Update: Our Negative Gearing Calculator is now up and running at Negative Gearing Calculator.
We are currently developing our Negative Gearing Calculator and we would love to hear your views on what features you would like to see. Or perhaps more precisely, what financial information you need to help make your decision on what investment property to buy?
In our discussions with clients about investment properties, they generally have two main questions:
- What is the after tax, out of pocket cost per week?
- How many years until the investment becomes cash flow positive?
In order to calculate these two questions, there are a number of variables including the purchase price, current income, loan amount, interest rate, gross rental income, expenses, depreciation and expected capital growth.
The calculator will enable you to quickly determine the effect of:
- Interest rates, rises and falls
- How depreciation affects the after tax out of pocket cost
- Changing the gearing ratio (amount you borrow)
- Changes in rental income received.
It will also enable you to compare multiple properties to determine which has the lowest cost per week. A new apartment may have a lower cost per week than a less expensive older apartment due to the effect of depreciation.
What features would you like to see in a negative gearing calculator ?
What information do you need from your accountant to assist in your property investment decisions?
| Arnold Shields is a Director of Dolman Bateman & Co Pty Ltd, Forensic Accountants and Chartered Accountants. He specialises in forensic accounting and business advice. |
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This sounds great Arnie.
I would like to see a feature that projects future growth of the property to show the approximate capital gains at a future date, after you take into account the out of pocket expenses.