Purchase Price: Listed price of the property

Loan Amount: Listed price + stamp duty + conveyancing + depreciation report + closing costs + loan costs less cash deposit.

Loan Costs: 0.5% of the loan amount

Total Cost: Listed price + stamp duty + conveyancing + depreciation report + closing costs + loan costs

Conveyancing: $950

Depreciation Report: $575

Conveyancing Cost & Depreciation Report: The sum of Conveyance + Depreciation Report

Property Expenses: The sum of property management fee, landlord insurance, maintenance and levies including water, council rates and strata fees, if applicable. Expenses are indexed to CPI. Default Inflation/CPI rate of 3.6%

Landlords Insurance: $350 per year

Property Maintenance: $450 per year

Property Management Fee: 10% of rental income

Rental income: Estimated Rent per week x (52 weeks less vacancy rate). Estimated rent is indexed to rental CPI. Default Rental Inflation/Rental CPI rate of 4.6%

NRAS Refundable Tax Offset: $9,981 as of current financial year

Depreciations: Quantity Surveyors provide a preliminary depreciation schedule for each property via an auto-generated process. In the event the data is not available, an alternate manual process is used. The values entered are depreciated by the following rates:

• Fallback Building Depreciation Rate: 2.5%
• Fallback Fixtures Depreciation Rate: 10%

Stamp Duty: Stamp duty is automatically calculated, dependent in which State the project is listed. The rules governing the transaction vary according to the respective Office of State Revenue. For example, NSW is based on the contract price. In QLD, Home and land packages are based on the land component only.

Furniture Package:Cost of furniture package should this be offered by the vendor

Taxable Income: This is the yearly income for the person buying the property. Professional or multiple property investors will need to check with their accountant as to “what taxable” income would apply in their case.

Cash Deposit: This is the cash amount put towards the investment. Any amount entered will be deducted and shown as ‘Cash Invested’ against the ‘Loan Amount’. In the case where the investor plans to borrow the total amount including the costs, then $0.0 should be entered. The default value used in the calculations is the minimum deposit required by the vendor for each property (typically around 5%­ to 10%, but can vary greatly).

Loan Type:

• IO - Interest only is calculated against the loan amount.
• PI - Principal and interest are calculated so that the loan amount is paid off over 25 years.
• CI - Capitalised Loans allow you to service part of the interest and accrue the remainder for the agreed term.
• The % deemed as the ‘capitalised %’ is the part serviced over the ‘capitalised term’;
  • Default Capitilisation Rate: 20%
  • Default Capitilisation Term: 4 years.

Interest Rate: This is the interest rate of the borrowings. Default rate: 6.5%

Ownership:

• Single: The system defaults to a single entity ownership, ($) 85000
• Joint:

  • Partner’s Income: The system defaults to no value and the notation ‘$ per year’. In cases where there are co-owners (Joint Tenancy), calculations are based on equal shares.

• Self Managed Super Funds:

  • Once this ownership option is selected, the ‘Taxable Income’ field will be re-labeled as ‘Fund Earnings’. The value entered should reflect the funds earning per annum. This value will be calculated at a tax rate of 15%.

• Company:

  • Once this ownership option is selected, ‘Taxable Income’ field will be re-labeled ‘Earnings’. The value entered should reflect the company’s earning per annum, this value will be calculated at a tax rate of 30%.

Australian Resident: By de-selecting this option the ‘Taxable Income’ value will display as ‘n.a’, signifying that a $0.0 value will be used in the calculations. The rental income and NRAS incentives will continue to be used in the calculations.

Capital Growth: This applies to the projected / future capital growth for the area. The default value is shown against the listed property. The calculations are projected over 10 years.

Inflation Rate: This input variable is the annual rate of inflation. It determines the rate of increase in rental expenses, rates, insurance and any other taxable income. The default rate is sourced from the Reserve Bank of Australia (RBA). Default rate: 3.6%

Weekly Rent: This is the weekly ‘Gross’ rental amount. The default value is posted against the listed property.

Rental Inflation Rate: Determines the rate of increase in rent. The default rate is sourced from the Australian Bureau of Statistics (ABS) and is specific to the rental CPI component. Default rate: 4.6%

Vacancy Rate: This applies to the period without any rental income, e.g. 2% is approximately one week vacancy. As rental demand and vacancy periods vary property performance is affected. You may alter this percentage to suit the property type and market conditions. Commercial property may take longer to lease, hence a higher percentage maybe applicable. Default rate is 4%

Apply NRAS benefits where Available?: By de-selecting this option the NRAS benefits and rental discount will not be considered in the calculations.

