Investment Calculator User Manual V1.1
Contents
1. ae MyiVioneyCalculator Page 7 Of 29 Purchasing An Investment Property If you are a first time property buyer and are unaware of some of the terminology used in a calculator what some of the input areas mean or what they are for you may find the Rental Properties Guide useful The following provides an explanation and rough estimate of what you can expect for each individual field that relates to property purchase in the calculator Purchase in how many years from now The calculator works using years There are 30 years of calculations This means that investments can be purchased at the end of any year over the 30 year period You can purchase an investment today now by entering a zero Example John wants to see the outcome of purchasing a property this year He can enter a zero and this will mean that the property is purchased now The money for any deposit will be taken from his savings account now He will also start paying any expenses over the course of the 1st year and start receiving rent over the course of the Ist year The calculator will display that 0 years from now the property was purchased and in 1 year from now the total rent received during the 1st year and any expenses will be displayed John s Cash Flow would look something like below es i 50 000 10 000 a MyiVioneyCalculator Page 8 Of 29 Income Details Weekly rental income The rent you receive on a property can vary wildly dependi2. There have also been compatibility issues reported for Excel 2010 64 bit Other steps you can try to get the calculator running The Investment Calculator makes use of an Excel add in Often Excel can become damaged and files corrupted A repair is extremely easy and quick to perform and can often resolve many issues 1 Repair Excel See here for steps on how to do this for Excel 2003 Excel 2007 Excel 2010 2 Install the Analysis ToolPak in Excel while the Investment Calculator is not running aa MyiVioneyCalculator Page 27 Of 29 The Analysis Toolpak that is required for the calculator to function correctly It is an add on to Excel that just isn t installed by default My suggestion is to install the toolpak in Excel then try running the calculator This is because the calculator tries to install the Analysis Toolpak when it is opened if it is not already installed on in Excel There may be a conflict or permission error when this is attempted Please see the Downloading and Installing Page for instructions on how to install the Analysis Toolpak I get a warning from my computer when I try to open a calculator When opening the calculator your computer or anti virus program may give you a warning message This is because the calculator is in the exe file format Anti virus programs are not very friendly towards many exe type files There is no malicious material or code in any of the calculators and they are all 100
3. an issue with using the links in the reports page from the Entire Situation Section This issue has been fixed I m seeing N As If you have entered a name for an investor or property you may see N As on a reports page This is because the calculator has a default name selected on the reports and when you enter a new name the calculator can t find the default anymore Solution Use the which investment investor would you like to see dropdown and choose an investment or investor N As may also appear because the calculations require the Analysis Toolpak to be installed and you are using a version of excel that does not have it installed To install the Analysis Toolpak for Excel 2003 follow the instructions here For Excel 2007 or 2010 follow the instructions here I m seeing VALUE s This has most likely happened because you have put text into a box that is supposed to only have numbers Solution Go through the inputs sections and make sure that the right boxes have numbers and the right boxes have text Why can t I save You need to have a registered copy of the Investment Calculator in order to save a scenario To get the registered version please click here aa My iVioneyCalculator Page 29 Of 29
4. safe to run They are in the exe file format for copy protection purposes and in order to allow advanced functions such as saving and loading different scenarios Ensuring your computer can run the property calculator with no errors The calculator requires Excel 2000 or higher and Windows 2000 or higher Some users have reported issues with Excel 2010 64 bit Excel must have the Add in Analysis Toolpack installed To install the Analysis Toolpak follow the instructions here The Investment Calculator won t open anymore The standard and pro editions of the Investment Calculator are free to use for 7 days After that period you will not be able to open the Investment Calculator You will need to obtain a registration key in order to unlock the full version of the Investment Calculator Click here to see how to obtain your registration key ae MyiVioneyCalculator Page 28 Of 29 I already have a registration key For the Investment Calculator to open the registration key must be in the same folder as the Investment Calculator Example The Investment Calculator is saved in My Documents The registration key file must also be saved in My Documents The registration key must not be renamed It must have the same name as the application Investment Calculator in order for it to work correctly Using the Investment Calculator The links in the reports page don t work In Investment Calculator versions prior to version 1 3 09 there was
