Help me break down my cash flow

Any general questions you might have in regards to loans and finance.
Jerry
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Joined: Thu Apr 04, 2019 6:26 pm

Help me break down my cash flow

Postby Jerry » Thu Apr 04, 2019 6:28 pm

Hey, I’m looking to pick up a second investment property. Between the rental income from the property and mortgage repayments, council rates, insurances etc. I’m not quite sure what my cash flow will be every week. Can you help me break down my weekly income and expenses?

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Otto Dargan
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Re: Help me break down my cash flow

Postby Otto Dargan » Thu Apr 04, 2019 7:25 pm

Hello Jerry. Welcome to the forums.

Without the exact figures of your proposed investment plan, I cannot provide you with an accurate breakdown of your weekly cash flow from the investment property. However, you can input the details into our property investment calculator to accurately predict the weekly cash flow position of your investment property.

Our mortgage brokers specialise in investment loans.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for an investment loan.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Jerry
Posts: 3
Joined: Thu Apr 04, 2019 6:26 pm

Re: Help me break down my cash flow

Postby Jerry » Fri Apr 05, 2019 11:35 am

Thanks. The property I’m currently interested in will likely be running at a loss (negatively geared) for at least the first 3 years. I understand there are some tax benefits but is that all. Why do investors buy negatively-geared properties?

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Otto Dargan
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Re: Help me break down my cash flow

Postby Otto Dargan » Fri Apr 05, 2019 12:21 pm

Hi Jerry,

Property investors buy negatively geared properties in high demand areas that may potentially achieve higher rates of growth. They try to achieve more in growth than the cost to hold onto the property. By growing their investment portfolio they can do quite well like that.

Most properties have a negative weekly cash flow (negatively geared) at the time they are purchased however as they grow in value, the rental income outstrips the weekly costs and the property will be positively geared. Learn the pros and cons of negative vs positive gearing here.
You’ll lose your tax benefits but you won’t be paying out of pocket to hold on to the property.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Jerry
Posts: 3
Joined: Thu Apr 04, 2019 6:26 pm

Re: Help me break down my cash flow

Postby Jerry » Fri Apr 05, 2019 1:13 pm

I’m not entirely sold on the idea of negative gearing but that’s just my opinion. Anyway, how does depreciation actually work?
Am I able to claim it in my tax return?

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Help me break down my cash flow

Postby Otto Dargan » Fri Apr 05, 2019 2:46 pm

Hi Jerry,

When a building gets older and items within it wear out, they depreciate in value. The Australian Taxation Office (ATO) governs legislation that allows owners of any income-producing property to claim a tax deduction for this wear and tear.

Effectively, you save tax without actually having any cost affecting your weekly cash flow. Depreciation is a complicated subject so please talk to your accountant for more information.

Speak to one of our mortgage brokers by giving us call on 1300 889 743 or fill in our free assessment form find out if you qualify for an investment loan to grow your property portfolio.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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