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Purchased
Triple income asset with development opportunities
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.
Purchase Details
Asking Price
0
Purchase Price
1020000
Deposit (assuming
70
% debt)
306000
Stamp Duty
42600
Building Report*
800
Solicitor Cost*
4000
Valuation*
1500
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
0
Total Cash Required
354900
Purchase Price + Purchasing Cost
1068900
Net Annual Cash Flow Return
74870
Net Yield on Property
7.34
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
7
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
354900
Cost of Loan
(Assume
3
% pa on
70
% debt)
21420
Return of Equity
(Pure cash flow return)
15.06
%
Return of Equity with a
5% Capital Growth Rate:
29.43
%
Return of Equity with a
7% Capital Growth Rate:
35.18
%
Return of Equity
10% Capital Growth Rate:
43.8
%
*approximate number
Key Highlights
• Building Area: 1,000m2
• Land Area: 7,870m2
• $74,770 annual net rental + GST + Outgoings
• Long term tenants with three separate incomes
• Development & rent increase opportunities
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