PROPERTY INVESTMENT REPORT

„The Winery‟
Barossa Drive, Minchinbury

KEY INVESTMENT
FEATURES

 Settlement late 2012

 Strong rental yield

 Close proximity to
major transport and
infrastructure

 Low holding cost

 Qualifies for stamp duty

exemption saving over
$11,000

Originally a vineyard and operating winery producing primarily champagne, 'The Winery‟ represents a low
cost opportunity to enter the Sydney residential property market at a time when the market is presenting
strong counter-cyclical buying opportunities with attractive rental yields and low after tax holding costs.

Grapes for winemaking were introduced to the Minchinbury area in 1859 by Dr Charles Mackay. The Winery
land was purchased in 1912 by Penfolds who operated the winery until it closed in 1978. Under Penfold‟s
management The Winery's champagne and burgundy production established Minchinbury as an
internationally known label. In the final years only champagne was produced at Minchinbury. It was the
first large scale champagne producer in NSW.

„The Winery‟ is a unique complex of 49 dwellings

comprised of 17 two bedroom apartments, 31
three bedroom townhouses and apartments and
1 one bedroom apartment.

It is located in a convenient position adjacent to

numerous local facilities in the established
suburb of Minchinbury in western Sydney with
easy access to schools, shopping centres, the
Great Western Highway and the M4 Motorway
which links with the M7 and M2 providing ready
access to major employment centres.

The townhouses are priced at an average of

$355,000 with rental of around $390 per week
reflecting a gross rental yield of around 5.71%
per annum.

Quartile Property Network Investment Report - (02) 9499 4999 ‘The Winery’, Minchinbury
P RO P E R T Y I N VE S TM E N T RE P O R T „ T h e Winery‟—Minchinbury

Minchinbury

Minchinbury is a suburb of Sydney, in the state

of New South Wales located west of the Sydney
central business district, in the local government
area of the City of Blacktown and is part of the
Greater Western Sydney region.

Minchinbury is predominantly a residential area

with a small commercial/retail area in the centre
and industrial/commercial zones in the western-
most part.

Residential housing in the suburb is mainly well

presented three to four bedroom project homes
of brick veneer and tile. Operating as a vineyard
and winery until 1978, Minchinbury has a
younger more modern feel than surrounding sub-
urbs.

The area is adjacent to the newly developed

commercial centre and business park on the Aus-
tralia‟s Wonderland site which is providing signifi-
cant white-collar employment in the area.

Access to the western rail line as well as the M4

The Rental Market
and M7 freeways, provides transport options in
all directions. Subject to normal market fluctuations, we are of the
opinion that a 2 bedroom unit in “The Winery” should
generate a rental income of between $385 and $395 per
week.

$390 per week would generate an annual rental income

of $20 280.

A vacancy factor of 2.0% has been allowed in this

investment report. The gross rental yield, which is
calculated by dividing the total annual rent into the
purchase price is 5.71%.

Successful management of an investment property

requires specialised knowledge. Quartile Property
Network has specialised in managing investment
property throughout Australia for almost 60 years. We
are committed to ensuring our clients‟ investments
perform as efficiently as possible. Quartile is able to
manage your investment in „The Winery‟ for you if
required.

‘The Winery’, Minchinbury

Quartile Property Network Investment Report - (02) 9499 4999
P RO P E R T Y I N VE S TM E N T RE P O R T „ T h e Winery‟, Min chinbury

Income & expenditure (year one)

Cash flows and other projections for this property should be prepared based on your personal
tax rate, levels of borrowings etc. This is strongly recommended before a decision to purchase
is made.

