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Your investment property does not pay off your home loan. Any advertisement that says it does is selling something.
So start with the honest question. What does holding that property actually cost you each week?
Rent of thirty three thousand eight hundred dollars does not cover about forty five thousand dollars of deductible interest.
Even after the tax refund, the property costs about one hundred and seventy eight dollars a week to hold.
For that, a seven hundred and thirty five thousand dollar asset sits in your name, funded largely by a tenant.
The gain does not come from earning more. It comes from how many days each dollar sits still.
Interest is charged daily on your loan balance, minus whatever is sitting in the offset account.
Stream one is both salaries, about one hundred and forty one thousand dollars, landing and waiting to be spent.
Stream two is the rent, six hundred and fifty dollars a week, sitting in transit.
Stream three is the tax variation, ten thousand four hundred and seventy four dollars, paid fortnightly instead of yearly.
Stream four is the credit card float, about six thousand dollars of living costs, deferred and cleared monthly.
Together they hold an average balance of twenty thousand five hundred and forty dollars across the year.
None of it is new money. Same income, same rent, same tax bill, only different timing.
A withholding variation tells your employer to withhold less each pay, because you are running a rental loss.
The total tax does not change. It arrives as four hundred dollars a fortnight, up to twelve months earlier.
Your accountant lodges the form, and it has to be redone every financial year.
Day to day spending goes on an interest free card, cleared from the offset on the due date.
Deferring six thousand dollars of expenses for an extra thirty to fifty five days is the biggest stream.
One condition. Cleared in full every month, because card interest near twenty percent undoes a year of benefit.
If that discipline is shaky, leave this step out and run the other three.
Same loan, same rate, same household. The home loan is gone in eighteen years and eight months.
Instead of thirty years and one month, and three hundred and fifty two thousand dollars less interest.
Ten years and five months of that comes from directing a real surplus. No structure can create it.
The timing structure alone is worth one year and about forty two thousand dollars. Smaller, and free.
Every household lands somewhere different. Tell us where you are, and we will run your numbers.
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