[Done Deal] 7.5% Gross Returns and Potential for the future
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Mangakakahi, Rotorua 4 Beds 1 Bath 119m2
This property was one that I had had my eye on for a few months. Originally, the vendors had price expectations that was unachievable. By the time my client had signed on with me, the asking price had substantially lowered and the numbers now were looking much more attractive. It was advertised at $499,000. but my client secured it at $460,000. This was a fantastic price for a 4 bedroom freehold property. There is potential to add-value through building a garage and tidying up the exterior.
My client had a budget of $650,000 and wanted a minimum of a 7.5% yield. We discussed cross-lease properties as an option because these tend to be higher yielding within that budget, but I was able to help him secure a superior property.
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This property was a strategic purchase for my clients, who were targeting strong cash flow and future equity growth. Acquired for $460,000 (plus fees), it delivered a gross return of approximately 7.5%, supported by a modest renovation budget of just $12,000. The freehold title, along with its location near schools and public transport, added to its appeal as a solid long-term investment.
The dwelling offers four bedrooms, one bathroom, off-street parking, and a private garden with a shed. There is also scope to add further value through the construction of a garage, enhancing both functionality and potential rental return.
Overall, this property demonstrates the fundamentals of a well-calculated investment: a low purchase price, value-add potential through upgrades, and strong tenant demand due to its location.