Hi all,
I posted this in accounting, however thought it might be more appropriate here.
I have downloaded the IP calculator and have punched in the following numbers.
Asking Property Value $550,000 (100% lend)
Purchase Costs $21,340 upfront
Borrowing Costs $900 upfront
Deposit $0
Rent Per Week $700 p/w
Capital Growth rate 5.00% p/a
Interest Rate Loan 1 6.50% p/a
Fittings $3,000 upfront
Income (salary) $70,000 p/a
Property Management 8.0%
strata $5,080 p/a
general expenses $1,000 p/a
Council Rates/water $2000 p/a
Tax Related Expenses $200 p/a
the cashflow position after tax is
1st yr: -7,979
2nd yr: -7,558
3rd yr: -7,097
4th yr: -6,604
5th yr: -6,083
What I've noticed is many investors want their IP's to be cash flow neutral or even positive, however they don't specify the deposit they put down to create that scenario. My question is, is a 8k p/a shortfall acceptable for a property worth 550k with 100% loan with 5% capital gains prospects?
If I calculated the same property with a 20% deposit, the shortfall would be
1st yr: -2,974
2nd yr: -2,553
3rd yr: -2,092
4th yr: -1,599
5th yr: -1,078
am looking for thoughts on whether this is a viable IP or should I be looking for something with less of a shortfall.?
As I have little experience in interpreting the numbers, I would appreciate any advice and perhaps what benchmarks others would deem acceptable.
thanks all,
x
I posted this in accounting, however thought it might be more appropriate here.
I have downloaded the IP calculator and have punched in the following numbers.
Asking Property Value $550,000 (100% lend)
Purchase Costs $21,340 upfront
Borrowing Costs $900 upfront
Deposit $0
Rent Per Week $700 p/w
Capital Growth rate 5.00% p/a
Interest Rate Loan 1 6.50% p/a
Fittings $3,000 upfront
Income (salary) $70,000 p/a
Property Management 8.0%
strata $5,080 p/a
general expenses $1,000 p/a
Council Rates/water $2000 p/a
Tax Related Expenses $200 p/a
the cashflow position after tax is
1st yr: -7,979
2nd yr: -7,558
3rd yr: -7,097
4th yr: -6,604
5th yr: -6,083
What I've noticed is many investors want their IP's to be cash flow neutral or even positive, however they don't specify the deposit they put down to create that scenario. My question is, is a 8k p/a shortfall acceptable for a property worth 550k with 100% loan with 5% capital gains prospects?
If I calculated the same property with a 20% deposit, the shortfall would be
1st yr: -2,974
2nd yr: -2,553
3rd yr: -2,092
4th yr: -1,599
5th yr: -1,078
am looking for thoughts on whether this is a viable IP or should I be looking for something with less of a shortfall.?
As I have little experience in interpreting the numbers, I would appreciate any advice and perhaps what benchmarks others would deem acceptable.
thanks all,
x
