RENTAL PROPERTY ACCOUNTING PHILIPPINES - Quadrant Technique, Rental Income, Rental Expenses, Cash Fl

a. Cash Flow Projection using a) Income b) Expenses c) Cash Flow d) Cash on Cash ROI
b. Scenario ay rental property at a loan and mortgage
Rental Property Cost P2,000,000

1. INCOME P20,000
A. Rental Income P20,000
*Laundry xxx
*Storage xxx
*Misc. xxx



2. OPERATING EXPENSES P16,362
a. Tax 700
b. Real Property Tax 200
c. Property Insurance 200
d. Electricity, Water & Gas 0
e. Communication & Internet 0
f. Homeowners/Condo Association dues 300XXX
g. Vacancy 5% 1,000
h. Repairs & MaintenanceXXX 500
i. Capital Expenditures explain capex
j. Property Management 10% 2,000
k. Mortgage XXXX 11,462

Association Dues.
It is then computed based on the size (total area in square meters) of your unit. This includes the balcony space, if you have one. For example, in One Serendra, the association dues cost Php 96 per sqm excluding VAT. Thus, if you own a 70 square meter unit, you have to pay Php 6,720 per month plus tax

Repairs & Maintenance:
1. Water heater & Cooling System
2. Leaks and Water Damage
3. Clean Gutters
4. Tree Cutting
5. Tiles Repair
6. Doors & Gate repairs
7. Kisame leak repairs
8. Repainting
9. Others.





Mortgage: Selling Price of House & Lot P2,000,000
20% Down Payment -400,000
Balance Loan 1,600,000
Term:
a. Mortgage Amount P1,600,00
b. 5% Interest per Annum
c. Term 30 Years
Monthly Payment + Interest P8,589

3. CASH FLOW P3,638

Rental Income P20,000
Operating Expenses 16,362
Monthly Cash Flow 3,638


4. Return on Investment (ROI) 7.22%

Down Payment 400,000
Transfer Taxes 150,000
Renovation/Repair 50,000
Loan Expenses 5,000
Total Investment 605,000

Annual Cash Flow (P3,638x12) P43,656
Divided-by Total Investment 605,000

Cash on Cash ROI 7.22%

Comparison:
1. Time Deposit Interest 4%
2. Stocks 10% or loss