Property Investment Analisys

[Maverick]

Hello,

I'm trying to crunch the numbers about the following investment opportunity:

- 5 Bedroom apartment rented to University on a secured lease for 5 years with option for extension
- 2 car parks on a title
- rental income $1,700 per month or $20,400 per annum
- no agent fees, no body corporate, no insurance, no council rates, no bills - all paid by University
- asking prize is $375,000

I'm wondering if it would make a good investment if I think to borrow to 80% LVR and pay remaining 20% + purchasing costs.

Since there are no expenses with IP (except maybe to depreciation - paper loss), and assuming 6.5% interest loan on $300,000 (80% LVR) = $19,500, would it be beneficial to buy such IP in Hybrid Trust structure with 80% borrowed in personal name of higher income earner to buy units? A negative gearing for higher income earner is not going to be utilised...

Based on the details in the above paragraph, does it make sense to buy the investment property differently (i.e. without utilising negative gearing feature of Hybrid Trust)?

Your comments and suggestions will be very much appreciated.

[Rolf Latham]

Hiya

My main comments here are

1. Id say in most cases locking in the capacity to have a neg gearing benefit would almost always be worthwhile if for nothing else but just to ensure changing rates, returns and personal circumstances dont bite you.

2. Uni long term lease accomodation nay not be easy to get an 80 % loan

ta
rolf