4.5% compounding.
Also refurb costs have to come out if the DMF which isn't typical for a 7 year old rental.
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superfluous to requirement
When residential housing is leased to a tenant costs such as maintenance and insurance are built into rent.
Similarly if I rent an apartment and pay a body corporate I would pass this on in rent.
I understand your point but if you want to compare incoming revenue from ILUs to rent you should include weekly fees.
Well as rent would be paid monthly for agreements sake instead of $300k on a million over 7 years it's worth circa $370k. Could be more if the rent was invested at higher than the 4.5% yeild. I.e if the rent was put in the bank.
It's still a good deal for the operator, but it's not free.
superfluous to requirement
What is stopping "the operator" from putting the whole $1m in the bank for the average 7 years tenure? Why focus only on the difference of 30% that is not repayable at end of term? This seems to assume the operator does not have absolute 100% control over the full $1m and can do anything they want with it, until such time as the 70% needs to be repaid.
superfluous to requirement