Confirmation on expenses to work out positively geared property

Hi everyone

I am looking to buy a positively geared property and just want to get validation on my expenses to see if I have done my working out correct

So I have done this on multiple price point but will show my working outs on $250K

So I read before that a good deposit amount is 12% so $30k + 10k (Stamp duty)

$220k Loan from the bank

Expenses
Loan Repayments (4.68% Interest only) $198 weekly
Rate $1500 (approx.) $29 weekly
Corporate fees $1200 (approx.) $23 weekly
Mortgage insurance $3000 (approx.) $58 weekly
Real estate fee (5%)

Total =$324

So does this mean for me to buy a positivity geared property at $250k (as an example) that it needs to collect more than $324 to be positively geared?

 

Profit = income less expenses
$X = (324) - (198+29+23+58+16)
x = 324-324 = 0

So yes, more than $324

But you have not taken into account any non-cash deductions, tax savings or interest on the deposit and stamp duty etc.

 

You will also be wise to include allowances for vacancies and maintenance, also agents letting fees.
Marg

 

A side issue, if you buy new unit then you could be looking at as much as $7000 in depreciation, and may be worth considering?

 

Corporate fees only applicable if property is strata or community titled

Mortgage insurance is a once off expense not a weekly one

Depreciation helps

Real estate fees might be 5% in parts of Sydney but that's about all

Landlord and building insurance average say 800 a year

For positive cash flow, generally work on needing about 6.5% yields in Adelaide, 7% in Brisbane and forget it in other mainland capitals.