Is this a good deal

Well losing money is losing money and making money is making money. U only wana lose money if u make enuff money to offset it. I would suggest u go thru Steves Book again b4 u decide. If u dont include capitol gains in the calculations then any capaitol gains u do have is a BONUS. IF u do include capitol gains and u dont have any u lose.

Regards Bear

quote:

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Hi everyone,
I’m very new to this (don’t have any IP’s Yet).
Been offered a deal and would like advice if it is any good.
Commercial unit $125000 with 2 year lease at $15000 rent PA. Based on Steve’s figures its only 17-18% but is metro area and could have reasonable capital gain
Any suggestions Please.
Thanks Cobra

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That looks like a 12% return to me.

There are some differences with commercial that you need to be aware of. Not bad things – just different things.

LVR are often lower although nearly anything can be done – for a price[]

Vacancies can be longer. Houses are usually rented within days, commercial can be empty between tenancies longer.

Commercial tenants often pay more outgoings than residential. Often they do repairs, pay insurances, etc

All the best,

Simon Macks
Mortgage Hunter
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

make sure you check if that rent includes GST. if it does, then the ‘actual ret’ is 9.1% lower.

Cobra8272

To me, another important thing to consider is the lease term. You mentioned a two year lease – is there further options of another two years? If this leasee was to vacate at the end of the two years, what uses could be made of the building? Many questions need to be asked and considered.

Bribie