One of the most important steps in choosing an investment property is to have the cashflow figures worked for you to make sure that the property suits your financial circumstances.

There are a number of professional programmes provided for this purpose but with any computer generated information, the output is determined by the input.

A qualified and professional property advisor will provide the assumptions their model is working on and explain why these are important.



On the basis of these assumptions after rent and tax rebates and all associated costs the property should return to you approximately $38pw.

Manipulating inputs such as anticipated rent, vacancy rates, inflation rates etc will distort the truth and impact the bottom line result, making the costs appear better than they are or implying growth in capital value and rental income that cannot be guaranteed.

Be wary of rental guarantees – these provide a subsidised rent from the developer or the vendor at higher than market rates for a limited time.These can be very worthwhile and a great way to start off with rental income right from the point of settlement BUT if the cashflow is worked on the basis of this ‘inflated ‘rent it will not give an accurate long term view of the holding costs. Sometimes they are used and after the guaranteed period ends, the property owner receives a shock when suddenly they are asked to contribute more to the property than was projected at the point of purchase. Always ask your advisor to work the figures at normal market rates to see if you are still comfortable with the bottom line.

A powerful way of looking at the affordability of a property investment purchase is to see who will actually pay to cover the holding costs of the property. In this case after rent and importantly, PAYG tax credits are collected, the property costs are serviced by both the tenant and the ATO