ESTIMATED SAMPLE CASH-FLOW MELBOURNE APARTMENTS

How does negative gearing work? Turning a cash flow negative property, into a positive cash flow property, using negative gearing.

SIMPLIFIED (For Indication Only)

ASSUMPTIONS:

PURCHASE PRICE $800,000 OFF PLAN OR BRAND NEW

LOAN 80%:              $560,000

INVESTMENT  LOAN TERM:   5 YEARS IO, THEN 25 YEARS PRINCIPAL AND INTEREST, INTEREST RATE 6%
GROSS RENTAL :  $40,000 YEAR ONE

GROSS YIELD: 5.00%  YEAR ONE

CASH FLOW- YEAR ONE

GROSS RENTAL INCOME +$40,000 pa

LESS OWNERS EXPENSES PER ANNUM: TAX DEDUCTIBLE

BODY CORPORATE         -$ 6,200

GOVERNMENT RATES     -$ 1,400

LOAN INTEREST             -$33,600

RENTAL AGENTS FEES    -$ 3,255

TAX AGENTS FEE            -$   450

NETT CASH POSITION -$  4,905

TAX REFUND (EST)        +$7,764 (ASSUME SINGLE INCOME$130K)

CASH FLOW POSITIVE +$  2,859 

Disclaimer: Note that the simplified cash flowprojections listed above simply illustrate the outcome calculated from the input values
and the assumptions contained. 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 Citylife International Realty Limited,
its servants, employees or consultants..