Hi all,
I’m working on an investment report to calculate inflows and outflows of an investment property we plan to purchase with 8 units.
I can estimate the inflow increases per year no problems, but I need to estimate the outflow increases per year for the next 5 years. What % increase to others use? The major outflows are management fees, council rates, water rates, electricity, Insurance and Land Tax.
If anyone can help or has a spreadsheet they use I would be GREATLY appreciative!
Anyway, thanks for your time again…
Matt
I would factor at least a 5% increase per year in expenses.
Land tax I do not really have a clue on but probably 9% p/a as land value can increase by this amount on average.
And also factor in misc repairs. say $1000 per year per unitYou would need to factor in AT LEAST the rate of inflation, which runs at around 3-5%. Sometimes companies put their prices up more than inflation, but generally they will at least follow inflation…otherwise they are going backwards.
If you want to be conservative then factor in a 5% increase in costs. Otherwise anywhere between 3-5% should give you a good general idea.You can’t predict this exactly, but you can do your best to be conservative and make sure the numbers work even if the expenses go up quite quickly.
Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click AwayRyan McLean | On Property
http://onproperty.com.au
Email MeThanks so much for your help. I was working off 5% so it’s nice to know I’m on the right track!
You guys are really helpful. Thanks!
No worries. Glad to be of help
Ryan McLean | On Property
http://onproperty.com.au
Email Me
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