The ‘MP+ Investment Property Analyser’ is an essential tool used to assess the affordability of purchasing an investment property.  This 
                                       calculates not only the potential tax benefits but also determines the weekly cash outlay required to fund the property.  By understanding the net 
                                       cash contributions required for a particular property, an amateur or experienced investor can identify and manage any deficiencies in their budget.  
                                       The 'MP+ Investment Property Analyser' also facilitates the development of a long term investment strategy by quantifying the capital growth 
                                       needed for a property investment to be profitable.  Please feel free to update the sample calculation below by completing steps 1, 2 & 3, to analyse 
                                       your next investment property acquisition.
                                       What is the on-going cash contribution required to pay for an investment property?
                                       Use the 'MP+ Investment Property Analyser' to estimate the on-going cashflow required to own an investment property.
                                       Adjust the light orange cells only to analyse your investment options. Refresh the page with F5 to reset the sheet to default
                                       values, also feel free to download the spreadsheet using the link at the bottom.
                                                                      Example Field To Edit           Calculated Value           Subtotals and Totals
                                                            Step 1                                               Step 2
                                                              Price of land                    $ 220,000          Your Income   $80,000
                                                              Price of house                   $ 179,960          Tax Rate      31.5% (inc. Medicare levy)
                                                              House & Land Package             $ 399,960 
                                                              Interest only loan               $ 399,960           For every $1,000 of negative gearing you will 
                                                                                                                           receive a tax saving of $315.
                                                              Interest rate                     6.65%
                                                            Step 3
                                                                                   Income:
                                                                                   Rent received (per annum)                 $ 20,800 
                                                                                   Annual Cash Inflow                        $ 20,800 
                                                                                   Expenses:
                                                                                   Bank fees and charges                       $ 395 
                                                                                   Borrowing costs (claim over 5 years)        $ 120 
                                                                                   Council rates                              $ 1,000 
                                                                                   Interest expense                          $ 26,597 
                                                                                   Insurance                                   $ 650 
                                                                                   Postage, stationery & telephone             $ 60 
                                                                                   Property agents fees                       $ 1,800 
                                                                                   Repairs & maintenance (non-capital)         $ 250 
                                                                                   Strata levies                               $ 100 
                                                                                   Travel expenses                             $ 500 
                                                                                   Water charges                               $ 700 
                                                                                   Annual Cash Outflow                       $ 32,172 
                                                                                   Tax Adjustments:
                                                                                   Depreciation (building)                    $ 4,049 
                                                                                   Depreciation (chattels)                    $ 2,699 
                                                                                   Total Non-Cash Deductions                  $ 6,749 
                                                                                   Total Negative Gearing                    $ 18,121 
                                                                                   Estimated Tax Savings                      $ 5,708 
                                               It is estimated that $108.93 is the effective net contribution required to cover the cost of owning 
                                                  the investment property. This means a mininmum annual capital growth rate of only 1.42% 
                                                       would be enough to produce an overall profit on your rental property investment!
                                       The MP+ Investment Property Analyser has determined an estimated tax benefit, effective net contribution and minimum capital growth rate based 
                                       on your inputs and certain assumptions.  We recommend that you seek professional advice to interpret these results and assumptions in 
                                       conjunction with developing a sustainable investment strategy that suits your long term goals.  If you would like further information and / or would 
                                       like to know more about McKinley Plowman please visit our website at www.mckinleyplowman.com.au or contact our offices on +61 8 9301 2200. 
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