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From: Paul Guest
Inspired by the strength of the market, my wife and I have decided to sell and attempt larger developments than this particular one.
What I cannot do is budge my wife from this new property in Mitcham (best street in suburb!) so we wish to sell on a 3 year lease-back (i.e. We'll rent it back for 3 years). No agents fees (direct debit our account each month), no vacancies, no re-letting fees, no advertising, no maintenance for first 3 years (we figured that we would have to cover that if we were living here anyway). Plenty of depreciation ($42K, maybe more) and building w/off ($115K). We'll offer a 5% rent increase in the 3rd year.
Price is $360K (larger house next door valued at $500K, auction in the street 3 months ago at $468K (market has risen since).
House is 15sq on 370m2 block. 3 beds, ensuite, + dble gge, picket fence, fireplace etc.etc. Only 2 on the block, both have a 50ft frontage to elm-lined street.
Yields in our area on new stock are around 4.5%. Our return is 4.75% but without vacancy, fees, maintenance etc. for 3 years, our offer grosses up to about 5.5% when those assumptions are factored in.
Sorry for the 'spam' guys but try explaining yield, depreciation and the like to an estate agent.. they just dont get it!
Please email pgaust@hotmail.com
Thanks
Paul.
PS. I am happy to provide any property development advice to newcomers (risk/reward, ROI, funding, target markets etc.)
Inspired by the strength of the market, my wife and I have decided to sell and attempt larger developments than this particular one.
What I cannot do is budge my wife from this new property in Mitcham (best street in suburb!) so we wish to sell on a 3 year lease-back (i.e. We'll rent it back for 3 years). No agents fees (direct debit our account each month), no vacancies, no re-letting fees, no advertising, no maintenance for first 3 years (we figured that we would have to cover that if we were living here anyway). Plenty of depreciation ($42K, maybe more) and building w/off ($115K). We'll offer a 5% rent increase in the 3rd year.
Price is $360K (larger house next door valued at $500K, auction in the street 3 months ago at $468K (market has risen since).
House is 15sq on 370m2 block. 3 beds, ensuite, + dble gge, picket fence, fireplace etc.etc. Only 2 on the block, both have a 50ft frontage to elm-lined street.
Yields in our area on new stock are around 4.5%. Our return is 4.75% but without vacancy, fees, maintenance etc. for 3 years, our offer grosses up to about 5.5% when those assumptions are factored in.
Sorry for the 'spam' guys but try explaining yield, depreciation and the like to an estate agent.. they just dont get it!
Please email pgaust@hotmail.com
Thanks
Paul.
PS. I am happy to provide any property development advice to newcomers (risk/reward, ROI, funding, target markets etc.)
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