5. triangles in the top right This indicates that there is a comment there to help you with the box a MyiVioneyCalculator Page 6 Of 29 Saving information from a calculator You can save multiple scenarios from data you have put into a calculator Note that you can only use this feature with a registered copy of a Calculator You cannot save new data using the trial version See buying the Investment Calculator for more info To save a scenario simply click the Save Scenario button at the top right of any page in the Investment Calculator Note that if no fields have been changed you will not be prompted to save You can choose any name for your save file e g George 2 Investment Properties scenario and you are able to store it anywhere on your computer Opening Previously saved scenarios You can open any previously saved scenarios by clicking Open Scenario at the top right of any page in the Investment Calculator Simply navigate to your saved data and choose import Loading saved data from a previous version of the Investment Calculator into a more recent version may cause the data to be imported incorrectly A warning message will appear notifying you that this may be the case however unless dramatic changes have occurred from the version you are trying to load from the data should load correctly Note that opening saved data will overwrite anything you currently have entered into the Investment Calculator
6. what conveyancing is please see our Investment Property Conveyancing Guide You can get an online quote from many property conveyancers One such service will provide a quote for all types of property for any state http www ozpropertylaw com conveyancing quote buying You can expect to pay around 500 1 500 for conveyancing on a residential apartment valued under 1 5million Other Purchase Costs Other purchase costs may include costs such as inspection fees Housing NSW Provides an estimate of how much you can expect to pay in inspection fees Building Inspection A building inspection checks structural soundness and lists any visible defects and necessary repairs Approximate cost 300 700 Pest Inspection A pest inspection checks for any signs of past or present pest infestation Approximate cost 200 350 Strata Inspection A strata inspection examines and reports on the written records of the owners corporation It is additional to the certificate that the seller supplies providing relevant information about strata levies insurances Approximate cost 200 350 a MyiVioneyCalculator Page 12 Of 29 Borrowing Costs The calculator will allow you to account any borrowing costs that arise as the result of borrowing money to finance the property purchase These may include e Stamp duty charged on the mortgage e Loan establishment fees e Title search fees e Mortgage broker fees e Valuation fees
7. 00 with 5 p a capital growth At the end of year 3 the value of the shares will be 10 000 At the end of year 4 the value will have grown by 5 500 so you will see the year 4 value of 10 500 Example purchase a property in 3 years The property will be purchased at the very end of the 3rd year Because it was not held from the very start of year 3 no cash flows will occur in year 3 In year 4 you will a full years cash flows will occur a full year of rent will be received a full years worth of expenses will be paid etc because the property was owned from the very beginning of year 4 Cash Flows Cash Flows are separated into 2 sections 1 Cash from salary and investments Ongoing Cash in and Cash out relating to your investments amp job 2 Cash from financing Money coming in or out from drawing down loans repaying loans purchasing assets or selling assets These 2 sections are added together to give the total cash flow If the total cash flow is positive it is paid to your savings account home loan or line of credit depending on what which you have a MyiVioneyCalculator Page 17 Of 29 chosen in the personal details section If the total cash flow is negative the amount will instead be taken from one of the above accounts How is the money allocated You can choose where to put the money that is left over in the personal details section You can either add it to your savings account or pay down your home loa
