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Purchased
Quality industrial property
For our client’s first commercial property, they were looking to purchase a quality industrial property with a long lease. This asset was perfect for them as it came with a high amount of depreciation benefits, meaning that the client would save paying some tax. This asset clears over $2,500 per week in passive income after factoring in mortgage and outgoing costs!
Purchase Details
Asking Price
6000000
Purchase Price
5000000
Deposit (assuming
65
% debt)
1750000
Stamp Duty
287346.7
Building Report*
1500
Solicitor Cost*
9000
Valuation*
6000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
6000000
Total Cash Required
2053846.7
Purchase Price + Purchasing Cost
5303846.7
Net Annual Cash Flow Return
300000
Net Yield on Property
6
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
5.66
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
2053846.7
Cost of Loan
(Assume
5.25
% pa on
65
% debt)
170625
Return of Equity
(Pure cash flow return)
6.3
%
Return of Equity with a
5% Capital Growth Rate:
18.47
%
Return of Equity with a
7% Capital Growth Rate:
23.34
%
Return of Equity
10% Capital Growth Rate:
30.64
%
*approximate number
Key Highlights
• Building Area: 2,550m2
• NLA: 6,949m2
• Lease = 5 + 5 years
• Total net income = $300,000
• Triple net lease with tenant paying land tax rental management and 100% of outgoings
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