So is the total rent of the space with both tenants in place $46,200 (ie. 8.4% x $550,000)?
And the net rent a new landlord would then receive would be $46,200 - $20,000 body corporate fees - council rates - PM fees - land tax = less than $26,200?
So less than 4.76% net yield?
Possibly less than 3% net yield after all landlord outgoings are included?
And with a rent/sqm that maybe up to 19% above market (depending on how you value the extra car/storage space)?
btw Those body corporate fees seem ridiculous for a 7 owner block - what are you paying for here?!
Also, is the other tenant a pathology company?
The spare floor space and medical tenancy does work in your favour as a selling point though, unless both leave at the same time.
Your numbers are correct. Gross yield is 8.4% although I suspect that I would be happy to sell at a price with a gross yield of 9%.
The body corporate fees are very high for a very basic building because each owner also has a share of two blocks of land opposite the street from the building. The building is located on two blocks of land in itself. So each owner is essentially paying for fees for four blocks of land. The empty land is being used as a parking lot for the building.
The other tenant is indeed a pathology company who may well be increasing their rent they give me depending on how business grows. Their current offer of 18000 p.a. is just an opening gambit. So there is much potential to increase rental yield.