Cash flow Neutral - higher 'yield'?

Hi everybody

Thanks to low interest rates and the 20% cash deposit I had - one of my IP's is cash flow neutral (slightly positive)

Quick question - this feels like a silly question but my minds hit a brick wall.

Assuming rent yield & interest are both 4 % each

As it is now neutral - is each dollar being put in the offset from here on 'earning' me 8% return - that is 4% less interest paid and 4% rental income?

(I know this is a bit over simplified - e.g. ignoring the initial cash deposit, tax credits and etc.)

Thanks

Kayne

 

No. Each dollar put into the offset did the exact same thing it did before. There is no marginal difference.

 

You are saving 4 cents of interest for every extra dollar in the Offset I would think.