When it comes to property investment, it’s easy to get excited and make spontaneous decisions. But the repercussions of your actions could last for years.
‘Think of property investment as an ongoing process with ongoing consequences, not as a one-off transaction,’ advises Richard Crabb, managing director of the Aspire Property Advisor Network.
‘It’s akin to running a business for the long term, and you should treat it as such. That means analysing the numbers from all angles before you make any big purchases.’
Thankfully, there are plenty of tools online to help you do just that. Whether you have a specific property in your sights or are simply curious about your options, the following calculators will help you make sense of the money side of things.
Income tax
Before you start researching properties and sketching out a long-term investment plan, it’s crucial to know exactly how much money you will be making each year in net terms (that is, after tax has been deducted). Moneysmart’s Income Tax Calculator does the sums for you based on your gross income (that is, your income after salary sacrificing but before tax has been deducted) measured weekly, fortnightly, monthly or annually. The calculator also allows you to include other sources of taxable income such as share dividends.
Budget planner
Once you know how much money you’ll be making after tax, it’s time to look at your expenses. Moneysmart’s Budget Planner is an easy way to add up all your regular costs and see whether you’re spending more or less money than you’re earning each month. Needless to say, your goal is to finish each month in the black so you have money left over to service a mortgage, cover unexpected property costs (such as maintenance or rental vacancy) or save for your next investment. Using the Budget Planner, you can tweak your numbers until you reach an ideal position.
Mortgage calculator
The handy Mortgage Calculator tool from Moneysmart is actually three calculators in one. Firstly, you can use it to calculate how much your mortgage repayments will be for a specific property (you can also vary the interest rate to get an idea of how much more or less you will need to pay if rates change). Secondly, you can find out the maximum amount you can borrow by specifying how much you can afford to pay each month. Thirdly, you can compare two monthly payment amounts and see how much sooner you could pay off your mortgage by chipping in extra.
Stamp duty
The amount of stamp duty you’ll need to pay depends on the state or territory where the transaction is made and the value of the transaction. Rates can vary significantly from state to state, so check out the Federal Government’s stamp duty information page for links to each state and territory’s stamp duty guidelines. Some states also offer calculators on their websites to help you crunch the numbers.
At your fingertips
For easy reference, you’ll find links to all the calculators and tools mentioned on DHA’s Investment Calculators page.
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Attention: DHA does not take into account an investor's objectives or financial needs. Investors should always seek appropriate advice before making any investment decisions with DHA.