How to "Cash Flow Forecast" for Investment Properties

Gabriel Zappiello
Associate Director

It's just Credits and Debits at the end of the day...

How to "Cash Flow Forecast" for Investment Properties

Estimating your cashflow for a potential investment property is pretty easy if you are simply doing a “feasibility” on whether the investment has good numbers behind it.

It is essentially going to boil down to being 'What’s the income, vs what will it cost me to hold the property?'

There are a few obvious and not so obvious things to consider:

  • What is the rental income going to be?
  • Calculate your guaranteed expenses (Mortgage repayments/Property management/Maintenance/Council rates/Insurance etc – these things can add up)
  • Estimate your tax deductions – What will the interest cost you? Also keep in mind the council rates, land tax, and management expenses are all deductible investment expenses.
  • The sum of this will give you a positive or negative figure, and this is what a lot of people refer to as “Positive Gearing” or “Negative Gearing”.

To give you a list of popular expenses that can be involved with investment properties, we have summarised a list that you can use to jolt your mind:

  • Property management fees (These generally range from 5-8% of the weekly rent)
  • Maintenance and repairs – this can vary a lot on the style of property, the age and of course….. your tenants.
  • Council rates
  • Insurance
  • Strata fees (If applicable)
  • Utility costs (If applicable – Electricity/Gas/Water)
  • Land tax
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