Double your investment in 7 years
Suburb: Hoppers Crossing
Client Type: Commercial Investor
Service: Search > Assess > Negotiate
Property: Warehouse 191m2
Purchase Price 2016: $320,000
Rental Yield 2016: 6.4% pa
Current Value 2023: $620,000
What an incredible return on investment over 7 years. Our client saw his commercial property double in value!
We helped our client find and buy a commercial property in Hoppers Crossing in 2016. The property selected was in a premium industrial development with easy access to the Princes Highway. The warehouse had a floor area of 190sqm with a bonus 7m internal ceiling height. Meaning in the future a mezzanine floor could be added as a value add. The property had an allocated car park with casual parking for deliveries and pickups close by.
This case study is an excellent example of applying important buying principles for commercial properties and how together they equate to a very profitable and secure investment:
- A premium location
- Long term lease
- Good quality tenant with proven history
- A healthy rental yield.
2016 PURCHASE CONDITIONS
Purchase Price: $320,000
Lease Length: 14.7 years remaining
Annual Rental: $20,500 (plus tenant pays all outgoings)
Gross Yield: 6.4%
Rent Increases: 3% annually
2023 CURRENT VALUE
Seven years later our client is now in an excellent position and has enjoyed significant capital growth with planned and steady rental increases.
Current Value: $620,000
Increase in Value: $300,000
Total Capital Growth: 93.75% in 7 years
Average Capital Growth % Per Year: 13.39%
Current Rent: $25,212 per annum
This is a great example of commercial property investing done right. As the property has increased in value significantly, our client could now sell at a profit or use the equity in his property to make further property purchases.
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