Total Investment Return Range

The sum of the predicted capital growth rate and the gross rental return.

Weekly Cash Flow

Estimated amount of income (or expenses, if the result is negative) that an investor can expect after all expenses, including tax, have been deducted. The figure used is an average of the first 10 years of cash flows and the actual results may differ from year to year.

Internal Rate of Return

The internal rate of return (IRR) is a rate of return used to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or simply the rate of return (ROR). The term internal refers to the fact that its calculation does not incorporate environmental or external factors (e.g. the interest rate or inflation).

Gross Yield

The formula to work out Gross Yield is; ((Weekly rental rate x 52 weeks) + NRAS Credit)) / Purchase price x 100.

Net Yield

Net yield is the Gross Yield less a deduction for Property expenses and rental vacancy.

Required Deposit

The amount of cash an investor has available to put down as a deposit (the balance being borrowed) towards the property purchase. Used to instantly calculate the amount the investor needs to borrow. This in turn updates the cash flow, internal rate of return, total return, etc for each and every property. In the case when the investor plans to borrow the total amount including costs, then zero (0) should be entered. A blank value will default the calculations to minimum deposit required by the vendor, for each property (typically around 5%­10%, but can vary greatly).

Stamp Duty

Stamp duty is calculated based on the current stamp duty rules of the location (e.g. state/territory/region), where the subject property is located. Please note, whilst every effort is made to ensure our information is up­to­date, stamp duty rules change regularly and must be confirmed as part of an investor’s due diligence.

Historical and Previous 12month Capital Growth

Historical sales in a postcode are calculated and then compared to the previous year to obtain the capital growth rate for the previous 12 months.

5 year Capital Growth

The capital growth rate shown is a predicted rate of growth per year for the next 5 years. This figure can be altered down or up through the search panel. It is recommended that the investor adjusts this figure to suit current market conditions.

Population Changes

These figures are provided by the Australian Bureau of Statistics and updated annually.

Depreciation

Based on a preliminary depreciation schedule (provided by a quantity surveyor) the system displays the allowances applicable to Building and Fixtures.

Note: The preliminary report cannot be used for taxation purposes. A final individual report per property must be generated after settlement. Hence the preliminary allowances serve as estimates only.

Levies

Strata / Body Corporate, Council and Water levies are shown as per annum, however they are usually paid on a per quarter basis. Note: Some councils may combine water and council levies into the one levy.

NRAS

Properties marked as “NRAS” are part of the Australian Government’s (Federal and State) National Rent Affordability Scheme. NRAS properties are subject to a tax­free incentive of $9,981 (current financial year) per dwelling, each year for 10 years. The incentive is indexed to an annual rental CPI and is paid to eligible owners as a tax certificate at the end of each tax year. In exchange for tax­free incentives, new properties are rented at a discount of 20%, 25% or 30% (depending on the scheme used) to eligible middle and low ­income tenants.

NRAS Audit Manager Fee

The payment of NRAS incentives to investors is managed by Government authorised administrators called NRAS Audit Managers. These Audit Managers generally charge a fee for this service. The fee may come in the form of a fixed dollar amount per year, or as a percentage of the total NRAS incentive paid each year. In either case, the fee is deducted by the Audit Manager prior to the incentive being paid to the investor.

Some NRAS Audit Managers also charge an up­front fee, sometimes called an "Application Fee". This is shown under 'Closing Costs' for each NRAS property.

Barter

In its simplest form bartering involves the direct exchange of goods or services for other goods or services without reference to money or a money value.

Properties marked as “Barter” can be purchased with a portion in trade dollars. The portion can vary from property to property with an indicative being 30%. The portion ranges between 15% to 35%. For tax purposes, one trade dollar (T$1) is equal to one Australian dollar ($1).

Elevation

The elevation value is the height above or below sea level, based on a property location / address.

This value is sourced from Google. In those cases where Google does not possess exact elevation measurements at the precise location, the service will interpolate and return an averaged value using the four nearest locations. Locations below sea level will display negative values.