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It’s not difficult at all to work out if you can afford to hold onto your investment property to hold. For most people, it can quickly be worked out on a scrap piece of paper.

Picture this. On one end there is income (rent) and on the other you have income expenses (loan interest repayments, property management fees, maintenance costs, rates and insurance).

Here’s an example

Pat and Carol took out a loan for $400k for a property that will give them $400 rent per week.

Income from rent –

$20,800 per annum ($400 * 52 weeks)


Loan interest repayments: $20,000 per annum (based on interest rate of 5%)

Property management fees: $1,248 per annum (based on 6% of rent)

Maintenance costs: $1,000 (a rough figure that will vary depending on property)

Council Rates: $2,000 (a rough figure that will vary from council to council)

Water Rates: $1,000 (a rough figure that will vary from water authority to water authority)

Insurance: $700 (premiums vary – get a few quotes)

Total costs: $25,948

So the total holding cost is worked out by taking $25,948 (costs) minus $20,800 (rent) = $5,148 per annum or $99 per week. This amount will be less, once you claim depreciation and negative gearing.

If you would like a more in-depth analysis of holding costs and forecasted growth – feel free to PM me for the Property Investment analysis tools and checklists or Contact us for a FREE no obligation consultation or discuss strategies to correctly structure your loan on 03 8390 5855 or email

Please note: The above explanation provides a simple breakdown of the costs associated with owning an investment property. Each investor’s situation is likely to be different in terms of the costs associated with their investment property. For that reason, this breakdown should only be referred to as a rough guide to working out holding costs.