Yeah nowhere near that stage. Just bought another resi property which will keep me busy (reno) Was more curiosity what sort of net yield would get. Had a resi client of mine just put offer down on his first comm property $1.61M purchase price w/ 2 leases in place totalling $128k p.a over 15 years.
a 8pc net yield will return almost 50pc of the net rental as profit ..which is pretty good. The future will rely upon 1: growth in rental 2: minimal vacancies
20 Heaths Court, MILL PARK VIC 3082 - Industrial & Warehouse Property For Sale - 2014928338 Working at appropriate cap rate will be a bit more of an exercise.
Sold not my client 1750 Main North Road, SALISBURY PLAIN SA 5109 - Sold Industrial & Warehouse Property - 2014736465 $1,555,000 w/ $128,000 p.a net
@ashish1137 - Primary methodology woud be a dcf to calculate the IRR. Then tweak the IRR in a sensitivity analysis. The IRR is the cap rate from first principals. Secondary methodology would be a comparative analysis (determine land value, value of improvements etc and compare to similar sites). I would also review the highest & best use, town planning etc (proper due diligence).
Thanks @Scott No Mates I hatingly have to admit, I didnt get a word of it. But your email served as a good starting point to read about all this. So I read about dcf and irr. Would you be able to guide me further on methodologies that you use for dcf to calculate irr. Honestly, being a residential investor, I am more comfortable with second methodology; but i am sure it won't work in this case. Thanks for your time. Regards
