Hi all - I've been an avid reader and occasional poster for some time now. I noticed a few references on this site (and other sites that I dare not mention for fear of being sued about profits being generated from properties.
When looking at opportunitis, I factor in every conceivable cost (including landlord insurance, inspections, R&M, longer term capital improvements, etc) which gives me a fairly conservative projection of profits. To date my projections have been pretty well right, but hearing some of the other numbers out there I'm wondering if I'm missing the absolute bargains, or simply calculating differently to others.
Below are some example figures with my expected after tax return. Note the numbers are rounded, and you'll have to make your own assumptions about some numbers (e.g. tax rate, etc).
Would anyone else care to do the calculations on these figures and tell us what your expected return is?
Purchase price $85k
Rent per week $180
Interest rate 7% (interest only)
Property manager 8.5% (incl GST)
Rates $1500 p.a.
Insurance $350 p.a.
R&M $500 p.a.
Other costs $200 p.a.
I would expect to make about $1000 p.a. from this property (average of inflation adjusted profits over a few years). Note: I'm ignoring valuation, capital growth benefits, etc.
So what are your results and commentry?
Would anyone else care to share figures from properties they own or have evaluated so we can do a similar exercise?
Cheers
Gerrard
When looking at opportunitis, I factor in every conceivable cost (including landlord insurance, inspections, R&M, longer term capital improvements, etc) which gives me a fairly conservative projection of profits. To date my projections have been pretty well right, but hearing some of the other numbers out there I'm wondering if I'm missing the absolute bargains, or simply calculating differently to others.
Below are some example figures with my expected after tax return. Note the numbers are rounded, and you'll have to make your own assumptions about some numbers (e.g. tax rate, etc).
Would anyone else care to do the calculations on these figures and tell us what your expected return is?
Purchase price $85k
Rent per week $180
Interest rate 7% (interest only)
Property manager 8.5% (incl GST)
Rates $1500 p.a.
Insurance $350 p.a.
R&M $500 p.a.
Other costs $200 p.a.
I would expect to make about $1000 p.a. from this property (average of inflation adjusted profits over a few years). Note: I'm ignoring valuation, capital growth benefits, etc.
So what are your results and commentry?
Would anyone else care to share figures from properties they own or have evaluated so we can do a similar exercise?
Cheers
Gerrard
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