Can someone help analyse this deal

Hi all

Thanks for your replies and i’ll try and address some questions.

Dr.X
The vacancy rate for the townhouses is virtually nil. This particular townhouse has never been without a tenant.

Management fees under the current PM are 7%.

The townhouses i have looked at similar are around $300000.

I had an independant valuer do a valuation and they came up with
1700000 for land
1400000 for building
total 310000

There rental appraisal unfurnished was $300 a week.

Yes it is torrens title so land under is part of it. The land is actually 115sqm and the building 80sqm thus the company title for shared drivethrough to garages.

Yes Hallet Cove and some other areas but i find that paying say 275000 for a house and land the best sort of rent would be about 230-260 a week which would be more negatively geared.

Gross realisation
The vacancy rates are very low
townhouses in the area sold for 295000-320000 similar.

Rental term has been 12 months each lease
management fees 7%
building insurance 400pa
landlord insurance contents included 205pa
furniture is virtually brand new so no need to refurnish for a while carpets in good order and paint etc.
Demographic is mixed but more in the 25-35 age group.

Hope this gives some additional information i really like this but i don’t want to get emotional on it.

At 390 a week plus depreciation for furniture/fixtures and fitting/building it should be close to neutral i figure.

What i like about it it can be used for short term accomodation that is leased to a company to manage and run it with a guranteed return this would give me 4% building depreciation or leave it as Residential and still get the 2.5%.

Hope this helps. Any input welcome on th eabove.

I do find that city property appears to be getting better rents than in the outer suburbs. The cost of the property is pretty close. I reckon CBD could be undervalued.

This is not a multistory set up they are all two storey townhouses.

I guess what i am seeking do i use the unfurnished rental to do the calcs or the real amount that i would get furnished.

regards
SG

Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”

Hi mum

I am pretty sure it is a company title. Each townhouse owns there own bit of land extending ahead of the garage and front door. This means that other vehicles will drive over your turf. A company name was created and registered. There are no financials just a yearly fee. So one would become a managing director of part of a driveway….lol

cheers
SG

Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”

Hi Dr. X

Thankyou for your reply.

What do you mean by lost deals just by doing this?

So in this situation should one use the unfurnished rental figures or the actual whats happening furnished?

Kind regards
SG

Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”