Break Even / Reverse Calculation
It is desirable to find out the lowest amount of rent that you can receive in order to break even ( not slip into negative gearing territory – wooooooh!)
Sometimes we need to find out the minimum weekly rent in order to achieve a desired annual cashflow amount.
We have produced this spreadsheet to assist students to work out this amount:
It has been produced to allow for differing:
Loan interest rates
Purchase Price
Loan to Value Ratios
Annual weeks rented
It factors in the expenses ( Rates, Water Rates and property management fees are specified as a % of the rent received)
NOTE that this figure will vary across different property according to location and type.
Note that higher vacancy rates and higher interest rates will affect the weekly rent figure. It excludes any tax benefits for depreciation etc.
For those who want a spreadsheet
