For example, knowing how to calculate the cash flow of potential rental properties can help determine whether a particular rental property would make a suitable investment or not. Negative Gearing Negative gearing is borrowing money to buy an income-producing asset that produces less than is needed to pay for and maintain the asset in the short term. Calculating a meaningful ROI for a residential property can be challenging because calculations can be easily manipulated—certain variables can be included or excluded in the calculation. Calculating the ROI on financed transactions is more involved.