8. ain aa MyiVioneyCalculator Page 5 Of 29 Help With Entering Information Into The Calculator This page goes through each input field one by one and explains what it means what kind of value you can expect and provides links to helpful Investment Guides If you would like further help please don t hesitate to contact us Putting information into the calculators An input section is where you can enter information Each input section relates to a certain area e g your properties your Shares etc All sections and fields are optional so you can customize the situation exactly how you want The Home Page shows you the 7 different sections and lets you jump to each one by clicking on its heading Once you have entered all the information you want click the Calculate or View Results button on the home page to go to the reports page On the reports page you will see 2 main reporting sections One for your entire situation and another for your individual investments There are different reports available within each Changing inputs You can only enter info into boxes that look like below C These boxes have a border surrounding them and so can be edited in the inputs Some boxes only allow certain values in order to make the calculations valid If you enter a value that is not allowed e g putting text into a numbers only field then an error message will appear and not allow the incorrect entry to be made Many boxes have red
9. also be sold when the property is sold either with the property or separately The Fit Out value comprises part of the property value There are no tax effects on what happens to the fit out because the fit out depreciation claimed every year means that no tax will be payable or refundable on the sale Fit Out does not affect capital gains a MyiVioneyCalculator Page 20 Of 29 Franking Credits amp Dividends Franking Credits are calculated according to the following formula Div Tc 1 Tc fp Tc company tax rate fp franking percentage Div Cash Dividend Received The cash dividend is treated as a cash flow if not re invested If re invested the value is used to purchase more shares units at the share unit price at that time The grossed up dividend amount is what is used to determine your taxable income from shares managed funds Franking Credits are added to the cash dividend figure to give the grossed up dividend amount They are then used to offset your tax payable If the franking credit offset is greater than your tax payable you will receive a refund equal to the difference If you would like to see how franking credits work in general you can see our Franking Credits Explained guide in the Investment Guides area of the site You can also use our online Franking Credits Calculator to calculate the franking credits on your cash dividends Capital Gains Tax Example You can choose the year a property w
10. ary and investments to produce the total cash flow figure If the total cash flow is positive and you have no line of credit drawn down it is paid to either your savings account or home loan depending on what which you have chosen in the personal details section If you have a line of credit drawn down the cash will first be used to pay down the line of credit If the total cash flow is negative the amount will instead be taken from one of the above accounts Using the example above You have 80 000 left over from your salary and expenses and 20 000 in the bank from last year The 100 000 shortfall will be covered by the 80 000 left over and 20 000 will be taken from your bank account a My iVioneyCalculator Page 25 Of 29 Assets Loans Net Worth Year 0 shows today or now Year 1 shows balances at the end of year 1 For a break down of individual investment loan repayments or the equity in individual loans please see the Individual investments reports or Cash flow from financing report Taxes To see a full breakdown of how the Net Taxable Profit or Loss is calculated for each investment see the Profit Loss page in the Individual Investments section For all the assumptions relating to tax click here Individual Investments Reports Profit Loss Total Taxable Expenses and Total Cash Expenses will differ by the amount of the non cash elements Borrowing Costs and Depreciation are tax deductible but are not actual ongoin
11. as purchased for any existing properties If the property was purchased before 1985 no capital gains tax is payable If the property was purchased before 1999 the capital gain is calculated using both the indexation method and the discount method The lessor of both is used For any purchase after 1999 the discount method is used since the indexation method is not allowed The cost base adds selling costs and purchase costs and subtracts construction depreciation claimed in previous years John sells a property for 814 447 that he bought for 500 000 He paid purchase costs of 17 990 in stamp duty and 250 in loan set up costs When he sold the property he paid 10 000 in selling costs He had also claimed 62 500 in depreciation over the time he held the property a MyiVioneyCalculator Page 21 Of 29 Calculation Sale Price 814 447 Minus Cost Base Purchase Price 500 000 Depreciation Claimed 62 500 Selling Costs 10 000 Purchase Costs Stamp Duty 17 990 Loan Set Up Costs 250 Total 465 740 Capital Gain 348 707 50 discount Divide by 2 Taxable Capital Gain 174 354 Since John had held the property for more than a year he can apply the 50 capital gains tax discount making the total taxable capital gain 174 354 Capital Losses are carried forward and are used to offset future capital gains tax payable only Capital losses cannot be used to offset future tax payable on income The calculations used have been fully co
