Think $850k is out of reach? The real cost might be waiting too long. 

When people see a property priced at $850,000, some freeze. 
Too much debt. 
Too big a commitment. 
Too risky. 

But here’s the truth most miss: it’s not about the price tag – it’s about the return.  

It’s about the return.  

Because when you run the numbers properly, an $850k investment might give you far more leverage, income, and growth than you expected. 

Let’s break down what a real return on investment (ROI) looks like across rent, tax benefits, and capital growth – in year one and beyond. 

What You’re Buying 

Let’s say you’re looking at a newly built house-and-land package in a growth suburb. The total package price is $850,000 – that includes the land, construction, stamp duty (where applicable), and setup costs. 

You finance 90 percent of the deal. 

Your upfront contribution: around $95,000 
(deposit, lender’s mortgage insurance, and legals). 

It’s not small – but it sets the foundation for something much bigger. 

Year 1 ROI Breakdown 

  1. Rental Income

Let’s assume a gross rental yield of 4.8 percent, which is reasonable in today’s market for new homes in high-demand areas. 

  • $785 per week 
  • Approx. $40,820 annually 
  • After allowing for minor vacancy – around $38,000 

That’s a strong income stream covering a portion of your repayments and helping reduce your out-of-pocket costs from day one. 

As rents continue rising (thanks to national shortages and population growth), this income only improves. 

  1. Tax Benefits

Most investors overlook the power of tax deductions. 

With a brand-new build, you’ll be able to claim depreciation on the building and fixtures, plus standard deductions such as loan interest, property management fees, and insurances. 

Here’s a simple example of Year 1 tax deductions: 

  • Building depreciation: ~$8,000 
  • Fixtures and fittings: ~$3,500 
  • Additional deductions (interest, fees): ~$10,000+ 

Depending on your taxable income, this could mean a $10,000–$12,000 tax refund in your first year. That refund helps offset costs, boost cash flow, or contribute to your next deposit. 

  1. Capital Growth

This is where real wealth builds. 

Assume your property grows at a conservative 5 percent in year one – that’s $42,500 in capital growth. 

You only put in $95,000 upfront. 
That’s nearly 45 percent ROI on your equity in just 12 months. 

This kind of leverage – using a small deposit to control a large asset – is exactly why property is such a powerful wealth-building tool. 

And if that same 5 percent growth continues for 5 years, your property could be worth $1.08 million. 

The 5-Year Outlook 

Let’s zoom out and look at what happens if this property performs steadily for five years. 

  • Capital growth: $230,000+ 
  • Rent increases: ~$46,000 per year 
  • Tax refunds: $50,000+ total over 5 years 
  • Total equity gained: $300,000+ 
  • Loan repayments reduced 
  • Potential for refinancing or equity access 

All this from a single, well-structured investment. 

What Most People Miss 

They only look at the debt – not the return. 
They wait until they’ve saved more – while prices continue to rise. 
They aim for the perfect deal – and end up doing nothing. 

The smart ones start early. 
They focus on cash flow, tax planning, and growth potential. 
They make their money work harder – so they don’t have to. 

Final Thoughts 

A $850,000 property might seem like a stretch. But when you understand how the numbers work, you realise it can be a launching pad – not a liability. 

Rent, tax benefits, and capital growth combined create a long-term return that far outweighs the initial cost. 

And most importantly, this is how leverage works: 
One good property gives you the equity to secure the next. 

Want help running the numbers on your own strategy? 

At Wealthology, we don’t guess. We guide. 

We break down real numbers, in real time, so you can invest confidently – not emotionally. 

Book a FREE call to us today and let’s plan your next move. 

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