All Topics / Help Needed! / Is this a good deal?

Viewing 5 posts - 1 through 5 (of 5 total)
• David Anderson1
Member
@david-anderson1
Join Date: 2009
Post Count: 12

Here is some figures on a property I have found

Interest only investment loan

5.81% fixed rate for five years

300K purchase

30 year term

\$335.19 repayments per week (\$17429.88 P/A)

\$390 rental payment per week (\$20280 P/A)

+ \$2850.12

Does this seem like a reasonable investment? How do you calculate the yield?

freelance
Member
@freelance
Join Date: 2008
Post Count: 93

Hi DrSupachicken,

Your yield is calculated by dividing your annual rent by the purchase price and multiplying the result by 100, i.e:

Yield = (Annual Rent / Purchase Price) x 100
Yield = (\$20,280 / \$300,000) x 100
Yeild = 0.0676 x 100

Yeild = 6.76%

Sounds like a good return to me considering the 5.81% interest rate.

David Anderson1
Member
@david-anderson1
Join Date: 2009
Post Count: 12

Do you factor in overheads when yu calculate yields? Or is that something you factor into tax?

duckster
Participant
@duckster
Join Date: 2004
Post Count: 1,674

is 5.8% the cash rate given by RBA because if it is the bank doesn't lend money at this rate but adds a profit margin to it to come up with lending interest rate. Check with lender before borrowing and also what the fixed interest rate is.

keiko
Participant
@keiko
Join Date: 2008
Post Count: 513

drsupachicken its just an average deal. theres better out there, but then it does depend on the property as well if it will give you realy good cg down the track it mite be worth it

Viewing 5 posts - 1 through 5 (of 5 total)

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