12. centage of time that the property will be vacant each year It is often the case that when tenants change there will be a period for which the property is vacant and is not being rented out You can enter a percentage to tell the calculator what percentage of the year you expect the property to be vacant for 1 day is equivalent to around 0 3 Example Alana estimates that her property will be vacant for 7 days a year while she finds new tenants This is equivalent to 7 days 365 days 1 9 a year She expects the weekly rent received to be 500 a week however she will miss out on week s rent because the property will be vacant this means the rent received for the year will be 500 x 51 weeks 25 500 Expense Details Expenses should be entered as annual amounts and should only be entered if you are the one who pays and not the tenant If the tenant pays the expense you will not receive a tax deduction for it and it will also not be a cash outflow There are a numerous options in the calculator for expense details and rather than run through each one in detail here you can find all the information on each field in our guide Investment Property Cash Expenses amp Tax Deductions ae MyiVioneyCalculator Page 10 Of 29 Purchase Details For additional help to what is provided here you can read the Purchase Costs For An Investment Property or Home Guide It is published by Housing NSW however it is relevant for all other Sta
13. d on your lifestyle aa MyiVioneyCalculator Page 24 Of 29 The Total Cash Surplus or Cash Deficit includes the lifestyle expenses and one time expenses as well as 2 more amounts 1 Net Loan Drawdowns Repayments e Any loans you have created or repaid includes principal payments on your home or investments 2 Sale of Assets Purchases of Assets e Money coming in from selling an investment or money being used to purchase an asset These 2 items come from the Cash Flow From Buying Selling amp Loans Section The Where does the money go Section shows where the Total Cash Surplus Deficit will be paid to or taken from If the Total Cash Surplus Deficit is positive it represents a cash surplus and will be paid to one of the accounts listed If it is negative it is a deficit and must be taken from one of the accounts Cash flow from Buying Selling amp Loans These items relate to money coming in and going out from any purchases sales or principal repayments A full breakdown is below Example you purchase a 500 000 investment property using 400 000 borrowed from the bank and 100 000 of your own money You receive the 400 000 from the bank You pay out 500 000 for the investment property The 100 000 shortfall will appear as the Net Cash Flow From Buying Selling amp Loans Where does this figure go The net cash flow from financing feeds is combined with the cash flow from sal
14. d your overall situation This area provides help with reading and understanding what these reports mean The three different report sections There are different sections available in the reports page depending on the calculator you are using For the Investment Calculator you will see the following reporting sections 1 Entire situation 2 Individual Investments 3 Super Your entire situation will give the full overview of all your investments combined with your salary bonuses living expenses etc It shows you everything you have put into the calculator Only totals for each investment is shown The individual investments section is for viewing each investment in depth You can see how all the totals for the entire situation reports are calculated Click on a heading to be taken to that report then simply choose the investment you wouldlike to see in the drop down list under which investment would you like to see Entire Situation Reports Cash from salary and investments These are the ongoing cash in and ongoing cash out income and expenses relating to your investments and job The net cash flow from salary amp Investments figure here will give you the best estimate of your regular cash left over each year from all your investments and salary Note that the net cash flow from salary and investments does not include lifestyle expenses and other one time expenses in order to give a full idea of how much you have left to spen
15. dations The following formula is used Deduction Construction Cost Deduction Rate Note that depreciation for construction depends on the year of construction chosen e f purchased before 1979 there is no period over which a deduction can be made e f purchased between 1979 and 1983 or after 1986 there is a 40 year period a MyiVioneyCalculator Page 19 Of 29 over which a deduction can be made at rate of 2 5 each year e f purchased between 1984 and 1986 there is a 25 year period over which a deduction can be made at a rate of 4 each year The construction depreciation is counted as capital works by the ATO and so reduces the cost base for the property for capital gains tax calculations This follows the ATO guidelines 2 Depreciation for Fit Out These items relate to fixtures and fittings such as fridges furniture and TV The prime cost method is used as specified by the ATO The formula used to calculate the deduction is Deduction Fit out Cost 100 Asset s Effective Life Where the fit out cost is the value chosen in the properties page The Asset s Effective Life is 30 years from the date of property purchase for proposed properties and from today for existing properties for simplicity purposes What happens to the fit out when I sell the property The fit out is no longer used for investment purposes once the property is sold and so is no longer deductible It is assumed that the Fit Out will
