Calculating rental returns:

Nerida recently purchased a rental property for $350,000. She expects that she should be able to charge a rent based on a gross return of 6% p.a.

(a) What is the amount of gross rent that she would charge?

(b) If Nerida is told that ongoing costs of owning the property (without considering the interest cost on a loan) amount to $3,500 p.a., calculate her net income return after costs.

(c) Assuming Nerida has not burrowed any funds to acquire the property and her marginal tax rate is 30% (ignore Medicare levy), calculate her after-tax return on the rental income.

(d) If, instead, Nerida burrowed $200,000 on interest-only terms to acquire the property and has to pay interest of 6.5% p.a., what is the taxation implication for Nerida?