Assumptions:
Purchase price $355 000
Cash investment Nil
Loan amount (inc l. s tamp duty, bank & legal cos ts ) $358 061
Interest rate 7.41% (3 year fixed)
Rental income $390 per week
Vacancy rate 2%

Gross rental income $20 280

Gross yield 5.71%

Estimated rental expenses :

Body corporate $2 200
Insurance $355
Letting fee $390
Maintenance $220
Management $1 640
Rates $1 510
Total $6 315

Net return $13 559

Net yield 3.82%

Loan interest $26 532

Estimated non-cash expenses:

Borrowing costs (amortised) $420
Building allowance (2.5%) $4 750
Plant & article depreciation $4 585
Total $9 755

„The Winery’, Minchinbury

Quartile Property Network Investment Report - (02) 9499 4999
P RO P E R T Y I N VE S TM E N T RE P O R T „The Winery‟, Minchinbury

Tax position summary (year one)

Gross rental income (less 2% vacancy rate) $19 874
Total tax deductions $42 602
Tax surplus/deficit ($22 728)
Before tax cost ($12 973)

Marginal tax rate Annual after tax saving Average weekly holding

16.5% $3 750 ($177)

31.5% $7 159 ($112)
38.5% $8 750 ($81)

46.5% $10 569 ($46)

TAXATION BENEFIT

Residential property held for investment purposes may

attract substantial taxation benefits.

At a marginal tax rate of 31.5%, this property shows an

annual tax saving of $7 159 in the first year of
ownership.

Under the Taxation Act taxpayers may have regular

group tax instalments reduced immediately, utilising
the tax saving to minimise the holding cost. The chart
shows both before and after tax cash flows based on
the previous assumptions over a 25 year period.

CAPITAL GROWTH

A property in „The Winery‟ acquired at a price of

$355 000 funded by 100% borrowings (including all
acquisition costs) and escalated in value at 8% per
annum compound shows substantial equity growth over
a period of time.

If principal and interest borrowings are used the equity

would be greater as principal decreases, however, an
interest only loan may be more cash flow and tax
effective.

Quartile Property Network Investment Report - (02) 9499 4999 „The Winery’, Minchinbury
 P RO P E R T Y I N VE S TM E N T RE P O R T „The Winery‟, Minchinbury

The real cost of property investment

Cash flows and other projections for this property should be prepared based on your personal tax rate, levels of
borrowings etc. This is strongly recommended before a decision to purchase is made.

Quartile Property Network provides three main services to clients. Formulating the right property investment
strategy for individuals, locating the right properties in the right market and providing ongoing property investment
management.

For a free consultation to assess your property investment options, optimum strategy, how the banks could assist ,
as well as identifying the real cost to you before and after tax relating to specific property recommendations, follow
the link below or call us on (02) 9499 4999.

With this information you can properly assess whether property investment suits you. If you choose to do nothing -

the next step

Quartile Property Network

Level 2, 802 Pacific Highway Gordon NSW 2072
Telephone: (02) 9499 4999 Fax: (02) 9499 4222 Toll Free: 1300 650 650
A Division of Quartile Marketing Pty Limited ABN: 93 054 364 500 Incorporated in New South Wales

Disclaimer: Quartile Property Network (“QPN”) and its related businesses make no representation and give no warranties as to
the accuracy of the preceding information and does not accept any responsibility for any errors or inaccuracies in or omissions
from the information contained therein (whether negligent or otherwise) and QPN shall not be liable for any loss or damage
howsoever arising as a result of any person acting or refraining from acting in reliance on any information contained therein.
No reader should rely solely on the information contained in this report as it does not purport to be comprehensive or to render
specific advice.

Any prospective investor should consider their personal circumstances when assessing the suitability of investment property.
Prospective investors should make independent enquiries to confirm relevant details as well as consult their professional advisers.

This disclaimer does not purport to exclude any warranties implied by law which may not be lawfully excluded. QPN is a licensed
real estate agent (Licence No. 806551) and, as such will receive commissions paid by the vendor on the sale to a Quartile client of
any property described in this report.

Warning: The advice contained in this report is general advice and its preparation has not taken into account any person‟s
circumstances, objectives, financial situation or needs.

An intending purchaser should assess the suitability of any investment in property in light of their own needs and circumstances
which they can do themselves or by consulting an appropriately licensed financial adviser and/or taxation specialist.

Quartile Property Network Investment Report - (02) 9499 4999 „The Winery’, Minchinbury