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"Cash-flow" Assessment
Understanding complicated rental investment returns
rentagain.nz homeIf "Costs" exceed "Incomes" properties are sold
"Costs"
● Operations maintenance, rates, insurance, administration
● Interest hire for the capital that holds the rental
● Replacements of items that rust wear & rot
● "Ring-fencing tax" (from April 2023)
● Interest Tax (ends 31 March 2025)
"Incomes"
● Rents
● Capital value growth
This XL spreadsheet converts costs and incomes into weekly amounts then totals them to show a weekly "cash-flow".
1) Download a copy of the calculator - Click here
2) Change the default yellow cell values for your property
● Yellow cells default for a modest, 2024, 2 br Timaru rental house
● Users can save a calculator spreadsheet for each rental unit
● Some inputs may require professional guidance for best results
● Inputs (and results) can be made for any time period
E.G Current 1, 2 or 5 years, OR Last 5 or 10 years, OR
estimated projection for future 5 or 10 yrs
When rental homes consistently show negative "cash-flows" they are usually considered unsustainable for a rental business
"Cash-flow" is NOT "taxable income" It considers unpaid interest on capital, value of owners' plus unrealised wages for owner's administration and maintenance work time. .
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Before selling an unsustainable rental home, owners should always seek advice from an experienced qualified financial adviser.