Year 1 — After-Tax Cash Position
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Invest — Cash Out
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per year
PPR — Cash Out
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per year
PPR Saves vs Invest
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per year
Tax Benefit (Invest)
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neg. gearing + depn / yr
Gross Rental Yield
—
gross rent ÷ price
Net Rental Yield
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net rent less costs ÷ price
Full P&L — Side by Side
Line Item
📈 INVEST
🏠 PPR
Income & Allowances
Rental income
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Vacancy allowance (4%)
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—
Owner occupier rent saving ($—/wk)
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—
Net rental income / Saving
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—
Loan Repayment
Loan interest
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Principal reduction
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—
Total loan repayment
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—
Operating Expenses
Property management (0% of rent)
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$0 ✓
Rates and charges
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Water and sewerage
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—
Insurance — buildings
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Insurance — landlord's
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$0 ✓
Repairs and maintenance (0.25% of value)
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—
Land tax
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$0 exempt ✓
Subtotal: Operating expenses
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—
Owner Occupier Position
Owner occupier rent ($—/wk)
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$0 — living here ✓
Pre-Tax Position
Net cash position before tax
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—
Tax & Deductions (Investment Only)
Deductible loss (negative gearing)
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n/a
Depreciation (plant & equipment, $0/yr)
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n/a
Tax benefit (negative gearing + depreciation) @ 45%
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$0
TOTAL AFTER-TAX CASH OUT
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Annual saving: PPR vs Invest
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Net Equity Position — Hold Forever
| Yr | Equity | INV Net Pos. | INV Opp. Adj. | PPR Net Pos. | PPR Opp. Adj. |
|---|
Net Pos. = Gross equity minus cumulative cash injected. Opp. Adj. = Adjusted for opportunity cost on the difference in cash injection between scenarios (PPR vs Invest). The extra cash PPR requires, if invested at 5%/yr, would grow to... Lower Opp. Adj. for PPR means the extra cash drag is significant. IO mode: loan balance stays flat. No sale, no CGT.
30-Year Net Equity Position
Gross equity minus all cumulative cash invested (no sale, no CGT)
Investment (after neg. gearing, incl. own rent cost)
PPR (ownership cost net of rent saved)
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