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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!


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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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