When most people hear “$1.3 million property”, they ask:
“How much is this going to cost me each month?”

But savvy investors flip the question:
“How much am I investing monthly to control a $1.3M growth asset in one of Sydney’s most in-demand markets?”

That mindset shift is everything – because this isn’t just a purchase. It’s a long-term wealth strategy.

💸 Expenses (Interest-Only Loan – Years 1–5)

• Loan (80% of $1.3M at 5.53% IO): $5,020/month

• Strata, council, insurance: $750/month approx..

• Property management (5% of $4,983 rent): $250/month

• Total monthly outgoings: $6,020

💰 Monthly Investment (Pre-Tax)

• Rent received: $4,983/month

• Shortfall to cover: $1,037/month

📉 Tax Benefits (Year 1)

• Depreciation claim: $716/month

• Total deductible loss: $1,753/month

• Tax savings at 45% tax rate: $789/month

✅ Final After-Tax Investment (IO Loan – Year 1)

$1,037 – $789 = $248/month out of pocket

📌 That’s just $8.25/day to control a $1.3M investment-grade asset – fully managed, and already generating equity.

📊 What Happens if P&I Kicks In (Year 6) – Unless extended or refinanced, most investment loans revert to principal & interest after 5 years – so planning ahead is essential

After 5 years, your IO loan typically reverts to Principal & Interest. Repayments increase – but by then:

✅ Rent has grown (we assume 3% CPI increase annually)
✅ You’ve built equity and could refinance
✅ You’ve had 5 years of stronger cash flow

📈 Year 6 Rent Growth (3% p.a. assumed)

• Year 1 rent: $1,150/week

• Year 6 rent: $1,333/week

• = $5,776/month

• New management fee (5% of rent): $289/month

💸 Year 6 Monthly Expenses (P&I Loan)

• Loan repayment (P&I): $5,970/month

• Strata, council, insurance: $750/month

• PM fee: $289/month

• Total outgoings: $7,009/month

💰 Year 6 Pre-Tax Shortfall

• Rent: $5,776/month

• Outgoings: $7,009/month

• Shortfall: $1,233/month

🧾 After-Tax Investment in Year 6

• Depreciation continues: $583/month

• Total deductible loss: $1,233 + $583 = $1,816/month

• Tax benefit (at 45%): $817/month

• Final out-of-pocket (after tax):
  $1,233 – $817 = $416/month

✅ So even after IO (interest only) ends, you’re investing $416/month to hold a $1.3M appreciating asset – still tax-efficient and manageable.

📈 Long-Term Capital Growth

Assume capital growth of 6.5% per annum:

• $1.3M grows to $2.4M over 10 years

• $1.1M in capital gains

• That’s $110,000/year in wealth creation – while your tenant pays off most of the funds of the mortgage

🧾 Upfront Investment (For Full Picture)

• Deposit (20%) = $260,000

• Stamp Duty (NSW) = $55,000

• Total upfront = $315,000

These are once-off costs, not part of monthly holding – but important for planning.

💡 No Cash? No Problem – Use Equity

If you own a home or other property, you may be able to:

✅ Borrow against existing equity
✅ Fund the deposit and stamp duty without using cash
✅ Preserve savings while expanding your portfolio

This is how many experienced investors scale – using today’s equity to secure tomorrow’s wealth.

Why This Matters

This isn’t about buying a property and hoping it pays for itself from day one.

This is about leveraged wealth building with:

✅ Strategic loan structure
✅ Tax-smart holding
✅ High-demand, low-supply suburbs
✅ Rental uplift over time
✅ Capital growth that compounds quietly in the background

📥 Want This Modelled for You?

We’ve been creating these models frequently – based on real places, live rents, and actual loan rates.

If you’re considering your next investment, we can show you:

✔️ Cash flow
✔️ After-tax investment
✔️ Depreciation
✔️ P&I vs IO comparisons
✔️ Suburb insights

👉 DM me or book a free 15-min investor strategy call here: www.cambridgeagency.com.au/book-a-consult.

* We’ve assumed a first-year depreciation claim of $716/month, typical for a 2-bed apartment built in the last 20–30 years. A Quantity Surveyor can confirm this precisely for your property or run a model.