- Visit Us: 59 Fletcher Street Essendon Vic 3040
$965k purchase price. Rental expected at $300 per week for 9 bedrooms, 14.55% gross yield or a whopping $140k in gross income.
Net income from the property prior to mortgage is $97k. That’s a NET YIELD of 10.05%. This beats commercial properties by MILEESSS as they usually sit at 6% net yield.
The area is right in front of a university, train station and a hospital
The land is 700sqm in an RGZ zone that can be converted into a 4 or 5 townhouse site in the future.
Net income after mortgage even after assuming a 6% interest rate is $39k. There is $40k worth of tax depreciation on the property which means the yield after mortgage is circa 4% every year.
These are valued on commercial basis on a residential lend, the valuation pre build was $1 million on the property. So an instant uplift of $35k
Cash required to build these were at an LVR of 80% which means only $193k + stamps was put up. Keeping the cash on cash return every year at 18% per annum
The valuation at completion on these properties are at $1.35 million at a cap rate of 0.675, which means at 80% lvr you get $308k out of the property. $200k of your money plus $100k of equity growth. You can reinvest the $200k back to build a new one every year and an extra one every 2 years
These properties are serviced themselves due to the higher rentals attached to it. You build one of these and next one is serviced by the first one when structured properly
The best is for the last!! NO Land tax attracted on it. So you can park all of them under a single trust and reap significant benefits
Lastly, the payback period on these is under 10 years. So if you let them pay these with their own money you would have them free hold under 10 years
Typically two of these could get you to retire.
Now lets try to understand why do we think this is a growth corridor, lets see some high level data
$965k purchase price. Rental expected at $300 per week for 9 bedrooms, 14.55% gross yield or a whopping $140k in gross income.
Net income from the property prior to mortgage is $97k. That’s a NET YIELD of 10.05%. This beats commercial properties by MILEESSS as they usually sit at 6% net yield.
The area is right in front of a university, train station and a hospital
The land is 700sqm in an RGZ zone that can be converted into a 4 or 5 townhouse site in the future.
Net income after mortgage even after assuming a 6% interest rate is $39k. There is $40k worth of tax depreciation on the property which means the yield after mortgage is circa 4% every year.
These are valued on commercial basis on a residential lend, the valuation pre build was $1 million on the property. So an instant uplift of $35k
Cash required to build these were at an LVR of 80% which means only $193k + stamps was put up. Keeping the cash on cash return every year at 18% per annum
The valuation at completion on these properties are at $1.35 million at a cap rate of 0.675, which means at 80% lvr you get $308k out of the property. $200k of your money plus $100k of equity growth. You can reinvest the $200k back to build a new one every year and an extra one every 2 years
These properties are serviced themselves due to the higher rentals attached to it. You build one of these and next one is serviced by the first one when structured properly
The best is for the last!! NO Land tax attracted on it. So you can park all of them under a single trust and reap significant benefits
Lastly, the payback period on these is under 10 years. So if you let them pay these with their own money you would have them free hold under 10 years
Typically two of these could get you to retire.
Now lets try to understand why do we think this is a growth corridor, lets see some high level data