16. e Lenders mortgage insurance fees Please see our Property Borrowing Costs amp Tax Deductions Guide for more information on how borrowing costs work Loan Details Total Acquisition Costs This is calculated automatically by adding the Total Purchase Price and the Total Borrowing Costs It is the total cost of acquiring the property Deposit The deposit is how much you will pay yourself This amount will be taken immediately from your savings account or if there are insufficient funds there will be a credit facility set up Loan Amount Required The loan amount required is calculated automatically as Loan Amount Required Total Acquisition Costs Deposit Example Tom purchases an investment property today that is valued at 500 000 and has a total acquisition cost of 520 000 He has 60 000 in savings and he uses 50 000 as a deposit for the a MyiVioneyCalculator Page 13 Of 29 loan that is required to fund the entire acquisition cost This will leave a loan amount required of 470 000 The calculator would display Tom s Cash Flow as below Years From Now Asset Purchases 520 000 Loan Drawdowns 470 000 i 50 000 The 50 000 would be taken from Tom s savings account immediately Principal amp Interest or Interest Only This is the payment type for the loan You can select principal and interest payments or interest only payments The Principal is amortized reduces at the payment frequency chosen T
17. en be emailed to you within 48 hours 5 Keep the registration key file and the Investment Calculator in the same folder to unlock your registered version If you have any questions please don t hesitate to contact us or you can leave a reply at the bottom of the page aa MyiVioneyCalculator Page 2 Of 29 Payment security My Money Calculator uses PayPal the faster easier way for accepting payments PayPal uses SSL technology to ensure that all payments made are as secure as possible You do not require a Paypal account to pay through PayPal How do I find my unique Computer ID You can always find your unique computer ID by clicking the About button at the top of any page The Computer ID will be visible and you can press Copy Computer ID You can either paste it into the ID field on the payment page or send it to support mymoneycalculator com au once your payment is complete B BG About myMoney Calculator Application myMoney Calculator Version 1 2 14 Application is UNREGISTERED Application legal copyright Copyright myMoney Calculator This application was created by using DoneEx XCell Compiler Your Computer ID 754G AHMVV VWJRX INTI HPP4 Copy Computer ID al 1 MyiVioneyCalculator Page 3 Of 29 Downloading amp Installing The Investment Calculator Help and info on downloading the calculator and getting it running on your PC If you are having trouble with getting the calculator to run please al
18. g cash payments Borrowing costs are paid at the outset of the loan If you want to see a graph of cash or tax profit and loss see the Investment Summary Report How much your investment will cost you Tax savings from losses in previous years are not included in this page If the out of pocket profit cost is positive the how the costs will be paid pie graph will be somewhat irrelevant ae MyiVioneyCalculator Page 26 Of 29 Errors Help Refer here for common errors that some users experience when trying to download open or use the Investment Calculator I have found an error that is not listed here Whilst every effort is made to ensure that the calculators are error free as with any software bugs can occasionally arise The calculators are updated almost every month with new features bugfixes and new calculations You can view the updates here to see if the error you are experiencing has been solved already If you should find what could possibly be an error please contact us or leave a reply at the bottom of the page and we will resolve the issue immediately Downloading or opening the Calculator In addition please see the Downloading and Installing Help Page The Calculator Won t Open or Closes Immediately Please ensure that your computer is compatible with running the calculator Requirements Windows 2000 or greater Excel 2000 or greater Currently the Investment Calculator will not function on a MAC
