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Purchased

Multi-tenanted commercial deal

This is our clients’ first purchase with Rethink Investing. They were looking for an investment that ‘made their capital work hard’, with the additional criteria of good capital growth and a minimum 6.5% net yield. This investment ticked all the boxes as the yield was 6.8% and the growth on this asset was predicted to be very strong.

The due diligence on this asset came up all clean, so our clients were happy to proceed through to settlement. Property number two is now at the planning stage.

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Purchase Details
Asking Price
3550000
Purchase Price
3250000
Deposit (assuming
70
% debt)
975000
Stamp Duty
179858.2
Building Report*
700
Solicitor Cost*
7500
Valuation*
3000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
3550000
Total Cash Required
1166058.2
Purchase Price + Purchasing Cost
3441058.2
Net Annual Cash Flow Return
220924.31
Net Yield on Property
6.8
%
Net Yield Accounting for
Purchasing Costs
6.42
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
1166058.2
Cost of Loan
(Assume
5.75
% pa on
70
% debt)
156788.39
Return of Equity
(Pure cash flow return)
7.73
%
Return of Equity with a
5% Capital Growth Rate:
21.66
%
Return of Equity with a
7% Capital Growth Rate:
27.24
%
Return of Equity
10% Capital Growth Rate:
35.6
%
*approximate number

Key Highlights

• Building Area: 1,233m2

• Built circa 2007

• Net annual income: $220,924 pa + GST (this is after rental management and land tax)

• Multi-tenanted asset providing a reduced risk profile and an impressive WALE of 4.65 years

Get in touch

If you’re interested in joining the lucrative world of commercial property, contact us now.

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