Computing Your Property Investment

Melbourne investment property calculator provides an estimate of how much an investment property will cost. 

It provides an estimate of the amount of cash you will require or receive on a monthly an annual basis to fund your investment property. It also gives an indication of the change in the amount of tax you will pay due to owning an investment property. These two measures are then combined to provide a measure of the after tax profit or loss associated with owning an investment property.

Investment Property Calculator Definitions:

Cash Invested -The cash amount out of pocket required for the purchase of this property.

Interest Rate -The amount of interest the investor pays annually to borrow money from the lender. Rates and programs can vary, check with lender for more information.

Land Value - The approximate value of the land that the property sits on. Usually available on the tax records in the county the property resides. Take note that you cannot depreciate land value.

Personal Property - Anything that you have that is used for the investment property, such as washer/dryer, range, refrigerator lawn equipment, fixtures and other.

Personal Property Depreciation Rate - The rate annually you can depreciate on the personal property.

Appreciation - The amount the property is appreciating on an annual basis. Appreciation occurs on entire value of the property.

Loan P & I - P=principal, I=interest

Total Depreciation - Total amount you can depreciate annually on personal property and building value.

Gross Operating Income - The amount of income available after vacancy.

Total Annual Operating Expense - The total annual expenses including real estate tax, repairs, management fees, insurance, utilities, supplies, and other miscellaneous expenses.

Operating Expense Ratio - It's the percentage amount- based on the income 23 - 30% is considered average.

Net Operating Expenses - Total annual amount of expenses.

Cash Flow Before Tax - What's left after expenses, principal payment and interest.

Annual Debt Service - Your payment to lender including principal and interest.

Return on Investment w/appreciation - Cash flow before tax + principal reduction + taxes saved/paid + appreciation divided by cash invested and includes appreciation.

Return on Investment w/ out Appreciation - Cash flow before tax + principal reduction + taxes saved/paid divided by cash invested.

Cap Rate - Net operating income divided by price, capitalization rate, rate of return. Over 10% is considered an excellent rate.

Cash on Cash - Cash flow before tax % cash invested.

Melbourne investment property calculator allows you to enter basic figures associated with property purchase, maintenance and holding fees while delivering a raft of insightful information that might shed light on a prospective property’s potential.  The calculator also factors in the state in which the property is located, and considers potential tax concessions and cash shortfalls. It is important to understand that this calculator provides possible outcomes based upon both the information provided by you and the assumptions used and that its results are for illustration and information purposes only. Results are not guaranteed in any way and do not constitute a forecast or estimation of amounts payable or available in the future.

While the calculator is a useful starting point, it cannot replace expert, licensed financial advice and should not be used as the basis for any financial decision. You should consider obtaining advice from a qualified financial adviser to assess your specific financial situation before making any financial decisions.