Our clients enjoy very high yields since they only commit funds that are a fraction of the value of land yet entitled to all the equity generated in the absence of bank interests.
For instance, if the Sale price is AUD 19, 110 for 1/8 acre of land to be settled in 2 years, the client only pays AUD 465 per month for 10 months. The buyer who opts to seek finance or pay for the land upfront will also have to immediately pay for some of the costs of acquisition including initial costs of the finance application. By the end of the term all costs including bank interest may be well over 45% of the Price of Land (AUD 9,660). The least amount required to meet the initial expenses excluding the 2-year interest may be AUD 2,520. Assuming this parcel of land appreciates to AUD 23,310 in 2 years, then it is right to say that the equity created is AUD 4,200 for the 2 years the client held the position. Remember the purchase price was AUD 19, 115 but the buyer only paid AUD 4,620 (10 instalments of AUD 465). What this means is, AUD 4,620 gave a yield of AUD 4,200, a remarkable return on investment of 45% per year. The customer who purchased upfront pays AUD 21, 630(19,110+ 2,520). This means the investment of AUD 21, 630 yields only AUD 1,680 in 2 years’ equivalent to a low yield of 3.9% per year.