All Topics / Help Needed! / Rental returns … what percent?

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  • Profile photo of elitesportswearelitesportswear
    Member
    @elitesportswear
    Join Date: 2003
    Post Count: 5
    January 16, 2005 - 9:34 am

    Hi all,

    A quick question from someone who’s obviously still learning!

    If I see a property that is advertised as: “8% net rental return(gauranteed for 3 years through a lease back structure)” …. would you consider this to be a good buy? The 11 second rule doesn’t come off too well though …. but this all pans out OK for NSW?

    Any ideas?

    Thanks again,
    Anne

    Anne
    Elite Sportswear

    There is no such thing in life as a mistake … mistakes are really just new learning experiences in disguise.

    Profile photo of Julian2Julian2
    Member
    @julian2
    Join Date: 2003
    Post Count: 82
    January 16, 2005 - 11:08 am

    Anne,
    The question is not whether anyone else thinks this to be a good deal, but rather, do you think it to be a good deal?
    How does it work for you? Does it put you ahead or behind? What are the costs of taking on this deal? How much deposit are you putting in? What is likely to happen after the three year period? Is the current yield sustainable? What is the area like? Is it growing?
    These questions you should answer to yourself.
    Of itself an 8% nett return is deemed pretty reasonable (by many) these days – but that isn’t to say it advances your cause. Only you know what you are trying to achieve. And what you are trying to achieve is based on your own personal circumstances. What you have asked is a bit like someone asking, “Toyotas are running a special and they are all 10% off – is this a good deal, and should I buy one? Who can say, unless they know all of your personal details – and even then they might not know you, and what you want.
    Good on you for asking though, and best wishes with your investing future.

    Julian2

    PS As for the Toyota, I would recommend you save a little longer and get yourself a Porsche.

    Profile photo of elitesportswearelitesportswear
    Member
    @elitesportswear
    Join Date: 2003
    Post Count: 5
    January 16, 2005 - 12:55 pm

    Thanks Julian2,

    Appreciate your comments and will put all the figures on paper tomorrow and see if they suit what I need. I’m obviously just starting out and lacking a bit of confidence at advancing to the next step. I am grateful that you took the time to reply,

    Thanks again,
    Anne

    Anne
    Elite Sportswear

    There is no such thing in life as a mistake … mistakes are really just new learning experiences in disguise.

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