All Topics / Heads Up! / a few questions on Investment detective

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  • Profile photo of MuktaMukta
    Member
    @mukta
    Join Date: 2004
    Post Count: 35
    September 19, 2005 - 12:27 pm

    Hi there, I love investment detective, though I dont
    have a clear understanding of the whole program yet.
    I have explored and read just about anything I can on it to help me understand it as I am new at property investing.
    I have quite a few questions if you could work threw with me I would be ever so greatful, I need the basic english version too if you could, Im no computer wiz.

    1. Estimated Market Value- my understanding is simply what the property is valued at?

    2. Capital Appreciation- my understanding is I have to work out how much the property will increase over a year? (do you have any suggestions in how I could work this out? CPI?)

    3. Morgage Duty- Is this morgage stamp duty?

    4. Are Strata Levies the same as body corporate fees? If not where do I include strata levy fees?

    5. Capital Costs- This one Im stuck

    6. The section “profibility” Is the section I mostly pay attention to the Net Cashflow?

    7. The section “break even” I understand the occupancy,cash receipts,rate and equity loan part but Im confused at why theres a different figure for 52 weeks and 48 weeks, wouldnt the number in each mean the total weeks the property needs to be rented in weeks?

    8. In the ‘return’ section Im confused on, but I will try anyway-
    Gross Return- Is this annual profit before tax?
    Net Return- annual profit after tax?
    Cash on Cash Return- ?? nothing has ever registered with any of the properties I have put threw. Do I have a bug or am I just doing this wrong?
    Payback Period- Is this the term of the loan?
    (Nothing has ever registered here either?)

    9. Under the Equity Section- Gross Equity???
    Gross Equity???
    Net Equity????

    I know this is quite an extensive email to you Phil, I want you to know I do appreciate your time.
    Im looking forward to your reply
    Kind Regards
    Paula Slegtenhorst

    PS Because I love Investment Detective so much its worth nothing less than me to want to learn how to use it fully,
    thankyou for your patience
    Investment Detective is a total credit to you.

    Paula

    Profile photo of Investment DetectiveInvestment Detective
    Member
    @investment-detective
    Join Date: 2004
    Post Count: 105
    September 20, 2005 - 12:22 pm

    Hi Paula

    I have included your questions and answered them inline.

    1. Estimated Market Value- my understanding is simply what the property is valued at?
    Yes

    2. Capital Appreciation- my understanding is I have to work out how much the property will increase over a year? (do you have any suggestions in how I could work this out? CPI?)
    This requires some research, there are lots of sites that you can provide sale prices, median house prices and how much the price has moved, you need to research the area or specific street and figure out the potential for capital gain.

    3. Morgage Duty- Is this morgage stamp duty?
    Yes

    4. Are Strata Levies the same as body corporate fees? If not where do I include strata levy fees?
    To be honest, I’m not sure although I think they are the same, if not you can add the figure to the miscellaneous amount.

    5. Capital Costs- This one Im stuck
    A good example of a capital cost would be the water heater.

    6. The section “profibility” Is the section I mostly pay attention to the Net Cashflow?
    Yes and no, the Net profit takes into account the depreiation as a cost, so it would be more accurate to use this instead.

    7. The section “break even” I understand the occupancy,cash receipts,rate and equity loan part but Im confused at why theres a different figure for 52 weeks and 48 weeks, wouldnt the number in each mean the total weeks the property needs to be rented in weeks?
    The amount of rent is lower for the 48 week calculation, so if the Property Management Fees and the Maintenance Costs are a percentage of these amounts, this reduces the ongoing costs by a small amount and so the breakeven is also lower.

    8. In the ‘return’ section Im confused on, but I will try anyway-
    Gross Return- Is this annual profit before tax?
    No, Gross return: Typical gross return on investment calculation.
    (Gross annual income / (Purchase price + closing costs))

    Net Return- annual profit after tax?
    No, Net return: Return on investment calculation based on net profit.
    (Net pre-tax profit / (Purchase price + Closing costs))

    Cash on Cash Return- ?? nothing has ever registered with any of the properties I have put threw. Do I have a bug or am I just doing this wrong?
    Cash-on-cash return: Return based on net cash back compared with cash needed
    (Annual net cash flow / Cash needed)

    Payback Period- Is this the term of the loan?
    No, Pay back period: How many years it will take for the cash flow to repay cash needed.
    (Cash Needed / Annual net cash flow)

    (Nothing has ever registered here either?)
    You need to have some cash in the deal for this to display any values.

    9. Under the Equity Section-
    Gross Equity??? The current equity position of the property in dollars
    Gross Equity??? The above amount represented as a percentage
    Net Equity???? The Gross equity percentage including the capital appreciation

    Hope this helps

    Regards

    Philip Batey
    JATPAC Designs

    Author of Investment Detective

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