investment_simulator/demo.ipynb

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   "source": [
    "from dataclasses import dataclass\n",
    "\n",
    "@dataclass\n",
    "class PropertyFinanceParams:\n",
    "    \"\"\"Tunable parameters that describe the finances of a property.\"\"\"\n",
    "    purchase_price: float\n",
    "    deposit_amount: float\n",
    "    loan_duration_years: int\n",
    "    lmi_amount: float\n",
    "    annual_rental_income: float\n",
    "    annual_rental_growth_rate: float\n",
    "    annual_interest_rate: float\n",
    "    annual_growth_rate: float"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 3,
   "metadata": {},
   "outputs": [],
   "source": [
    "def calculate_stamp_duty(purchase_price: float, first_home: bool) -> float:\n",
    "    if first_home:\n",
    "        if purchase_price < 600000:\n",
    "            return 0\n",
    "        elif purchase_price < 605000:\n",
    "            return 1045\n",
    "        elif purchase_price < 625000:\n",
    "            return 5428\n",
    "        elif purchase_price < 650000:\n",
    "            return 11356\n",
    "        elif purchase_price < 675000:\n",
    "            return 17785\n",
    "        elif purchase_price < 700000:\n",
    "            return 24713\n",
    "        elif purchase_price < 725000:\n",
    "            return 32141\n",
    "        elif purchase_price < 745000:\n",
    "            return 38444\n",
    "        else:\n",
    "            return\n",
    "    else:\n",
    "        if purchase_price < 25000:\n",
    "            return purchase_price * 0.014\n",
    "        elif purchase_price < 130000:\n",
    "            return 350 + (purchase_price - 25000) * 0.024\n",
    "        elif purchase_price < 960000:\n",
    "            return 2870 + (purchase_price - 130000) * 0.06\n",
    "        elif purchase_price < 2000000:\n",
    "            return purchase_price * 0.055\n",
    "        else:\n",
    "            return 110000 + (purchase_price - 2000000) * 0.065\n",
    "        \n",
    "def calculate_annual_repayments(principal: float, annual_interest_rate: float, loan_duration_years: int):\n",
    "    return (principal * annual_interest_rate * (1 + annual_interest_rate) ** loan_duration_years) / ((1 + annual_interest_rate) ** loan_duration_years - 1)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 4,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "Upfront Costs: 321500.00 = 250000.00 deposit + 0.00 LMI + 71500.00 stamp duty\n",
      "Annual Mortgage Payment: 81241.59\n",
      "\n",
      "Total Paid: 2437247.81\n",
      "Property Value: 9895931.56\n",
      "Total Interest Paid: 1387247.81\n",
      "Total Rental Income: 116762.31\n",
      "\n",
      "Total Paid (10yr): 812415.94\n",
      "Property Value (10yr): 2557296.76\n",
      "Total Interest Paid (10yr): 650510.03\n",
      "Total Principal Paid (10yr): 161905.91\n",
      "Total Rental Income (10yr): 432219.86\n",
      "Net Cash Position (10yr): -380196.08\n",
      "Loan Balance (10yr): 888094.09\n",
      "Total Equity (10yr): 1669202.67\n"
     ]
    }
   ],
   "source": [
    "def run_simulation(property_finance_params: PropertyFinanceParams):\n",
    "    initial_loan_amount = property_finance_params.purchase_price - property_finance_params.deposit_amount\n",
    "    yearly_loan_balance = [initial_loan_amount]\n",
    "\n",
    "    stamp_duty = calculate_stamp_duty(property_finance_params.purchase_price, first_home=False)\n",
    "    upfront_costs = stamp_duty + property_finance_params.deposit_amount + property_finance_params.lmi_amount\n",
    "\n",
    "    print(f\"Upfront Costs: {upfront_costs:.2f} = {property_finance_params.deposit_amount:.2f} deposit + {property_finance_params.lmi_amount:.2f} LMI + {stamp_duty:.2f} stamp duty\")\n",
    "\n",
    "    annual_mortgage_payment = calculate_annual_repayments(initial_loan_amount, property_finance_params.annual_interest_rate, \n",
    "                                                          property_finance_params.loan_duration_years)\n",
    "    \n",
    "    print(f\"Annual Mortgage Payment: {annual_mortgage_payment:.2f}\")\n",
    "\n",
    "    yearly_interest_paid = []\n",
    "    yearly_principal_paid = []\n",
    "    yearly_property_value = [property_finance_params.purchase_price]\n",
    "    yearly_rental_income = [property_finance_params.annual_rental_income]\n",
    "\n",
    "    for year in range(property_finance_params.loan_duration_years):\n",
    "        interest_paid = yearly_loan_balance[-1] * property_finance_params.annual_interest_rate\n",
    "        yearly_interest_paid.append(interest_paid)\n",
    "        yearly_principal_paid.append(annual_mortgage_payment - interest_paid)\n",
    "\n",
    "        yearly_loan_balance.append(yearly_loan_balance[-1] - yearly_principal_paid[-1])\n",
    "\n",
    "        yearly_property_value.append(yearly_property_value[-1] * (1 + property_finance_params.annual_growth_rate))\n",
    "\n",
    "        yearly_rental_income.append(yearly_rental_income[-1] * (1 + property_finance_params.annual_rental_growth_rate))\n",
    "\n",
    "        if yearly_loan_balance[-1] <= 0:\n",
    "            break  # Loan fully paid off\n",
    "\n",
    "    print()\n",
    "\n",
    "    print(f\"Total Paid: {annual_mortgage_payment * property_finance_params.loan_duration_years:.2f}\")\n",
    "    print(f\"Property Value: {yearly_property_value[-1]:.2f}\")\n",
    "    print(f\"Total Interest Paid: {sum(yearly_interest_paid):.2f}\")\n",
    "    print(f\"Total Rental Income: {yearly_rental_income[-1]:.2f}\")\n",
    "\n",
    "    print()\n",
    "\n",
    "    print(f\"Total Paid (10yr): {annual_mortgage_payment * 10:.2f}\")\n",
    "    print(f\"Property Value (10yr): {yearly_property_value[10]:.2f}\")\n",
    "    print(f\"Total Interest Paid (10yr): {sum(yearly_interest_paid[:10]):.2f}\")\n",
    "    print(f\"Total Principal Paid (10yr): {sum(yearly_principal_paid[:10]):.2f}\")\n",
    "    print(f\"Total Rental Income (10yr): {sum(yearly_rental_income[:10]):.2f}\")\n",
    "    print(f\"Net Cash Position (10yr): {sum(yearly_rental_income[:10]) - (annual_mortgage_payment * 10):.2f}\")\n",
    "    print(f\"Loan Balance (10yr): {yearly_loan_balance[10]:.2f}\")\n",
    "    print(f\"Total Equity (10yr): {yearly_property_value[10] - yearly_loan_balance[10]:.2f}\")\n",
    "\n",
    "\n",
    "run_simulation(\n",
    "    PropertyFinanceParams(\n",
    "        1300000,\n",
    "        250000,\n",
    "        30,\n",
    "        0,\n",
    "        36000,\n",
    "        0.04,\n",
    "        0.066,\n",
    "        0.07)\n",
    ")"
   ]
  }
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