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Purchased
Solid industrial asset with long term business
Our valued client was purchasing their first ever commercial property. They needed a long lease and a high yield. This investment was perfect for their needs as it represented a secure high income. The stamp duty savings was also a bonus which allowed them to stretch the purchasing budget a little higher than they initially planned.
Purchase Details
Asking Price
1100000
Purchase Price
980000
Deposit (assuming
70
% debt)
294000
Stamp Duty
0
Building Report*
700
Solicitor Cost*
4000
Valuation*
2000
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
Total Cash Required
300700
Purchase Price + Purchasing Cost
986700
Net Annual Cash Flow Return
70585
Net Yield on Property
7.2
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
7.15
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
300700
Cost of Loan
(Assume
3
% pa on
70
% debt)
20580
Return of Equity
(Pure cash flow return)
16.63
%
Return of Equity with a
5% Capital Growth Rate:
32.92
%
Return of Equity with a
7% Capital Growth Rate:
39.44
%
Return of Equity
10% Capital Growth Rate:
49.22
%
*approximate number
Key Highlights
• Building Area: 458m2
• Land Area: 458m2
• 5 year lease
• No stamp duty as this is in the ACT
• High growth area
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