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Hello everyone,
I was wondering if anyone could tell me if the following property figures would be classed as +CF,-CF or neutral, taking into account depreciation and income etc.
Property would have capital depreciation of 2.5% 2.5% of $195000 = $4875
Taxable income: $58000
Tax payable: $13572 (2004-2005 tax codes)Rent = 180
Occupancy rate ‘3 Weeks’ = 94.23 Percent
Asking price = $195000Closing costs:
Deposit 23.2 Percent = $38240.00
Legal fees = $580
Stamp duty = $0
Mortgage app fees = $600
Mortgage insurance = $0
Valuation fees = $0
Other borrowing costs = $1000
Clean up costs = $0
Inspection costs = $320
Other costs = $0
Total closing costs = $40740.00Mortgage details:
Loan Priniple and Interest = $149760.00
Interest rate = 6.57 Percent
Term = 30 Years
Weekly mortgage repayments = $220.04
Total repayments for life of loan = $343256.40Annual costs:
Management fees 7 Percent = $617.34
Letting and advertising = $0
Body corp fees = $0
Rates = $600
Utility rates and fees = $0
Insurance = $350
Miscalanious costs = $0
Land tax = $300
Maintenance 4 Percent = $352.77
Other ownership costs = $0
Total annual costs = $2220.11Summary:
Total annual rent = $8819.20
Total annual mortgage = $11441.88
Total annual costs = $2220.11
Total annual cashflow = $-4842.79
Total funded costs = $40740.00
Annual Cash On Cash Return = -11.89 Percent
Cashflow Positive Weekly = $-93.13Thanks for your help
Regrow
You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.
HI Regrow,
Just a quick note – capital depreciation is claimed as a percentage of the building cost of the property and as such I would argue that if you are buying this property at $195K then you will not get a depreciation claim of 2.5% X $195K as there is no allowance for land content nor any for plant and equipment.
As a rule of thumb you can allow approximately between 15% and 40% depending upon the nature of the building for plant and equipment.
Derek
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