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Entry-Level Commercial Property Deal with 7.86% Net Yield

At Rethink Investing, we’re proud to celebrate the success of our clients’ first commercial property purchase, showcasing the value of our expertise and market insights.

This modern freehold retail/showroom property, located in the thriving suburb of Loganholme between Brisbane and the Gold Coast, demonstrates the potential of strategic entry-level investments. While the property was purchased without a tenant in place—an approach outside our standard process—we were confident in our ability to secure strong leasing outcomes thanks to our deep knowledge of the commercial leasing market.

In a testament to our team's skill and proactive approach, a tenant was successfully secured within weeks, delivering an impressive net yield of 7.86%. This result exceeds expectations and underscores the potential of this property to generate consistent returns for our client.

Further highlighting the success of this transaction is the capitalisation rate of the local market, which stands at approximately 6.5%. This property was acquired 23% below market value, creating an immediate uplift in value and setting the stage for long-term capital growth.

This achievement reinforces Rethink Investing’s commitment to identifying high-performing properties and delivering exceptional outcomes for our clients, whether they are experienced investors or just beginning their commercial property journey.

Purchase Details
Asking Price
800000
Purchase Price
700000
Deposit (assuming
70
% debt)
210000
Stamp Duty
26982.1
Building Report*
6000
Solicitor Cost*
5000
Valuation*
2500
Other Fees* (Depreciation
report, bank fees)
Total Cash Required
250482.1
Purchase Price + Purchasing Cost
740482.1
Net Annual Cash Flow Return
55000
Net Yield on Property
7.86
%
Net Yield Accounting for
Purchasing Costs
7.43
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
250482.1
Cost of Loan
(Assume
5.75
% pa on
70
% debt)
28175
Return of Equity
(Pure cash flow return)
10.71
%
Return of Equity with a
5% Capital Growth Rate:
24.68
%
Return of Equity with a
7% Capital Growth Rate:
30.27
%
Return of Equity
10% Capital Growth Rate:
38.66
%
*approximate number

Key Highlights

• Building Area: 143m2

• Land Area: 304m2

• Annual income of $55,000pa net + GST

• Ideal Loganholme location, situated between Brisbane and the Gold Coast

• Modern freehold retail/showroom property

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

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