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Purchased

Entry level asset with no stamp duty!

  • 6.2% net income + Growth
  • 4+3 year lease
  • 3% annual increases in the rent + 3 month bank guarantee

Purchase Details

Asking Price

$590,000

Purchase Price

$537,500

Deposit (assuming 70% debt) - 30%

$161,250

Stamp Duty

$0

Building Report*

$700

Solicitor Costs

$4,000

Valuation

$2,000

Total Cash Required

$167,950

Purchase Price + Purchasing Costs

$544,200

Net Annual Cash Flow Return

$33,500

Net Yield on Property

6.23%

Net Yield Accounting for Purchase Costs

6.16%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$167,950

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

$11,287.50

Return on Equity (pure cash flow return):

13.23%

Return on Equity with a 5% Capital Growth Rate:

29.23%

Return on Equity with a 7% Capital Growth Rate:

35.63%

Return on Equity with a 10% Capital Growth Rate:

45.23%

*approximate numbers

Building Type: Industrial Asset
Building Area: 200m2

Land Area: 200m2
WALE: 4

How we helped this client

This was our valued client’s first purchase with Rethink Investing. They were looking to invest in either South Australia or the ACT to avoid stamp duty for their SMSF purchase. This entry-level 233m2 industrial property in Adelaide was perfect. We saved our client a lot of money by securing it off-market, and since it’s located in South Australia, there was no stamp duty. Extra upsides for this asset include a four year lease and being located less than 10km from the CBD.

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