FAQ 111 How do I work out the numbers for Income Properties?

You must first do some gathering of numbers specific to your property.

THESE ARE THE FIGURES THAT ARE NEEDED FIRST – PRINT OUT AND FILL IN

WEEKLY RENT. $

VACANCY RATE %

INTEREST  %

LOAN AMOUNT $

PROPERTY VALUE $

Now we use the above numbers to do some calculations

THESE ARE THE FIGURES THAT WE WILL ARE CALCULATE 

1. GROSS RENTAL INCOME $
2. EXPENSES $ 
3. NET RENTAL INCOME $
4. ANNUAL INTEREST PAYMENT$
5. CASH FLOW $
6. GROSS RENTAL YIELD %
7. EXPENSES % OF GROSS RENTAL INCOME

And these are the methods that we will use to perform those calculations

CALCULATION METHOD

a) GROSS RENTAL INCOME = (WEEKLY RENT X 52) x ( 1 – VACANCY RATE)
b) EXPENSES = ANNUAL total of RATES, WATER RATES, INSURANCE, PROPERTY MANAGEMENT FEES, REPAIRS, LAND TAX
c) NET RENTAL INCOME = GROSS RENTAL INCOME – EXPENSES
e) ANNUAL INTEREST PAYABLE = INTEREST RATE % X LOAN AMOUNT

f) CASH FLOW = NET RENTAL INCOME – ANNUAL INTEREST PAYABLE
h) GROSS RENTAL YIELD = (GROSS INCOME / PROPERTY VALUE) x 100
I) EXPENSES % OF GROSS RENTAL INCOME = (EXPENSES /  GROSS RENTAL INCOME ) x 100