I'm not doing this now, but I have in the past. The difference between the rent you receive and the interest on the mortgage is tax deductible, but not what you pay off the principal. However that's not all that is tax deductible, so is your real estate management fees, house insurance, and landlord insurance (only costs $250 a year and well worth it), rates (both water and land), 2 flights back a year to see the house if in another state, and any repairs you have to do while you have someone in the house. You will need to make sure it is up to standard before you have people move in, and any additions or renos you need to do to get it there wont be tax deductible. It didn't effect my FTB too much - TBH I don't really know how much it did as I don't get it fortnightly but as a lump sum at the end of the year, but I still got about $3000 which I thought was average in comparison to previous years. In order to keep everything easy to budget we made sure we rented a place for the same price as we rented ours and that way there was no "dead money" so to speak (as in money that doesn't go towards owning something), but we were in a different state and not looking to go in the same area, but it does work out cheaper to rent the house you own and then live in rental housing yourself (which is ridiculous), so the extra rent would work out over the year I think.