Investment Property Cash Flow – Buy a property for $50 per week
We have just updated one of our cash flow projections, it shows how the typical cash flow on an investment property would work and how after allowing for rent and tax deductions in and all of the loan interest and property costs out, a local investor can borrow all the required funds and have a net cost to hold the property of around $50 per week in year one, on a property that has a purchase price of $475,000. It’s interesting to note that we updated these figures using a current project and the current intetrest rates etc as the previous example was 2 years old, what interesting is that the net result is still the same, a holding cost of around $50 per week.
Assuming that property grows at a fairly modest 6% per annum over 10 years, after 10 years the investor will have put in around $19,724 (average of $1,972 per annum or $38 per week). But the property would be worth over $850,000.
If sold, taking in to account selling costs, agents fees, capital gains tax etc, the investor pockets just under $250,000. It’s certainly not a bad return on the $19,000 invested over those 10 years.
If you would like to see a few more details on the cash flow, what assumptions we have used etc, have a look at the more detailed section on our web site: investment property cash flow or just let us know and we will be happy to send you the fully documented cash flow, all 6 pages worth with all the details etc.
Whilst everyone’s situation is different a cash flow analysis will at least show you how the numbers will generally work for you and give you an appreciation of how you can leverage your funds and benefit from significant tax deductions, allowing you to invest in a property at a relatively low cost.