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Financial Analysis

The document analyzes a potential property investment of buying an apartment for RM 500,000 with a 20% down payment and 10-year bank loan at 4.8% interest. It estimates 5% annual property price growth and RM 18,000 annual rental income with RM 3,000 maintenance costs. A financial analysis is conducted to determine if the investment will meet the uncle's required 8% return, showing costs and cash flows over 10 years with net present value discounted at 8%.

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Ljc Jin Chai
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33 views2 pages

Financial Analysis

The document analyzes a potential property investment of buying an apartment for RM 500,000 with a 20% down payment and 10-year bank loan at 4.8% interest. It estimates 5% annual property price growth and RM 18,000 annual rental income with RM 3,000 maintenance costs. A financial analysis is conducted to determine if the investment will meet the uncle's required 8% return, showing costs and cash flows over 10 years with net present value discounted at 8%.

Uploaded by

Ljc Jin Chai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Property Investment Decision

Buying apartment= RM 500,000, immediately put into rennovation cost RM 10,000.


20% downpayment
80% bank loan, interest rate 4.8% for 10 years
Intended investment period is 10 years, estimate property price growing 5% p.a. (Estimation from professor)
The current market rental is RM 18,000 p.a. and maintenance cost is RM 3,000 per annum.
Since my uncle want to earn 8% from the investment, I prepare the financial analysis to determine the return of in
Period

Payment
Rental Received Disposal
Maintenance Net cash flow
0
-110,000
-110,000
1
-51,300
18,000
-3,000
-36,300
2
-51,300
18,000
-3,000
-36,300
3
-51,300
18,000
-3,000
-36,300
4
-51,300
18,000
-3,000
-36,300
5
-51,300
18,000
-3,000
-36,300
6
-51,300
18,000
-3,000
-36,300
7
-51,300
18,000
-3,000
-36,300
8
-51,300
18,000
-3,000
-36,300
9
-51,300
18,000
-3,000
-36,300
10
-51,300
18,000
814,447
-3,000
778,147

mation from professor)

to determine the return of investment.


Discounting Factors 8%

Discounting Cash Flow


1
-110,000
0.926
-33,611
0.857
-31,121
0.794
-28,816
0.735
-26,682
0.681
-24,705
0.630
-22,875
0.583
-21,181
0.540
-19,612
0.500
-18,159
0.463
360,433
23,671

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