4M Comm property
- Thread starter negt
- Start date
I'd want 400,000 (net) pa in rent. Good luck getting an 80 % lend on this @ 6.25 % yield unless you have oodles of serviceability from elsewhere and other security to give the lender.
That sort of yield would be likely retail in a decent location and there would have to be value add potential via the space above or on any excess land to even consider it IMO. Otherwise it may be on a very low (lease locked) rental that a market review at lease end or option exercise could bring it up to a more palatable yield.
I don't play at that level with commercial by the way, so the above is merely my 0.02.............
national fast food|5+5+5|20% deposit
Higher than resi.
How will you be servicing?
The rent wont even cover P&I payments on the loan, plus the opportunity cost of the deposit at IO.
This will be somewhat $135k negatively geared in the first year.
20% deposit? - try 30-35% minimum.
Don't forget SD will also be $200k+, and costs to purchase as well.
pinkboy
You've put the cart before the horse.
If the property is already secured with a 5 year lease (you didn't mention how many years are down and how many to go....which is important) you will be able to determine exactly what the rent is.
From that definitive data, the only question remains is - what is the property worth ??
Do you see how asking what a place could rent for ideally based on a price paid is all *** about face.
and over a 15 year term max.
