Hi
I dont know how much info I need to be able to roughly work out how much a property is costing, after tax. I have seen this formula (somewhere?) to work out rental yield & wonder if this the way to work this out….Rental per week times 5200 (being 52 weeks in a year times 100 to get a percentage) divided by the purchase price; e.g. ($125 per week x 5200) / $125,000 = 5.2% gross yield.
I've been told approx. 2.5% of your gross yield is required to pay outgoings. For example, if your interest rate is 7% you need a gross yield of at least 10% (7% + 3%) to guarantee a cashflow neutral return (before tax).
Ok I'm good so far with this – how do I work out our rough after tax weekly shortfall/gain?
If we are on 30% tax rate & have first year deductions of around $6k?Guess I should have stayed in my maths classes a bit more
Cheers
Stella
margaret lomas has free software you can download which is easy to use. you just fill in the figures and it works it out for you. you will need a bar code from one of her books though to access. librarys have copies of her books if you don't want to purchase one.
Great – Will have a look & see what I can find.
thanxI think that Taxable amount will depend on what you earn in your traditional job.
if you are getting taxed at 45 cents, then a loss of a few $1000 is not the end of the world.
surly you an figure estimates of outgoings and ingoings for a whole year.
out~ bc rates insurance realestate maintence accountant fees if needed
in~ rent
my 100th post!!!Thanks for the pointer – picked up one of Margaret Lomsa's books (from the library) & downloaded calculators – great little tools.
Cheers
yeah i thought so and so easy to use
Stella
You wouldn't happen to have that bar code still handy ??
If not il grab one of those books myself.
I failed maths too
Who'd have thought id need it for P.I one day haha
Jessie
Another quick calc for you to go by;
allow 20% of the rent to be eaten up by all holding costs (except loan interest) such as repairs, management, insurances and rates etc. This also includes 4 weeks vacancy, (and you probably won't use that bit).
This is a slight over estimate, but if the numbers look good after this, you know you are going to be ok.Jessie 8285 wrote:You wouldn't happen to have that bar code still handy ??Um sorry Jessie – didnt actually bring the book home – (just grabbed the barcode
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