19. gl MylMoneyCalculator Investment Calculator User Manual V1 1 Table Of Contents Welcome Unlocking the full version of the Investment Calculator Downloading amp Installing The Investment Calculator Help With Entering Information Into The Calculator Purchasing An Investment Property Income Details Purchase Details Loan Details Selling A Property Assumptions amp Calculations Reading Reports Errors Help oO on A N N 11 13 15 17 24 27 Welcome Dear investor wealth creator Congratulations on purchasing or trialing my money calculator we hope you get value out of using this amazing tool to help you make better investment choices Please refer to this guide to get started and to also answer any queries you may have in operating the software Feel free to contact support at support mymoneycalculator com au if you need additional help outside the use of this manual Again thank you for downloading and becoming a subscriber to the investment community of my money calculator Invest with success The team at MMC Unlocking the full version of the Investment Calculator How do I buy unlock the full version Unlocking the full version of the Investment Calculator is easy and secure 1 Choose your version and click Buy Now on the Buy Now Page 2 Choose your payment method and complete the payment 3 Email us your computer ID Instructions here 4 Your unique registration key will th
20. he interest payable also follows the payment frequency chosen Loan Term This is how long you expect the loan term to be This is a powerful field because it allows you to see what will be the cash flow effects of trying to pay down a loan in different time periods You can change the Loan Term and the calculator will automatically change the amount of the principal payment you make each period to pay down the loan over that term Payment Frequency You can change the payment frequency between the 3 most common options monthly fortnightly and weekly Note that the loan will be paid down in the Loan Term you specify Changing the payment frequency will not make the loan be paid down any faster Changing the loan term will however change the interest payable for the year You can see our Monthly Vs Fortnightly Home Loan Payment Guide for more information on the difference between payment frequency Interest Rate aa MyiVioneyCalculator Page 14 Of 29 The Free investment calculator will allow you to choose the interest rate over the life of the loan The Standard and Pro versions will allow you to vary the interest rate in any year that you want to via the Yearly Changes page Calculated Payment The principal and interest or interest only payment is calculated automatically and shown in the loan details section to give a quick idea of the amount Selling A Property Sell In How Many Years The calculators will allow you
21. ling The Calculator We know you ll like this no installation is required The exe file is all that is needed To uninstall simply delete the exe file The Analysis Toolpak The Analysis Toolpak allows advanced finance calculations in excel The Analysis Toolpak must be installed or the calculator will not function correctly Don t worry it s already in excel and free but just isn t running by default You only need to install it once The calculator should install the analysis toolpak automatically if it is not already installed however if a problem occurs you can see how to install the Analysis Toolpak manually How to install the Analysis Toolpak in Excel 2003 gt gt How to install the Analysis Toolpak in Excel 2007 or Excel 2010 gt gt Opening The Calculator Anti virus programs When opening the calculator your computer or anti virus program may give you a warning message This is because the calculator is in the exe file format Anti virus programs are not very friendly towards many exe type files There is no malicious material or code in any of the calculators and they are all 100 safe to run They are in the exe file format for copy protection purposes and in order to allow advanced functions such as saving and loading different scenarios License agreement A user license agreement will appear when opening for the first Please read this carefully and click I accept when done The license agreement will not appear ag
22. n Note that if you choose the home loan option once your home loan reaches 0 any surpluses will automatically be added to your savings account What if my cash flow goes negative The calculator will first drawdown any savings that you have When your savings reach 0 a line of credit will be drawn from The line of credit can be seen as drawing on any equity you may have such as your home your investments or drawing from a credit card Interest will be charged at the same interest rate chosen for savings If you begin to see increasingly large amounts in the line of credit account it is a good indication that you can t afford the investment strategy Super Compulsory Contributions 9 of your salary and bonuses is added to super Using a percentage ensures any changes to your salary or bonuses also work into your super Example you enter a salary of 95 000 and a bonus of 5 000 to make a total of 100 000 9 000 will be contributed to super and you will be paid the full 100 000 making a total of 109 000 in super salary and bonuses Contributions Caps e For people older than or equal to 50 there is a 50 000 cap for financial years 2010 2011 and 2011 2012 2 more financial years this 50 000 is static e For people under 50 there is a 25 000 cap that increases with the inflation level chosen e Bring forwards are not capable for people gt 65 a MyiVioneyCalculator Page 18 Of 29 Income Tax Where possible the
