One of the biggest reasons people invest in property is for future income, so they can retire early and don’t have to work their whole life to earn money. The ARI Cash flow software demonstrates how this can become a reality. See the future, today.
How to get ARI presentation ready
Now that you know what it is, where do you get the information? Gather information from multiple sources to ensure accurate and client-ready projections. The CMA reports for property value ranges and conservative rent estimates, while the Attio Buying Markets Page provides region-specific acquisition costs such as building and pest inspections, combining fees, and miscellaneous expenses. Stamp duty is pre-populated based on the property’s state, and contract documents are referenced to calculate land tax once the unimproved land value is available. Additionally, ARI’s pre-generated rates and calculators are leveraged for conservative financial assumptions, including holding costs and loan details. Together, these inputs create detailed projections and visual data on cash flow and property performance.
Here’s Caleb running through how to get ARI to presentation ready:
Here’s the steps to get ARI presentation ready
Step 1: Initial Setup
Open a new or existing ARI tool:
- Start with either a blank ARI or one with pre-filled details.
Property address input:
- Enter the property address to auto-populate the map, state, postcode, and property type (typically defaults to "residential").
Input property value:
- Use the highest value from your Comparative Market Analysis (CMA) range for a conservative estimate.
Step 2: Rental Inputs
Input rent amount:
- Use the lowest rent value from the analysis to maintain a conservative approach.
Gross yield calculation:
- Ensure rent and property value are entered accurately to generate the gross yield.
Editable fields:
- Highlight to clients that fields with a blue border are editable by them or you.
Step 3: Client-Specific Inputs
Income details:
- Leave income fields blank for clients to input their details themselves to avoid providing personal financial advice.
Cash flow visualization:
- Explain how inputting income affects after-tax cash flow projections.
Step 4: Loan Details
Default loan parameters:
- Use an 80% loan-to-value ratio (LVR) at 6.25% interest over 30 years as the default.
Adjustments:
- Modify loan details if the client specifies different loan structures, such as self-managed super funds (SMSF), where interest rates might be higher.
- Account for Loan Mortgage Insurance (LMI) for LVRs over 80% by adjusting acquisition costs or including a waiver if applicable.
Step 5: Acquisition Costs
Deposit calculation:
- Based on the loan-to-value ratio.
Additional costs:
- Use Attio data for region-specific costs such as:
- Building and pest inspections.
- Conveyancing fees.
- Miscellaneous costs (e.g., $5,000 contingency for minor fixes in Victoria due to negotiation limitations).
Stamp duty:
- Automatically calculated based on the property’s state.
Step 6: Annual Holding Costs
Default costs:
- Pre-populate estimates (e.g., 8% of rental income in Melbourne).
Region-specific adjustments:
- Use Attio to update costs for maintenance, council rates, water levies, and insurance specific to the property location.
Land tax:
- Use the Section 32 or estimate $1,600 for Victoria properties if the exact unimproved land value is unavailable.
Step 7: Loan and Interest Adjustments
Principal vs. Interest-only:
- Explain how switching between these impacts cash flow and repayment projections.
Amend interest rate:
- Adjust rates in conjunction with client-specific loan details, if necessary.
Step 8: Data Visualisation
Graphs overview:
- Showcase key graphs:
- Total performance (growth + cash flow).
- Cash flow projections before and after tax.
- Long-term growth projections over 30 years.
Explain visual insights:
- Highlight the "Total Performance" line for overall return visualization.
- Use these graphs to emphasize the long-term benefits of property investment.
Step 9: Encourage Client Engagement
Editable customization:
- Reassure clients that they can adjust fields in the ARI tool to reflect their specific situation.
Powerful decision-making tool:
- Reinforce the tool’s ability to provide clear, long-term financial insights tailored to their property investment goals.
How to present ARI to a client
You’ve got all the information, now how are we going to share it with the client? How you present financial information can make all the difference. Clear, simple, and professional insights help clients feel confident and engaged, turning complex numbers into actionable steps. A well-structured presentation builds trust, highlights a property’s potential, and strengthens your credibility, creating a solid foundation for a lasting client relationship.
Here’s Caleb to walk us through this below:
How to present ARI to a Client
Step 1: Initial Setup and Confirmation
Ensure visibility: Confirm the client has the presentation visible, either on their phone or computer.
Check device compatibility: Note differences in display on mobile vs. desktop and adjust accordingly.
Step 2: Provide Context
Long-term investment perspective:
- Highlight that property is a long-term investment, especially in the current economic environment.
- Explain that while current interest rates impact cash flows, relief is expected in 12-18 months due to potential rate cuts, improving cash flow.
Set expectations: Emphasize that this is a realistic and conservative view of the market.
Step 3: Walk Through Inputs
Property details:
- Present the property, its value, and reference the Comparative Market Analysis (CMA) used for accuracy.
- Highlight the conservative approach taken for the figures.
Income and loan details:
- Explain how to input their income, and how it reflects in the tool.
- Discuss loan-related inputs cautiously, avoiding personalized financial advice unless necessary.
Dynamic adjustments: Adjust inputs live during discussions if clients raise concerns, particularly regarding weekly cash flow.
Step 4: Acquisition Costs
State-specific breakdown:
- Explain state-specific acquisition costs (e.g., building and pest inspections, conveyancing fees).
Highlight miscellaneous costs:
- Stress the need for a $5,000 contingency for minor fixes, especially in states like WA and Victoria, where negotiations are limited.
- Explain additional state-specific requirements (e.g., gas and electrical safety certificates in Victoria every two years).
Preparation for future costs: Prepare clients for potential minor repairs or upgrades needed before leasing (e.g., replacing a dishwasher or fixing a tap).
Step 5: Holding Costs
Discuss ongoing costs:
- Outline typical holding costs (e.g., insurances, rates) and how they vary by state or area.
- Mention that these are standard business costs and should be factored into their planning.
Land tax considerations:
- If applicable, advise clients to consult their accountant for an accurate land tax assessment based on their broader property portfolio.
Step 6: Growth Projections
Conservative approach:
- Highlight conservative growth rates used in the projections.
- Emphasize the hope for better-than-expected performance but stress the importance of managing expectations.
Graphs and projections:
- Walk through the 30-year growth projection graph, showcasing the potential long-term benefits of holding property.
Step 7: Encourage Customisation
Client adjustments:
- Make it clear that clients can edit inputs in the tool to reflect their specific situation.
- Encourage them to explore customization options for better insights.