Calculator Investment Property

If you are planning to acquire an investment property on a ’lease to own’ basis, there is an investment property calculator available to you that will help you establish the possible outcomes this investment might present for you financially.

Before making the purchase of an investment property it may be useful to use an investment property calculator to map out several possible outcomes of your investment. The investment property calculator is a complex financial measure that can analyze even negative gearing possibilities to present you with accurate data to assist your investment.

You provide the calculator with investment property information like the monthly rental income (the rent you charge your tenants), the monthly loan repayment (in the case of an interest only loan it is the equivalent of the monthly interest), and the cash operating expenses (the expenses that are necessary to maintain the property for one month). The calculator will provide estimates like the cash flow (the monthly rental income minus the cash expenses), the annual building allowance (meaning the tax deduction that can be made), the tax profit or tax loss on your investment property (the changes that may occur in the amount you pay for tax) and the change in tax paid (effective as soon as the investment property loan has been paid).

As a first step of this calculation you must enter whatever information is relevant for the questions in red. For moving from one cell to another you can use the TAB key. There is also a section of questions written in black; their respective cells must not be completed as the values for those particular questions will be calculated by the investment property calculator. The results for your calculation are just a click away in the result boxes.

This complex financial tool will consider positive and negative values (income and payment), rent and even the change in the income tax that you must pay as an investment property owner and it will help you find out how much an investment property might cost and how you may profit financially from renting it out.

The investment property calculator will assume that your cash operating expenses are even for all the months of one year, and if there is an interest only loan, the repayments will only consist of the interest payable in addition to a 1.5 percent medical insurance allowance. The annual building allowances range from 2.5 percent of the cost of construction for 40 years after construction for buildings constructed after September 1987 to 4 percent of the cost of construction for 25 years for buildings constructed between July 1985 and September 1987.

However, this calculator does not take into consideration rebates, contributions or deductions even though they can influence the amount of tax that you pay nor does it consider any depreciation allowance from items within the investment property. For these reasons it is important that you view the results as estimates only and to only proceed with the purchase of an investment property after consulting a financial adviser.