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Purchased

Rare sub $1m freehold investment

  • $50,000 income per annum
  • 3+3 year lease
  • Freehold investment

Purchase Details

Asking Price

$850,000

Purchase Price

$780,000

Deposit (assuming 70% debt) - 30%

$234,000

Stamp Duty

$30,735

Building Report*

$700

Solicitor Costs

$4,000

Valuation

$2,000

Total Cash Required

$271,435

Purchase Price + Purchasing Costs

$817,435

Net Annual Cash Flow Return

$50,000

Net Yield on Property

6.41%

Net Yield Accounting for Purchase Costs

6.12%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$271,435

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

$16,380

Return on Equity (pure cash flow return):

12.39%

Return on Equity with a 5% Capital Growth Rate:

26.75%

Return on Equity with a 7% Capital Growth Rate:

32.50%

Return on Equity with a 10% Capital Growth Rate:

41.12%

*approximate numbers

Building Type: Industrial Asset
Building Area: 762m2

Land Area: 282m2
WALE: 3

How we helped this client

Our client was looking to purchase a commercial industrial asset with some land. In the sub $1m range this is very tough to find but after many months of looking we secured this investment that met the goals of the client. They are now in the process of purchasing another even larger asset with Rethink Investing.

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