From: Khurram Saeed
Hi All
This post is especially for people who are in the market to RENT close to the city.
I have an investment property in Ascot Vale, Melbourne which is 6 km from the CBD. It is close to 2 train stations, Ascot Vale and New Market, tram stops and buses. There are three parks at walking distance. There are also private schools and public schools. Flemington Racing Course is at walking distance. You can also walk to Maribyrnong and Union Road lifestyle shops, cafes and restaurants. And of course the Highpoint Shopping Centre is right next door to you by tram or bus. Then you have the Maribyrnong river and the walking and bike trail that goes all around it.
It is a 3 bedroom, 1 study, 2 bathroom, double storey townhouse with street frontage and its own courtyard.
That is not the exciting bit, the exciting bit is that I want someone to share my equity (capital growth) with me, over the next 5 years.
I will be settling the property this coming week of 26 of May, 2002. I bought the property off the plan in June last year for $350,000. I have a loan of $360,000 on it. Currently I have it on the market for rental for $390 / week. Having done my due diligence I believe it is a reasonable ask. Who ever is interested, I would be more then happy to share my due diligence with them, both rental and capital growth. I got the property valued for $445, 000. I asked the valuer to do a Market Valauation for me. When I bought the property, the developer was asking $385,000 for it. I got a discount, it took me almost 4 weeks of negotiation. Another townhouse in the development was sold for $385,000. There are total of three townhouses in the dev. The other two are Owner-Occupied.
Rather then renting out the property at normal $390 a week which will make the prop –ve cashflowed(i.e I have to pay for the difference between interest rate costs and the rental I get). What I am proposing is who ever rents the property off me for $505 a week for 5 years, at the end of 5 years can have 30% of the capital growth! This is a win/win situation for both parties. I get an excellent tenant for 5 years, and you get LOTS of equity just for renting from me! $505 will just cover the interest rate costs.
Let me do some figures for you:
Ascot Vale median prices have gone up by 80% over the last 5 years (www.reiv.com.au: REIV Median Price).
For this calculation I will use a moderate 7% capital growth.
Property Value = $445,000
Starting Point = $400,000 (above this point any capital growth will be shared 70/30 with the tenant. I get 70 % tenant gets 30%. That means an instant $11,250 of equity in your name just when you sign the contract!!)
After 5 Years at 7% Growth Per Year
Prop Val = $624, 136
Equity to be Shared = $624,136 - $400,000
= $224,136
Tenant Share = 30% of $224,136
= $67,240
In short you will get almost $70,000 at the end of 5years. I have all the legal documents that can make this happen. Any one who is interested, or didn’t quite understand any part of it, drop me an email, and I will be more then happy to explain this to you. Bottom line is you make heaps of money, and I have peace of mind for 5 years…a pure win/win situation. If anyone, had a property like this, and wants to do deal like this. I would be more then happy to be there Tenant…
Remember, the percentage can change depending on the deal. So it doesn’t always have to be 70/30. It could be whatever both parties agree to. It could be 50/50 if you are willing to pay more money per week. And remember the $505/week that you paid. That is $115(Market Price= $390) more then Market Rental Price, which equates to $29,990($115 * 52 weeks * 5 years) over the 5 years…but you are making almost $70,000!!! That is 125% ROI. And if the prop goes up even more..then you make more money.
Khurram Saeed
[email protected]
Hi All
This post is especially for people who are in the market to RENT close to the city.
I have an investment property in Ascot Vale, Melbourne which is 6 km from the CBD. It is close to 2 train stations, Ascot Vale and New Market, tram stops and buses. There are three parks at walking distance. There are also private schools and public schools. Flemington Racing Course is at walking distance. You can also walk to Maribyrnong and Union Road lifestyle shops, cafes and restaurants. And of course the Highpoint Shopping Centre is right next door to you by tram or bus. Then you have the Maribyrnong river and the walking and bike trail that goes all around it.
It is a 3 bedroom, 1 study, 2 bathroom, double storey townhouse with street frontage and its own courtyard.
That is not the exciting bit, the exciting bit is that I want someone to share my equity (capital growth) with me, over the next 5 years.
I will be settling the property this coming week of 26 of May, 2002. I bought the property off the plan in June last year for $350,000. I have a loan of $360,000 on it. Currently I have it on the market for rental for $390 / week. Having done my due diligence I believe it is a reasonable ask. Who ever is interested, I would be more then happy to share my due diligence with them, both rental and capital growth. I got the property valued for $445, 000. I asked the valuer to do a Market Valauation for me. When I bought the property, the developer was asking $385,000 for it. I got a discount, it took me almost 4 weeks of negotiation. Another townhouse in the development was sold for $385,000. There are total of three townhouses in the dev. The other two are Owner-Occupied.
Rather then renting out the property at normal $390 a week which will make the prop –ve cashflowed(i.e I have to pay for the difference between interest rate costs and the rental I get). What I am proposing is who ever rents the property off me for $505 a week for 5 years, at the end of 5 years can have 30% of the capital growth! This is a win/win situation for both parties. I get an excellent tenant for 5 years, and you get LOTS of equity just for renting from me! $505 will just cover the interest rate costs.
Let me do some figures for you:
Ascot Vale median prices have gone up by 80% over the last 5 years (www.reiv.com.au: REIV Median Price).
For this calculation I will use a moderate 7% capital growth.
Property Value = $445,000
Starting Point = $400,000 (above this point any capital growth will be shared 70/30 with the tenant. I get 70 % tenant gets 30%. That means an instant $11,250 of equity in your name just when you sign the contract!!)
After 5 Years at 7% Growth Per Year
Prop Val = $624, 136
Equity to be Shared = $624,136 - $400,000
= $224,136
Tenant Share = 30% of $224,136
= $67,240
In short you will get almost $70,000 at the end of 5years. I have all the legal documents that can make this happen. Any one who is interested, or didn’t quite understand any part of it, drop me an email, and I will be more then happy to explain this to you. Bottom line is you make heaps of money, and I have peace of mind for 5 years…a pure win/win situation. If anyone, had a property like this, and wants to do deal like this. I would be more then happy to be there Tenant…
Remember, the percentage can change depending on the deal. So it doesn’t always have to be 70/30. It could be whatever both parties agree to. It could be 50/50 if you are willing to pay more money per week. And remember the $505/week that you paid. That is $115(Market Price= $390) more then Market Rental Price, which equates to $29,990($115 * 52 weeks * 5 years) over the 5 years…but you are making almost $70,000!!! That is 125% ROI. And if the prop goes up even more..then you make more money.
Khurram Saeed
[email protected]
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