23. nfirmed with the ATO Shares Managed Funds The average price paid method is used Shares units are purchased at a price that increases each year at the chosen capital growth rate a MyiVioneyCalculator Page 22 Of 29 Inflation The rate of inflation can be chosen The inflation rate will not change any investment values or income from investments Investment value growth rates and income rates are chosen separately The following items increase automatically with the chosen rate of inflation each year e Ongoing property expenses including Accounting Body Corporate Fees Council Rates Repairs and Maintenance Electricity amp Water Charges Borrowing Expenses Insurance Land Tax Other Ongoing Deductible Expenses e Lifestyle Expenses e Salaries e Bonuses e Ongoing Super Fund Fees S p a e Ongoing Non concessional Contributions You have the option as to whether the following items automatically increase with the chosen rate of inflation e Other ongoing expenses The Investment Calculator allows you to make changes in different years in the Yearly Changes page The value you enter will be higher in the calculations by the inflation level at that time If you do not want to see the effects of inflation just change the inflation rate to 0 a MyiVioneyCalculator Page 23 Of 29 Reading Reports The Investment Calculator creates a number of great reports that provide a lot of detail about an investment an
24. ng on factors such as the area s growth rate the condition of the property and property market conditions A good rule to follow when calculating the weekly rental income you can expect to receive is that for every 1 000 of property value you can expect to receive 100 in weekly rent So for a 500 000 property you can expect to receive 500 000 1 000 500 This is equivalent to roughly a 5 rental yield Example Jane is looking to purchase a 350 000 investment property and doesn t know how much rent she can expect to receive Expected rent 350 000 1 000 350 p week Annual rental growth rate A property s rental income may not always grow at the same rate as the property value For this reason the rental growth rate and property growth rate have been separated The rental growth rate is independent of any inflation rate entered in the calculator Example John expects to receive a weekly rental income of 600 on his property in the first year He estimates the annual rental growth rate as 3 p a In the first year he will receive 600 x 52 31 200 Next year he will receive 600 x 1 03 618 a week in rent This is equivalent to 32 136 a year The calculator will display the following results C T T Why does John not receive any rental income in year zero Please see how the yearly calculations assumptions aa MyiVioneyCalculator Page 9 Of 29 Annual Vacancy Rate The annual vacancy rate is the per
25. r to choose a sale value yourself Chosen Sale Price This will let you override the calculated value for the chosen sale year and enter in your own estimate of the sale price Note you must also select choose in the sale price drop down to override the calculated value Selling Costs The costs of selling a property can actually be quite extensive and can include e Real estate agent costs e Commission charged e Advertising costs e Auction costs e Government Charges e Discharge of mortgage registration e Bank Fees amp Charges e Preparation amp or Execution by Bank of Discharge of Mortgage e Settlement Fee e Early Exit Fee e Prepayment Fee a MyiVioneyCalculator Page 16 Of 29 Assumptions amp Calculations Here we give a bit of an understanding of how some of the calculations are performed in the Investment Calculator and the assumptions used How does the timing work The projection period begins at Year 0 This symbolises today or now Example purchase a property in year 0 This is saying purchase the property now The property value will come in now you will start receiving any rent now and you will have to start making any repayments now Any deposit required will be taken from your savings account or line of credit that you have entered as your existing balance Year 1 represents the end of the 1st year Year 2 represents the end of the 2nd year etc Example purchase shares at the end of year 3 for 10 0
