This is a property I’ve inspected & almost bought in 2018. I thought it was a good example of an apartment that can experience capital gains. Many people put down apartments (and in general they have been having lower capital returns) they can be great investments. For nice areas like Lane Cove on Sydney North Shore they can be the only property type accessible for many.
Sold History
Jan 2014 = $991k (off the plan)
Aug 2018 = $1.25m
Sep 2021 = $1.43m
Return is circa 4.9% p.a. since it was built and 4.5% p.a. since it sold 3 years ago.
It’s also been rented in the past at $845 p/w which is a gross yield of 3% on current price, 3.5% on 2018 price or 4.4% on 2014 price. Net yield (I think strata about $1.3k pq) 2.7%, 3% on 2018 price or 3.9% on 2014 price.
So the investment in 2014 would have yielded circa 8.8% p.a. in capital gains and net rental. This is before leverage!
With leverage, let’s just assume for simplicity that net rental yield of 3.9% covered interest costs at 80% LVR. Then your returns are simply the capital gains of 4.4% p.a. or 33% over 7.5yrs.
Your capital gain is approx: $1,430k - $991k - $40k stamp duty - $30k agent fees = $369k gain
Investment was $$238k (20% + stamp duty)
That’s a cash-on-cash return on equity of $369/$238k = 155% over the 7.5yrs.
Now before you start, there are probably plenty of things that can be improved on the above calculations. It’s simplistic for a reason. Just a basic example that apartments are not all a bad investment.
This post is to show, for people who can’t afford houses in these areas, that apartments are a viable option. This one in particular is a 3br penthouse level apartment with great outlook on Sydney’s North Shore.
Not all apartments are created equal.
302a/5 Centennial Ave, Lane Cove North
Sold History
Jan 2014 = $991k (off the plan)
Aug 2018 = $1.25m
Sep 2021 = $1.43m
Return is circa 4.9% p.a. since it was built and 4.5% p.a. since it sold 3 years ago.
It’s also been rented in the past at $845 p/w which is a gross yield of 3% on current price, 3.5% on 2018 price or 4.4% on 2014 price. Net yield (I think strata about $1.3k pq) 2.7%, 3% on 2018 price or 3.9% on 2014 price.
So the investment in 2014 would have yielded circa 8.8% p.a. in capital gains and net rental. This is before leverage!
With leverage, let’s just assume for simplicity that net rental yield of 3.9% covered interest costs at 80% LVR. Then your returns are simply the capital gains of 4.4% p.a. or 33% over 7.5yrs.
Your capital gain is approx: $1,430k - $991k - $40k stamp duty - $30k agent fees = $369k gain
Investment was $$238k (20% + stamp duty)
That’s a cash-on-cash return on equity of $369/$238k = 155% over the 7.5yrs.
Now before you start, there are probably plenty of things that can be improved on the above calculations. It’s simplistic for a reason. Just a basic example that apartments are not all a bad investment.
This post is to show, for people who can’t afford houses in these areas, that apartments are a viable option. This one in particular is a 3br penthouse level apartment with great outlook on Sydney’s North Shore.
Not all apartments are created equal.
302a/5 Centennial Ave, Lane Cove North