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Investment Purchase Price                                           $445,000
Deposit 10%$45,000
Stamp Duty$8,900
Building and Pest Report$650.00
Solicitor Costs*$1,700
  
Total$56,250
  
Purchase Price + Purchasing Costs$456,250
Gross Annual Cash Flow Return ($520 per week x 52)$27,040
Expenses (Interest, Rates, Management fees)$15,100
Net Annual Cash Flow Return$11,940

Now – Let’s Look at the Cash-on-Cash Return

Deposit Needed = 10% + Costs$56,250
Return on Equity (pure cashflow return)26.5%
  
Return on Equity with a 5% Capital Growth Rate75.9%
Return on Equity with a 7% Capital Growth Rate95.7%
Return on Equity with a 10% Capital Growth Rate125%

Client Brief:

We are first time investors based in Darwin. We are looking for a great asset that is positive cashflow and primed for Capital Growth. We would like this property to increase our annual income and equity position so that we can build a high performing investment portfolio.  – Paul & Sam

Our 6 Strategic Investment Principles

  1. Does the property appeal to owner occupiers? *YES* In established suburb with high owner occupier rate
  2. Is the property below intrinsic value? *YES* Significantly below median suburb price of $550,000
  3. In a suburb with a history of growth and stability? *YES* very solid growth and stablity due to desirablity and demographic
  4. High Land to asset ratio? *YES* Very high land content value being an established property in leafy green estate
  5. Does it have a twist? *YES* No rear neighbours and backs onto a beautiful creek
  6. Can you manufacture growth through renovations or development? *YES* Renovation potential including option for backyard pool