What is the Real, After Tax, Cost to
Start Creating Wealth?
The most common question asked when considering an ivestment property is "What will it Cost me?" By cost we mean the "REAL COST"; that is how much money do you have to find each week out of our current family budget to own the property in question and create wealth for the future!
To Calculate the 'Real Cost' to own your own Investment Property simply download our Calculator from the link below (right click and selct 'save as'):
How Much Will My Investment Property Cost?
Then simply fill in the Property Variables (highlighted on the spreadsheet). We have provided reliable estimates for all variables to assist you.
Is is important to always obtain professional advice from a qualified Financial Advisor such as Phoenix Property Consultants to ensure that you are not being missled by unrealistic 'marketing promises' and 'sales hype' about investment property that often over estimate income and underestimate (or plain forget) the costs associated with property ownership, management and maintnenace. If you are properly informed about the cost, the REAL cost, then you can easitly determine if wealth creation using investment property is affordable for you.
The Real Cost to own an investment property is a calcualtion of the difference between all the income & financial benefits received from owning the property and all the costs incurred from owning the property.
The difference between these amounts (income & costs) is the amount that you, the investor, need to contribute each week to own the Investment Property and, over time, own the increase in value (equity) of that investment property.
Income and Financial Benefits
- Rent
- Depreciation
Costs
- Interest
- Rates
- Mangagement & Maintenance
- Insurance
In order to calculate the income , financial benefits and costs for that property we need the following information;
- Purchase Price;
- What percentage of the total costs are being borrowed;
- Margianl Tax Rate;
- Interest Rate on loan;
- Construction cost of the dwelling;
- Actual Rent on Completion;
- Property Management Costs
- Land and Water Rates;
- Insurance (building & landlord);
- Pest Spray and Inspections;
Most of this information is easy to obtain or can be acurately estimated from what we already know. Our downloadable calculator "How much Will My Investment Property Cost?" currently has all the correct variables for a real invesment proeprty, simply confirm your marginal tax rate and borrowing amount to find out how much this property will cost you or add deatils for a different invesment proeprty to ascertain its cost to you.