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Purchased

Quality entry level asset!

  • CPI rental increases on each anniversary
  • 3+3 year lease
  • Annual income of $60,420 pa + outs + GST

Purchase Details

Asking Price

$1,000,000

Purchase Price

$940,000

Deposit (assuming 70% debt) - 30%

$282,000

Stamp Duty

$37,819

Building Report*

$600

Solicitor Costs

$5,000

Valuation

$2,000

Total Cash Required

$327,419

Purchase Price + Purchasing Costs

$985,419

Net Annual Cash Flow Return

$60,420

Net Yield on Property

6.43%

Net Yield Accounting for Purchase Costs

6.13%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$327,419

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

$24,440

Return on Equity (pure cash flow return):

10.99%

Return on Equity with a 5% Capital Growth Rate:

25.34%

Return on Equity with a 7% Capital Growth Rate:

31.09%

Return on Equity with a 10% Capital Growth Rate:

39.70%

*approximate numbers

Building Type: Retail
Building Area: 381m2

NLA: /
WALE: 2

How we helped this client

This deal went on for five months, which was a frustratingly long process. However, it was worth the wait in the end because we got a great result for the buyer. Initially the sellers presented the numbers and terms of the lease incorrectly. During the due-diligence we had to renegotiate these unfavourable items which turned a 5.91% asset to a 6.43% net yield.

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