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46pc of the net rent is pure profit

Discussion in 'Commercial Property' started by Beano, 26th Aug, 2016.

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  1. Beano

    Beano Well-Known Member

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    47 castlemaine st milton brisbane
    Sold on a net yield of 7.9pc
    If funded at 4.2pc 46pc of the rent is profit
    I am posting this as i have so many people say you can't achieve cash flow with property
    Sure the tax bill is high when the cash pours in but you may get knighted by the government for the tax you pay
     
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  2. ellejay

    ellejay Well-Known Member

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    Cash flow is like a dirty word on here (for a lot anyway). People think you're weird if you're not going on about growth all the time.
     
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  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    At 1.85m purchase price based on 147k rent per annum per the ad, great deal so long as you have the 700k cash to buy it in the first place :)
     
  4. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Sounds very doable for nearly anybody in Sydney
     
  5. Beano

    Beano Well-Known Member

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    Its all about the yields
    In the last three years my purchases have been as low as $25k and as high as $16m but the important thing is the net yield
     
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  6. Beano

    Beano Well-Known Member

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    You hit the nail on the head ...good cashflow first growth will follow
    Nothing wrong with cashflow
     
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  7. chindonly

    chindonly Well-Known Member

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    Can you get 4.2% on this size commercial?
    What about land tax? Do you include these in outgoings now?
     
  8. Barny

    Barny Well-Known Member

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    Probably the first thread I've read that isn't just about growth. Good to see. @Beano , if possible would you share some more deals that you have done in the past on commercial and residential showing returns.
     
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  9. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

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    4.2% is very doable on >$1m commercial. Outgoings will be paid by the tenant (which is good as long as you have a tenant!). Generally land tax is paid by the owner (at least in VIC), but that could already be factored into the net yield.
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    @DaveM - $700k - that's over 35% in the deal. Numbers will look very rosy.
     
  11. Bran

    Bran Well-Known Member

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    Did you buy a $16m property based on cashflow, growth, or both? Can you elaborate on a broad timeline?
     
  12. hash_investor

    hash_investor Well-Known Member

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    how was that net yield calculated?

    the sydney boom created many .... type investors :)
     
  13. Cactus

    Cactus Well-Known Member

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    Already under offer... Been busy @Beano

    Can you find these sort of numbers at $1m (ie $300k equity)?
     
  14. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Where you could buy just about anything anywhere and make money on it, then act as though you have some secret method for success? :)
     
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  15. MTR

    MTR Well-Known Member Premium Member

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    I want both:). cashflow is not a dirty word, but Not everything is equal, and there is more than one way to skin a cat.
     
    Last edited: 26th Aug, 2016
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  16. MTR

    MTR Well-Known Member Premium Member

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    ...but many investors did not jump into booming markets Syd/Melb and Perth.....during 2013........and yes, you don't need to be a genius, but you do need to jump in to make money.
     
  17. Scott No Mates

    Scott No Mates Well-Known Member

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    I'd not be overly upset with poor cg if I was getting 7%+ nett with 4% fixed increases (provided that the market was reflecting those increases too - nothing worse than a dose of reality when market is way below the rent the outgoing tenant has been paying for years).
     
  18. MTR

    MTR Well-Known Member Premium Member

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    but do resi owners get 7%+ returns today? where/what?
     
  19. Scott No Mates

    Scott No Mates Well-Known Member

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    No
     
  20. MTR

    MTR Well-Known Member Premium Member

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    right, I thought you were talking resi my mistake