovations, see [Property Events](/scaleconnect-docs/simulator/assumptions-and-events/property-events-1.md).
***
## How Assumptions Affect Cashflows
Property assumptions drive the numbers behind every projection. Capital growth determines equity and CGT exposure. Rental income and operating costs determine the property's net operating income. The variable rate determines loan interest. Cost escalation compounds all of these over time.
These feed into three cashflow layers:
* **Property cashflows** — rent received minus operating costs minus loan repayments. Each property has its own cashflow view built directly from these assumptions.
* **Personal cashflows** — the tax implications flow through. Rental income is assessable income. Operating costs and loan interest on investment properties create deductions (negative gearing). Changes to assumptions shift the tax position.
* **Portfolio cashflows** — the combined view across all properties and personal income. When an assumption changes, all three layers recalculate from that point forward.
{% hint style="info" %}
For questions about how specific assumptions interact — how a rate change affects negative gearing, how capital growth compounds against debt — ask ScaleAI via **Broker Brain** or the **client assistant** in ScaleApp.
{% endhint %}
***
## Changing an Assumption
Each assumption appears as a slider row on the property timeline. Click or drag to set a new value at the selected month. The change applies from that date forward — earlier months keep the previous value.
You can set different values at different points along the timeline to model changing conditions (e.g. a rate drop in 12 months, or a rent increase after renovation).
For **Capital Growth** and **Variable Rate**, a **Copy** button lets you apply the same value across all properties in the strategy — useful when modelling a market-wide rate change or a uniform growth assumption.
***
## Assumption Types
Five assumption types are available on each property's timeline.
### Capital Growth
The annual rate at which the property's value appreciates. Default is typically around 5% p.a. Range: 0% to 15%.
This drives the property's projected market value over time, which in turn determines equity, LVR, available equity, and capital gains on sale. A higher growth rate means faster equity accumulation — a lower rate means the client needs more time before refinancing or purchasing again.
### Rental Income
The base weekly rental income for investment properties. The simulation applies approximately 90% occupancy by default — the figure you enter is the gross weekly rent, and the effective rent is slightly lower to account for vacancy.
Adjust this when rents change — after a new lease, after renovation, or to model expected rental growth. Cost escalation (below) can also auto-escalate rent over time.
### Operating Costs
Monthly costs to run and maintain the property — management fees, insurance, maintenance, council rates, body corporate, and other recurring expenses. Default is typically around $1,200/month. Range: $0 to $5,000/month in $50 increments.
These are fully deductible against rental income for investment properties.
### Variable Rate
The variable interest rate applied to loans on this property. Default is typically around 6.5% p.a. Range: 0% to 15%.
This applies to variable-rate loans only — fixed-rate loans use the rate set when the loan was created. When the variable rate changes on the timeline, all variable loans on this property recalculate interest from that date forward.
{% hint style="info" %}
Use the **Copy** button to apply a rate change across all properties at once — useful when modelling an RBA rate move.
{% endhint %}
### Cost Escalation
The annual rate at which operating costs and rental income grow. Default is typically around 3% p.a. Range: 0% to 15%.
This compounds annually. It keeps the simulation realistic over long timeframes — without it, operating costs and rent would stay flat while property values and salaries grow.
***
Do assumptions apply to all loans on the property?
The variable rate applies to all variable-rate loans on the property. Fixed-rate loans are unaffected — they use the rate set at loan creation until the fixed period expires.
Can I set different growth rates at different times?
Yes. Click the slider at the month where you want the rate to change. You can model conservative growth for the first few years and higher growth later, or vice versa.
Does rental income include vacancy?
The figure you enter is gross weekly rent. The simulation applies approximately 90% occupancy automatically — you don't need to discount for vacancy manually.
Can I override an assumption with a specific event?
For rental income, yes — adding a [Partial Rental](/scaleconnect-docs/simulator/assumptions-and-events/property-events-1.md#partial-rental) event overrides the rental income assumption for the rented portion. For property value, an [Appraisal](/scaleconnect-docs/simulator/assumptions-and-events/property-events-1.md#appraisal) event overrides the modelled capital growth with an actual valuation figure.
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