One of the more striking aspects about this article from The Age  is the monthly rental price tag for this Toorak mansion. $34,500 per month. $414,000 per year.

Is this exorbitant? Many people would say yes. But perhaps not if you’re wanting to rent a property worth between $8.5 and $10 million (the value suggested in the video embedded into the article).

Imagine you owned this property freehold and it was your only investment. It is an investment worth $8.5 million or $10 million. Income of $414,000 on on asset of this is a yield of somewhere below 4.9% or 4.1%, before factoring in other costs associated with owning the property.

From this perspective, you could argue that rent of $34,500 per month is too low!

Sonnie Bailey

Sonnie is an Authorised Financial Adviser (AFA) and former lawyer with experience in the financial services and trustee industries. Sonnie operates Fairhaven Wealth (www.fairhavenwealth.co.nz).

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