How to Calculate Property Investment

Some real estate investors are able to make a substantial living based on the income from their investment properties. However, not every property yields a profit for the investor. Before you enter into a purchase agreement, calculate the value of the property so you can make a wise investment. Market value, replacement cost, capitalization rate and cash on cash return figures help an investor determine the viability of the investment. With Brisbane investment property calculator, you are only allowed to claim depreciation on certain items against your taxable income.

You need Brisbane investment property calculator to calculate your annual expenses on the property. This can be tricky because you need to make sure you include all that you will have to pay money for. Here is a comprehensive list below, but there may be other things you need to take into account also.

• Management fees – These are the fees charged by the real estate agency if you choose to have them manage the property on your behalf. These generally range from 5-10% of the rental income.
• Mortgage Repayments – If you have a mortgage then you are obviously going to have to make mortgage repayments.
• Vacancies – This is where we take into account vacancies. You can look up the vacancy of an area in a property investment magazine. I like to set 2 weeks vacancy as a minimum expectation
• Council Rates – These are the rates you will have to pay to the council. It pays for things like rubbish collection and maintaining the local area.
• Utilities – This includes water, electricity and gas. Only put these down if you have to pay these fees. In most cases the tenant will pay these fees themselves.
• Maintenance – Allow a pool of money for maintenance of the property. Maybe the hot water heater will break or you need to fix the plumbing or something.
• Land tax – This only comes into play if you own a decent amount of land (usually in one state).
• Insurance – Landlords insurance covers your property for many unfortunate circumstances.
• Legal fees – Legal fees are not extremely common in the day to day running of a property. But if you need legal advice you will have to pay for it.
• Accountant Fees – You need help doing your tax return and are paying an accountant to do it for you. Make sure you include this in your expenses.

It is important to use an investment calculator to measure the return on investment used to estimate and evaluate the performance of an investment or to compare the performance of a number of different investments. To calculate ROI, the net profit of an investment is divided by the amount of money invested, and the results are expressed as a percentage or ratio. If you buy a property outright, calculating its ROI is fairly easy. Some investors add equity into the equation. Also, keep in mind that the equity is not cash-in-hand money you can spend; you would have to sell the property to actually access it.