The rent (of $34,500 a month) is too low!

2 August 2013

reading time:  minutes

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!



About the author 

Sonnie Bailey

When he's not writing erotic, supernatural, mystery novellas, Sonnie provides financial planning services via his business, Fairhaven Wealth (www.fairhavenwealth.co.nz). Fairhaven Wealth provides independent, advice-only, fixed-fee financial planning services. Sonnie is also a “recovering lawyer”: he has specialised in financial services, trusts, and estate planning.

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