- curtis_07Participant@curtis07Join Date: 2015Post Count: 5
Hi everyone, I am currently looking into buying my first IP however am not confident enough with calculations to ensure the property will be positive cashflow.
I was wondering how people calculate this? For example how much do you allocate to maintenance,rates, agents fees. What other costs are there that need to be considered.
Without being accurate with these figures it woild be very easy to buy a property that I thought would be paotively geared when In fact it’s not.
Any information would be appreciated.Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
Rental income, minus:
*interest (calculate at 105% of purchase price to establish the true cost of the property, as this will include financing costs of government charges)
*water if applicable
*insurance if applicable
*strata if applicable
*letting and management fees
Depending on where the property is, the estimates will vary wildly. It’s best to become familiar with how much councils rates/water/insurance is within an area and use that as a rule of thumb etc. Always check strata costs and request the documents to see the current maintenance accounts + sinking fund to ensure there is enough capital to meet any future work required.Adrian CahillParticipant@adriannqldJoin Date: 2003Post Count: 128
Hi Curtis, what you may want mate is a an investor to send you their excel spreadsheets that they use to work all this out.
I made simple ones and actually picked up a book on financial planning when I started work, then created excel spreadsheets to measure my wealth which I’ve kind of done on a monthly basis ever since.
Happy to send you mine.
Around 2013 a mate and investor here Mike showed me his excel spreadsheets and it blew me away! His were so dynamic and advanced. Perhaps someone better than me could share theirs?