How the plan is worked out
Month by month
Each month adds every member's contribution, interest on the bank balance, rent collected less the property's costs and the management fee, and loan repayments with interest. New loans and loans not repaid come off.
Cash needed for the next property
The price, transfer duty and conveyancing, plus three months of levy, rates and insurance kept in reserve, so the club is never caught short while the first tenant moves in.
Questions
How does the planner decide when we can buy?
It adds contributions, bank interest, loan repayments and rent month by month. The next purchase is possible in the first month the club's cash covers the price, transfer duty and conveyancing, plus three months of levy, rates and insurance in reserve.
Why does lending to members delay the next purchase?
Loans earn interest but tie up cash until they are repaid, and some are not repaid at all. The planner shows both paths so the club can see what the loans cost in time.
What does 'rent actually collected' mean?
The share of the rent that really reaches the bank after arrears and empty months. A rental collected at 89% loses about one month's rent a year.
Should the club buy with a bond?
Only if the property earns more than the bond costs. At prime plus 1%, many rentals earn less than the bond, so paying cash is often cheaper even if it takes longer.