INVESTMENT PROPERTY CALCULATOR
Welcome to the BAN TACS Investment Property Number Cruncher. We cannot encourage you enough to try as many variables as you can think of; after all you are considering an investment of life changing proportions.
Negatively Geared Property
This calculator only works for properties that are negatively geared. If a property is positively geared from the start, yet you borrowed most of the purchase price, then the investment is probably worthwhile on that fact alone, providing the value of the property is not expected to fall.
Investment Property Costs - After CGT
The objective of this calculator is to give you as much financial data as possible about what your investment property will cost you to keep and how much capital growth is really required, after tax, to make the investment worthwhile after you take into consideration Captial Gains Tax (CGT). It is not enough to find a property in an area that you think will go ahead. It is important to know just how much growth is necessary to make a profit, after tax, on the investment, to fully evaluate the purchase.
This calculator is not perfect, when looking to the future we have to use estimates and averages just as you will with some of the data you provide. Nevertheless, the effect of any variation from the estimates should be minor in comparison with the overall information being provided.
Though it is not exactly what this calculator is designed for it can also be used to evaluate the properties you already hold in your portfolio. In these circumstances you will be calculating the opportunity cost of tying up your wealth in the property, so you should use its current selling price after CGT and selling costs as the purchase price. You see it does not matter how much money it has made for you in the past. That is yours now and you need to decide independently from today forwards how to get the best possible return on that money.
Improvements to a Property
The calculator is not designed to consider improvements to the property you may make at some later date. You will need to evaluate these independently when you decide to undertake them. If you intend renovating before you rent the property out just include the renovation costs in figure O1, Amount borrowed (if you are borrowing to pay for them) and in figure P1, the Purchase price. You should also take them into account when working out figure R3, the Estimated claimable depreciation on the building. As a general rule of thumb, providing they are not landscaping costs you should be able to claim depreciation at the rate 2.5% on the renovation costs.
Using the Number Cruncher
Only $44.95 to subscribe to calculate the values entered into the BAN TACS Number Cruncher for a period of one month or $79.95 for a whole years subscription. Please use the Number Cruncher Worksheet provided to assist you in gathering the required information.
There are three areas in which you will need to provide information: Property, Loan, and Owner Information. The Property Information is the most detailed and has been broken into three sub-sections: Purchase, Selling, and Running Costs Information. Fill in all the required information in the following form then click the 'Calculate' button to calculate the estimated financial impact of selling your investment property. Please refer to the related notes for further explanation of required information.
|Helpful hint: Click here for a printable version of the Ban Tacs Number Cruncher Calculator to help you keep your notes together while gathering the required information.|
Compare Properties in Different Growth Areas
With the Number Cruncher you can turn your property data into easy to use information. The following image shows two properties in different growth areas with two different rental incomes. Both properties calculate at 50% of ownership.
A Suburban hotspots property report for 2010 said that in Brisbane growth will be low but limited vacancies will give rise to high rents and in Hobart they predict growth to stay at a robust 10%; as there was no mention of rent, a quick Google of rentals in Hobart indicated medium rental income.