The short answer: only if you can carry the figure as modelled, because that number is day one. One client’s property was modelled at $351 a week before tax and costs $150 seventeen months later. The gap came from a steady tenant, one rent increase and savings held in an offset, cash they cannot use elsewhere.
Where the $351 a week came from
I’m a buyers agent, and before any client commits to a property I model what it will cost them to hold.
In a portfolio review, one client told me their investment property now costs $150 a week to hold. At settlement in May 2025, the plan said $351.
The purchase was made with a 10% deposit on interest only repayments, modelled at 6.9%. That came to $351 a week before tax. A 10% deposit means a bigger loan, so that weekly figure mattered more than usual. We talked it through before they bought, and they were comfortable with it.
In my experience the real figure often comes in below the plan, but nobody can promise that. The number as modelled has to be one the owner could keep paying.
What changed in the 17 months after settlement
Seventeen months later the same tenant is still there. No vacancy, and one small rent increase. Part of that is good fortune, because a tenant can give notice whenever they like.
The rest is habit. Month after month this client has put their savings into the offset account against the loan.
That does not make the property cheaper to hold. Their own money is sitting against the debt, so there is less debt to pay interest on. I have not worked out how much of the gap came from each part.
The holding cost on paper is the day one figure
A lot of investors I speak with get spooked by the holding cost on paper. They see a figure like $351 a week, read it as the bill for as long as they own the property, and do not see that they could carry it.
That figure is day one. No rent review has happened yet and not a dollar has gone into an offset.
It can go up from there as well as down, which is why you need to be able to carry it as modelled. Where it goes after that is partly in the owner’s hands.
If you want to see your own day one figure, the cashflow calculator I use with clients lets you set the interest rate year by year and add an offset. You will need to enter your email to open it.
What a lower holding cost costs you
None of this is free. Cash in an offset cannot be used for anything else, and building it means spending less along the way. What you get back is a holding cost you can live with and some room if a bad year comes.
The number can also go back up. If the tenant leaves, rates rise or the cash is needed, $150 is no longer the figure.
Whether an offset account suits your loan is a question for your broker. What it all looks like after tax is one for your accountant.
Buy on the number you can carry
Buy on the number you can carry. Then do the work to bring it down.
That suits someone with surplus income who is prepared to hold for a decade or more. It will not help anyone counting on growth or rent rises to rescue a deal that was tight from day one.
What are you doing, or planning to do, after settlement that changes your holding cost?
Frequently asked questions
Is the holding cost on paper what I will pay for as long as I own the property?
No. It is the figure on day one, before any rent review or offset savings. It can go up as well as down, so you need to be able to carry it as modelled.
Does an offset account make an investment property cheaper to hold?
Not in itself. The cash in an offset is still your money sitting against the debt, so you pay interest on less. Whether an offset suits your loan is a question for your broker.
How much does it cost to hold an investment property each week?
It depends on the loan, the rent and the running costs. In one example, a property modelled at $351 a week before tax cost $150 seventeen months later, after a steady tenancy and savings held in an offset.
If you want a structured framework for making your next property decision, the free 10-day email series covers each decision in order.
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Disclaimer: The information in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It is not financial, legal, or tax advice. The Nelis Group accepts no liability for actions taken based on this content. You should seek independent advice from a relevant licensed professional before making any decisions and always confirm the latest rules and thresholds with your state revenue office or relevant authority.