Hi all,
I've been playing around with an IP calculator I've found on the forums (thank-you to the creator) and punched in all the numbers.
What I realised is after punching in all the numbers, I've got no idea what the resulting finding are telling me or how to evaluate them.
Some of the details for you.
apartment
price $550k
rental $700 pw
100% loan purchase costs $22k
using a mortgage rate of 6.50%
annual fees 7.2k ($5k strata, $1k maintenance $1.2k rates)
cap growth estimated at 5%
the spreadsheet shows after tax cash flow of
1st yr-3,895
2nd yr-3,479
3rd yr-3,093
4th yr-2,668
6th yr-2,210
7th yr-1,805
8th yr-1,295
9th yr- 763
10th yr -211
also IRR
IRR (5 Years) 76.34%
IRR (10 Years) 41.68%
IRR(15 Years) 30.28%
What do these %'s mean??
I know it can be quite subjective, however i'm pretty lost. Should I be going for a better CG scenario seeing its negatively geared or looking for a better cash flow scenario or is this an ok scenario?
Is there an general rule of thumb in terms of what % for the cashflow/capital gains tradeoff? How do I evaluate if the negative cashflow is worth the % of capital gains etc?
any feedback would be appreciated.
I've been playing around with an IP calculator I've found on the forums (thank-you to the creator) and punched in all the numbers.
What I realised is after punching in all the numbers, I've got no idea what the resulting finding are telling me or how to evaluate them.
Some of the details for you.
apartment
price $550k
rental $700 pw
100% loan purchase costs $22k
using a mortgage rate of 6.50%
annual fees 7.2k ($5k strata, $1k maintenance $1.2k rates)
cap growth estimated at 5%
the spreadsheet shows after tax cash flow of
1st yr-3,895
2nd yr-3,479
3rd yr-3,093
4th yr-2,668
6th yr-2,210
7th yr-1,805
8th yr-1,295
9th yr- 763
10th yr -211
also IRR
IRR (5 Years) 76.34%
IRR (10 Years) 41.68%
IRR(15 Years) 30.28%
What do these %'s mean??
I know it can be quite subjective, however i'm pretty lost. Should I be going for a better CG scenario seeing its negatively geared or looking for a better cash flow scenario or is this an ok scenario?
Is there an general rule of thumb in terms of what % for the cashflow/capital gains tradeoff? How do I evaluate if the negative cashflow is worth the % of capital gains etc?
any feedback would be appreciated.