Elwood
This is a real life example of a property I purchased in Elwood, Victoria
Settlement was on 25th January 2007 (One day before my sister’s wedding)
The Balcony
The Kitchen
The Living Room
Purchase Price: $370,500
Stamp Duty: $17,890
Finder’s Fee: $5,995
Loan Amount: $358,572.35
Other Fees: $4,000 (approximately)
Cash Required: $39,812.65 (From Line of Equity)
Interest Expense: $30,476.45 ($39,812.65 + $358,572.35) @ 7.65%
Rental Income: $15,600 (300pw)
Management Fee: $1,201.2 (7.7%)
Net Income: $14,398.80
Depreciation: $2,129 (Drops to $877 over 10 year period using Diminishing value)
Net Loss: $13,948.65
Tax Deduction 30%: $4,184.59 ($638.70 paper deduction)
Tax Deduction 40%: $5,579.46 ($815.60 paper deduction)
After Tax Actual Cash Flow @ 30%: $10,615.66 ($204 pw)
After Tax Actual Cash Flow @ 40%: $8,794.99 ($169 pw)
Note: If you have $39,812.65 cash required to settle this property you will save $3,045.67 ($58.57 pw)
Break-even Analysis:
@ 30% tax rate - The above property will need to grow at least 2.85% ($10,615.66/$370,500) to break-even
@ 40% tax rate - The above property will need to grow at least 2.37% ($8,794.99/$370,500) to break-even
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