26. so see our Errors page The Investment Calculator is a spreadsheet wrapped as a exe file to allow advanced features and copy protection We use excel as it is the standard in the finance industry and allows us to spend more time adding features instead of writing code System Requirements The calculator currently requires e Excel 2000 or higher e Windows 2000 or higher We are in the process of adding support for Macs If you are running multiple versions of Excel you can see how to choose which version the calculator uses here Excel 2010 64 bit There have been some issues reported for users running Excel 2010 64 bit This is common for Excel 2010 64 bit as most add in developers create their add ins to be compatible with the 32 bit version only Click here to see a diagram of how to find out what version of Excel 2010 you are running Downloading Submit your details on the download form An email will be sent to the email address you specified to make sure that you ve provided a valid email address and that you are not a machine The email will contain a link to the download area This allows you to access the download area at any time in the future Choose the version or versions you want to download and click the download button After clicking download you can either run or save It is recommended to save the calculator to your desktop for easy access a My iVioneyCalculator Page 4 Of 29 Installing amp Uninstal
27. tax calculations performed in the calculators have been checked and verified correct with the ATO Income Losses are carried forward and are used to offset future tax payable on income only They cannot be used to offset future capital losses Tax concessions and offsets such as LITO Family Tax Benefits etc are not included The only tax offset that is included is franking credits The Investment Calculator allows you to choose the tax rates used in the personal details section These rates will be used throughout the calculations Tax rates cannot be varied into future years we are currently adding support fo this You can enter custom tax rates from the personal details section Medicare Levy The Medicare Levy is calculated as 1 5 of taxable income Because the Medicare Levy tax laws are quite complex to make things simpler the Medicare Levy of 1 5 is always added There is no Medicare Levy reduction for low income earners in the calculations There is the option to choose whether to apply the Medicare Levy Surcharge or not via the Investor Details page under Inputs Check out our Medicare Levy Surcharge and Medicare Levy Explained Guide for more info on the Medicare Levy You can also use our online Income Tax Calculator for simple calculations Depreciation Check out our How Does Depreciation Work With Investment Properties Guide for a more general explanation about depreciation 1 Construction aka Building amp Foun
28. tes amp Territories The total purchase price will form the cost base for the investment This will affect the capital gains tax payable if the property is sold To see how capital gains tax is calculated please see the assumptions on the help amp support page Property Value This is how much the property is valued at including land and construction Property values will vary depending on e Property type apartment unit house e Location e Condition of the property The property value will grow each year at the property value growth rate specified Example Dave purchases an investment property worth 450 000 now and expects the property value to grow at 5 p a In Year 0 now the property will be worth 450 000 and at the end of the 1st year it will have risen 5 in value to 450 000 x 1 05 472 500 The calculator will display the following e S Proposed Property Value 450 000 472 500 State of Purchase The state is used purely to determine that stamp duty payable Stamp Duty on Purchase a MyiVioneyCalculator Page 11 Of 29 Stamp Duty is automatically calculated based on the State of Purchase If you need more help understanding Stamp Duty or want to see the relevant information including discounts government grants and stamp duty rates you can see the relevant state stamp duty guide below You can also use our Free Online Stamp Duty Calculator Conveyancing Legal Costs For help understanding
29. to sell a property at least one year after having purchased it The Sale of the property will occur after however many years you specify Example James is planning on purchasing a property valued at 500 000 in 1 year from now and selling it in 3 years He believes the total acquisition costs will be around 520 000 and he will be using a 50 000 deposit and a 470 000 interest only loan from the bank He hopes the property will grow at 5 p a over the 3 year period Let s assume no tax on capital gains for the purposes of illustration The calculator will display James assets and loans something as follows Savings Account 60 000 10 000 10 000 91 250 Property Value hs 500 000 525 000 Loan Amount az 470 000 470 000 i 60 000 40 000 65 000 91 250 James Cash Flow From Financing will look something like below ae rr ee ee ae My iVioneyCalculator Page 15 Of 29 So at the end of year 3 James has sold his property and received 551 250 dollars He has also paid off the loan on that property and this will leave him with 81 250 which he puts into savings Note there are also capital gains tax calculations in the calculator that will mean the amount actually received by James will be less Sale Price The calculator will automatically calculate the value of the property in the sale year given the property growth rate that you have specified The Sale Price option allows you to either use the calculated value o
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