Find out how Nick holds
an Investment Property
for $70 a week.
(hypothetical example)
• Choosing an investment property he
could afford to cover with his savings of
$130,000. He didn’t want to pay Lender’s
Mortgage Insurance, so knew he needed
to buy a place where he could put at
least a 20% deposit down, and have
some savings left over to cover stamp
duty and other upfront costs.
• He chose a property worth $540,000.
This meant $108,000 became his 20%
deposit and $22,000 was put towards his
stamp duty and other upfront costs.
• He set his Rocket Investment Loan
of $432,000 to have Interest Only
repayments with an interest rate of 5.70%
p.a. (5.84% comparison rate*) – which
meant each week he needed to pay $474
back to his loan.
• In addition he needed to consider
property management costs with his real
estate agent, property maintenance, and
additional fees and premiums like council
rates, and insurance – which came to
$5,100 each year.
• Nick was lucky to find a reliable tenant
who was happy to live in the property
long-term, and paid rent on time each
week. Each year his total rental income is
$21,060 p.a. (a rental yield of 3.90%).
• When he took into account his rental
income, and subtracted his expenses for
holding the investment property, Nick
realised he was out of pocket. This meant
his property was negatively geared.
This also means that the loss from the
investment property reduced his taxable
income of $80,000 p.a.
• In addition, Nick spoke to a professional
tax advisor and qualified quantity
surveyor and realised he could claim the
depreciation of his property against his
taxable income.
• This meant the total tax benefit he
received from the investment property
(the reduction in the total tax he had to
pay) came to $4,989 p.a.
Nick was still out of pocket by $3,661 each year. When he broke this into a weekly figure it
came to $70 – which he realised wouldn’t be that difficult for him to meet.
You may have the potential to do something like Nick. Estimate what your “out of pocket”
expense would be with our Investment Property Calculator.
home owns
Proudly supported by Westpac
* The comparison rate for the Rocket Investment Loan is based on a loan of $150,000 over a 25 year term. WARNING: This
comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan
amounts might result in a different comparison rate.