There are only seven fields to enter in the left hand column.
All the rest are calculated and displayed by the program after 'clicking' on the 'Check it Out' button.
To change one of the entry fields simply 'click' in the field to clear the value.
Then enter a whole number e.g. 20000, or 5. Do not enter $ or other format text. The format is
changed after the 'Check it out' button is pressed. Money amounts for prices, mortgages and loans are
displayed in currency format ($20,000), percentage symbols are added etc.
The calculated and input fields are only updated after clicking on the 'check it out button'.
Fields to Enter
Number of flats - Enter the number of flats, or units. Enter '1' for a house, '2' for a duplex etc.
This is used to calculate the costs - which are lower per unit for multiple unit properties (see Details).
Price - This is the price of the property. It is used to estimate the return and expected yield
for the property in terms of cash flow related to the purchase price.
Loan Required - This is usually identical with the price, but there may be cases where you can
use funds to purchase the property that are neither part of the mortgage or the deposit.
Deposit - This is the deposit required for the mortgage. This depends on how much you may want to
put down, and the maximum percentage lend allows by the financial institution.
Mortgage - (Calculated) This is the the mortgage required to purchase the property
(loan required/price less the deposit). It is calculated by the program. This is used to derive
the monthly repayments and for various yield and cash flow calculations. The program automatically
estimates returns and cash flow for 90% and 80% of the mortgage. This is used to give you an idea
of how the returns, yield and cashflow would change if you could reduce the mortgage.
This could occur at the time of the purchase by paying cash to reduce the mortgage, or by
increasing repayements in the first few years of the loan period.
Interest Rate - This is the interest rate for the loan. it is used to estimate the monthly repayments
for the mortgage. The repayment are calculated using standard methods for monthly repayments
of principle and interest at the specified term of the loan and interest rate.
Loan Period - This is the period for the loan in years. The monthly repayments are calculated to repay
the loan amount borrowed + compound Interest over the period specified.
Total Rent per Week - This is the total rent return per week for the property. Add the rents for all flats.
This is the gross rent before management fees are deducted
(assumed to be 7% of the rents in the cost estimates).
Fields that are Calculated (mostly as monthly estimates )
Loan Repayments - The monthly repayment are calculated using standard methods for
monthly repayments of principle and interest at the specified term of the loan and interest rate.
Rent (monthly) - The total rent return for the property each month (gross monthly rent).
Net Costs (monthly) - The estimated total costs for the property. (see
Details )
This includes estimates for rates, management fees, repairs/maintenance, grounds, insurance,
land tax and other costs. The costs estimates depend on the number of flats, and the rent
(assumes management fee is 7% of rent).
Return (monthly) - The net monthly return is the monthly rent + depreciation allowance
minus the total month costs.
Cash Flow per Month ( 100% mortgage ) - The net cash flow is the net return (rent+depreciation-costs)
minus the monthly mortgage repayment. In this case it is cash flow after paying all the mortgage (100%)
Cash Flow per Month ( 90% mortgage ) - This is the estimated cash flow after paying mortgage
repayments for 90% of the original loan. This allows you to see the effect of paying off 10% of the loan,
either at purchase or during the repayment period. This saves time and allows you to compare cash flows
for different mortgage amounts.
Cash Flow per Month ( 80% mortgage ) - This is the estimated cash flow after paying
mortgage repayments for 80% of the original loan.
Cash Flow per Month ( No mortgage ) - This is the estimated cash flow expected if you had no mortgage
repayments.
That is you were able to pay cash for the property or after you have paid off the loan. This is equal to
the net rate of return.
Yield (rent related to price) - This yield is the gross rent return per year expressed as a percentage
of the purchase price.
Yield (rent related to mortgage) - This yield is gross net rent return per year expressed as a percentage
of the mortgage loan.
Yield (cash flow - no mortgage related to price) - This yield is the net cashflow (with no mortgage
repayments) per year expressed as a percentage of the purchase price. Because the cashflow estimate
includes costs, this yield is more realistic than that based on the gross rent.
It provides an estimate of the net return from the property if and when the mortgage is repaid.
The yield estimates do not include any consideration of capital gain, as they are based on purchase price.
Score paying 100% of mortgage - The scores are based on the re-scaled cash flow estimates.
Scores of 100 or more are positive cashflow.
The 'Red', 'Orange' & 'Green' colouring system provides an instant guide for the cash flow.
Extra categories have been provided.
Score paying 90% of mortgage - This is the score that would apply if the mortgage was reduced to
90% of the original amount.
Score paying 80% of mortgage - This is the score that would apply if the mortgage was reduced to
80% of the original amount.
These scores provide an indication of the performance of the properties if the mortgage
could be reduced by cash payment at purchase or via extra mortgage payments in the
few years of the loan.
'Green' lights for the last two score indicate that the property is almost there in terms of positive cash flow.
