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Purchased

Triple income asset with development opportunities

  • $74,770 annual net rental + GST + Outgoings
  • Long term tenants with three separate incomes
  • Development & rent increase opportunities

Purchase Details

Asking Price

Purchase Price

$1,020,000

Deposit (assuming 70% debt) - 30%

$306,000

Stamp Duty

$42,600

Building Report*

$800

Solicitor Costs

$4,000

Valuation

$1,500

Total Cash Required

$354,900

Purchase Price + Purchasing Costs

$1,068,900

Net Annual Cash Flow Return

$74,870

Net Yield on Property

7.34%

Net Yield Accounting for Purchase Costs

7%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$354,900

Cost of loan (assume 3% pa on 70% debt):

$21,420

Return on Equity (pure cash flow return):

15.06%

Return on Equity with a 5% Capital Growth Rate:

29.43%

Return on Equity with a 7% Capital Growth Rate:

35.18%

Return on Equity with a 10% Capital Growth Rate:

43.80%

*approximate numbers

Building Type: Retail Development
Building Area: 1,000m2

Land Area: 7,870m2
WALE: 3

How we helped this client

Our valued client was looking for two main things: a high yield and a value-add opportunity; this gem of an asset had both. A significant value-add opportunity was evident, which would involve improving one of the tenant’s buildings to facilitate more customers to enter the site, and once this is completed, it will allow the client to charge more rent. Being located in a growth corridor in Queensland will help the value appreciate faster than trend growth for the area.

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