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Sam Tamblyn

Buying below replacement cost can bolster property investment returns

The owners of assets bought below replacement cost do not need to seek outsized rents to cover the financing, which can help secure stable tenants.

Shrewd investors may want to seek out commercial properties selling for below replacement cost because they can produce market-beating returns.

Replacement cost refers to the total cost in today’s dollars of replicating a property, including land acquisition, construction and other associated costs.

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Sam Tamblyn is founder and managing director of Urban Property Australia.

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    Original URL: https://www.afr.com/property/commercial/buying-below-replacement-cost-can-bolster-property-investment-returns-20241017-p5kj8d