Future Estate - Sydney WEALTH BUILDER ANALYSIS 25-Sep-2012 Prepared for: Consultant: Property: Description:
COMPUTER PROJECTIONS Wealth Builder Start of Year Home value Home loan balance Inv. property value Total inv. properties Total of all loans Total of all values Loan value ratio Rental income Other income Total income Rental expenses Living expenses New tax Loan payments Total expenditure Cash savings Debt service ratio End of Year Total value Total loans Net worth Investment equity
2012 6.00% 0.0yr 4.00%
2.00% 2.00% 2.00% 2.00%
$80,000
$0 $0 $80,000 31.40%
1yr 0 0 400,000 1 373,111 400,000 93% 64,155 100,000 164,155 11,679 30,000 31,619 30,231 103,530 60,625 37%
Projections over 10 years 2yr 3yr 0 0 0 0 416,000 432,640 1 1 366,950 360,377 416,000 432,640 88% 83% 65,438 66,747 102,000 104,040 167,438 170,787 11,913 12,151 30,600 31,212 32,821 34,511 30,231 30,231 105,565 108,106 122,499 185,180 36% 36%
5yr 0 0 467,943 1 345,881 467,943 74% 69,443 108,243 177,687 12,642 32,473 37,800 30,231 113,146 313,297 34%
10yr 0 0 569,325 1 300,244 569,325 53% 76,671 119,509 196,180 13,958 35,853 46,395 30,231 126,437 650,685 31%
416,000 366,950 109,675 49,050
432,640 360,377 194,761 72,263
486,661 337,897 462,061 148,764
592,098 289,203 953,580 302,895
449,946 353,364 281,761 96,582
Disclaimer: Note that the computer projections listed above simply illustrate the outcome calculated from the input values and the assumptions contained in the model. Hence the figures can be varied as required and are in no way intended to be a guarantee of future performance. Although the information is provided in good faith, it is also given on the basis that no person using the information, in whole or in part, shall have any claim against Future Estate - Sydney, its servants, employees or consultants..
($) 2.000m
Building Wealth through Investment Property
1.500m
1.000m
500,000
0 0
5
10
15
20
Year from purchase Total Value
Total Debt
25
Future Estate - Sydney
Page 2 Property projections over 25 years
End of Year 1yr 2yr 3yr 4yr 5yr 6yr 7yr 8yr 9yr 10yr 11yr 12yr 13yr 14yr 15yr 16yr 17yr 18yr 19yr 20yr 21yr 22yr 23yr 24yr 25yr
Properties 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Value
Debt
Equity
Income
Expenditure
0 416,000 432,640 449,946 467,943 486,661 506,128 526,373 547,428 569,325 592,098 615,782 640,413 666,029 692,671 720,377 749,192 779,160 810,327 842,740 876,449 911,507 947,968 985,886 1.025m 1.066m
0 366,950 360,377 353,364 345,881 337,897 329,378 320,289 310,591 300,244 289,203 277,423 264,854 251,444 237,135 221,868 205,579 188,199 169,654 149,868 128,757 106,231 82,197 56,554 29,193 0
49,050 72,263 96,582 122,062 148,764 176,749 206,084 236,837 269,081 302,895 338,358 375,558 414,586 455,535 498,509 543,614 590,962 640,672 692,872 747,693 805,276 865,770 929,332 996,128 1.066m
164,155 167,438 170,787 174,203 177,687 181,240 184,865 188,562 192,334 196,180 200,104 204,106 208,188 212,352 216,599 220,931 225,350 229,857 234,454 239,143 243,926 248,804 253,780 258,856 264,033
0 103,530 105,565 108,106 110,626 113,146 115,963 118,523 121,117 123,753 126,437 87,965 134,266 137,086 139,978 143,042 146,489 150,026 153,659 157,389 161,221 165,159 169,206 173,367 177,647 182,049
Accum. Savings 80,000 60,625 122,499 185,180 248,756 313,297 378,574 444,916 512,362 580,942 650,685 762,824 832,664 903,766 976,140 1.050m 1.124m 1.199m 1.276m 1.353m 1.431m 1.509m 1.589m 1.669m 1.751m 1.833m
Future Estate - Sydney
Page 3
($)
Total Income & Expenditure
300,000
200,000
100,000
0 0
5
10
15
20
25
Years Total income
Total expenditure
Total income includes salaries, wages, all rents and income from other sources. Total expenditure includes normal living expenses, tax, all rental expenses and loan repayments.
($) 3.000m
Investment Equity and Net Worth
2.000m
1.000m
0 0
5
10
15
20
25
Years Net worth
Investment equity
Investment equity in this case refers to the difference between total market value and the total remaining debt on the entire portfolio of investment properties. Net worth here refers to your investment equity plus the equity in your own home plus any accumulated cash savings.
Future Estate - Sydney
Page 4
(Percent)
Loan Value and Debt Service Ratios
100
80
60
40
20
0 0
5
10
15
20
25
Years Debt Service Ratio
Loan Value Ratio
The Loan Value Ratio (LVR) in this case is calculated from the total of all loans and property values, including your home. It is used as a measure of mortgage security. The Debt Service Ratio (DSR) is a calculated from your total loan repayments comparing it to a combination of specified percentages of salary/wages and rental income. It is used as a measure of an investor's ability to service a loan.
($)
After-Tax Cash Flows
200,000 160,000 120,000 80,000 40,000 0 -40,000 -80,000 0
5
10
15
20
25
Years Total cash flows
Investment cash flows
The after-tax cash flow for the portfolio is used to help calculate the internal rate of return (31.40%) over the projected period (10yr).