Estimated Return to Investors

1. The rental return is based on 3 years 5.5%gross lease.
   
   
2. Estimated Annual Depreciation Deduction: Based on the project Quantity Surveyor's construction budgets, an estimated annual depreciation deduction for a typical studio unit has been established. These are estimates and a depreciation schedule, will be provided by the project's quantity surveyor at no additional cost. The vendor does not provide any warranties about the acceptance of these schedules by the Taxation Department. The attached depreciation schedules are based on the Australian Government's recent (TR2000/18) depreciation policies.
   
   
3. Estimated Cash Flow and Taxation Benefits (Years 1 to 5): Based on the 3 years 5.5% gross rental income, as well as estimated future income in years 4-5. A financial model of the estimated cash flow and taxation benefits for a typical one bedroom or one bedroom+ study furnished apartment within the Waldorf Management Scheme* has been provided in the preceding pages. The financial model is based on the following assumptions:
   
   a. The average price for a 1 bedroom or 1 bedroom+ study apartment is $287,000 to $325,000.
   
   b. The gross rental income has been based on the gross rental for the first 3 years and escalated by 3% p.a for years 4-5.

   c. The estimated capital growth of the property has been conservatively estimated at 3% per annum.
   
   d. Income tax for investors has been assumed at the highest marginal level of 48.5%.
   
   e. Building allowances are calculated at 4% per annum on construction costs.
   
   f. Loan establishment, legal and stamp duty costs have been estimated at 5.5% of the purchased price.
   
   g. Investors borrow 85% of the apartment purchase price plus acquisition costs, at a fixed annual rate of 6.25% for 5 years.

4. Table # 1 provides 5 years investor returns estimate for a 1 bedroom apartment.
   
   
5. Table # 2 provides 5 years investor returns estimate for a 1 bedroom + study apartment.
   

*Apartments under the Waldorf Management are to be let as furnished accommodation which will result in 4% building write off compared with the 2.5% diminishing value method which has been adopted.

Waldorf Apartments Perth