Commercial Property Purchase Costs

Spins

Looking at commercial investment property details, most agents brochures give the guide price and the yield assuming purchaser costs of 4.46%.

What makes up the 4.46%?
I know stamp duty is 2% but what makes up the rest and how do they arrive at such an exact number as 4.46%

Thanks

funny_head

Spins wrote: »

Looking at commercial investment property details, most agents brochures give the guide price and the yield assuming purchaser costs of 4.46%.

What makes up the 4.46%?
I know stamp duty is 2% but what makes up the rest and how do they arrive at such an exact number as 4.46%

Thanks

dont know how they get 4.46% but unless your registered for vat , you have to pay 13.5% along with 2% stamp duty

what kind of yields are you aiming for , is it retail , office or industrial

Spins

Don't mind what property type as long as the covenant is good and lease is >10 years. Also, the less the management responsibility, the better.

Found out about the standard 4.46% by the way.
Stamp duty 2%
Sales fee 1% plus vat @23%
Legal fee 1% plus vat @23%

Sales fee seems low at 1%, no?

newacc2015

Spins wrote: »

Don't mind what property type as long as the covenant is good and lease is >10 years. Also, the less the management responsibility, the better.

Found out about the standard 4.46% by the way.
Stamp duty 2%
Sales fee 1% plus vat @23%
Legal fee 1% plus vat @23%

Sales fee seems low at 1%, no?

4.5% seems like a pretty low yield. There is plenty of commercial units with yields of 7-9% in Dublin. There is plenty of residential units with yields of over 10% in Dublin City

The yield is generally the annual return divided by the listed sale priced eg rent of €30k and listed price of €300k is a return of 10%.

When you see a yield of 1.5% on a Government bond, it doesnt include all the sales fees etc