Yong-Long Lai

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 Views

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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