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Purchased

Affordable fast food asset

  • Long-standing fast food business established in 2004
  • Current net rent: $93,000pa net + GST
  • Recession-proof asset

Purchase Details

Asking Price

$1,550,000

Purchase Price

$1,475,000

Deposit (assuming 70% debt) - 30%

$442,500

Stamp Duty

$70,840

Building Report*

$800

Solicitor Costs

$7,500

Valuation

$3,000

Total Cash Required

$524,640

Purchase Price + Purchasing Costs

$1,557,140

Net Annual Cash Flow Return

$93,000

Net Yield on Property

6.31%

Net Yield Accounting for Purchase Costs

5.97%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$524,640

Cost of loan (assume 5.25% pa on 70% debt):

$54,206.25

Return on Equity (pure cash flow return):

7.39%

Return on Equity with a 5% Capital Growth Rate:

21.45%

Return on Equity with a 7% Capital Growth Rate:

27.07%

Return on Equity with a 10% Capital Growth Rate:

35.51%

*approximate numbers

Building Type: Retail
Building Area: 523m2

NLA: 523m2
WALE: 6

How we helped this client

Rethink Investing’s acquisitions team recently secured this commercial property before it was listed online. The property is an exceptionally rare and affordable fast-food asset in NSW. The investment clears over $38,000 in passive income for the new owner. This is after 100% of the outgoings and 70% of the mortgage costs at the current interest rates! Note: There is a 10-year lease with 4×3 options taking the final expiry to 2041. 

This is our client’s first property with Rethink Investing. They were looking for a secure, low-risk investment to help them build a reliable passive income. This deal was perfect for them as it was well under their budget and ticked all the boxes in terms of a long lease, strong rental income growth potential and an established business.

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