Every year at B.Invested is busy and full of action, with plenty of amazing client deals and achievements. The year 2022 was no different, even though market conditions were different than recent previous years.
How do the markets look?
Interest rate rises that began in April signaled the end of the Covid growth party for most Australian markets around Australia.
As borrowing power began to fall while repayments rose, we no longer saw the crazy money being thrown at property purchases that had been over the past two years.
The main states where b Invested is active with its clients are NSW, QLD and, to a growing extent, WA.
Sydney has been tough when it comes to finding value for a long time now, but b Invested founder Nathan Birch found some great opportunities this year.
Nathan was able to pick up units around the Parramatta area for $100,000 less than what they were selling for five years ago.
A bargain now is great because already, with rates rising, Nathan has noticed those affordable markets in Sydney picking up again as borrowers are pushed towards lower price ranges due to falls in serviceability.
Up north, areas like the Gold Coast, Brisbane and Sunshine Coast have been favourite locations in recent years, but value growth has meant there are fewer deals to be had. Nathan was doing 50 deals a month in southeast Qld a few years ago, but has now seen properties that were once worth $200,000 being sold for $600,000.
Nathan is over the moon for his many clients that have now banked some serious equity there.
Perth is still presenting some bargain value opportunities and Nathan is doing more deals there now than he used to.
This year at the b Invested Christmas party, Nathan continued his tradition of awards for clients with big success stories.
Highlights this year included a number of people who had reached a 20-property portfolio. One client had acquired 34 properties in two years; another began with b invested last November and has now reached 20 properties.
Another purchased her 18th property in two years after starting out with $80,000 in savings.
These stories make Nathan reflect on how few people in Australia actually have portfolios of 10 or more properties and how b Invested has helped changed so many lives and see so many dreams realised over the past 14 years.
Snapshot of 2022
Over the course of this year, b Invested:
-Purchased 1156 properties in total for investors
-That’s $140 million worth of property
-Helped 517 new investors start their journey
-Generated $21 million of rental income for new investors
-150+ investors cracked double digit portfolios
-300+ investors reached six or more properties
-15 clients scaled back on paid workforce income
-$360 million of new loans generated
-$140 million of equity for investors to buy new assets
-Generated over 2200 new loans
-Spoke to over 2000 new clients
-Collected over $50m in rent
-1600 rental increases at an average of $65 per week (up from $35 per week last year)
-22 motel properties settled
-Blink Property and Zinger Finance Group celebrated 10 years in business
7 deals for the highlight reel
Some of Nathan’s highlight deals for this year have included:
-A house in a decent area for $90,000, renting for $280 a week
-A two-bedroom property in a capital city area for $160,000, renting for $320 a week and a 10% yield.
-A one-bedroom unit in Sydney for $265,000.
-A block of four units for $370,000, renting for $900 a week.
-A duplex pair for $320,000, renting for $600 a week.
-A unit for $400,000, revalued two days after settlement for $520,000. It was five years old in a CBD area.
-A block of 10 units for $800,000, which were worth $2 million and rent for $4000 per week.
Looking toward 2023
Interest rates rose higher and faster than expected in 2022. Nathan believes that by July 2023, we’ll start seeing rates cut again, which will boost client cash flow.
Nathan sees a big opportunity for investors waiting to get in the market, as long as they stay on top of their finances and are aware of how rate rises have affected borrowing power.
On the flipside, the worst pain is yet to come for some people. Mainly, those who have been on fixed rate repayments and are going to have to suddenly go from paying 2% to 5%.
This will be a shock and Nathan believes it will really bring to light the evidence of the recession that we are already having. Nathan anticipated this will end in more money printing and stimulus packages, which will see inflation rise again.
And like he always says, getting assets is best, because cash is trash.
The b Invested strategy
Nathan admits, the B.Invested strategy is boring. It’s not sexy or flashy, it just involves buying the right properties at the right price.
The properties that B.Invested finds for clients are recession proof. They are below market value, with an upside for growth and good cashflow. They are at the affordable end of the market where there will always be people who can afford to rent them or buy them.
The B.Invested strategy is to minimize risk and let the natural cycles of the market do the work for you.
Nathan believes a lot of his clients will do really well out of this market, even with a recession and the future is bright for 2023 and beyond. If you want to get cracking or just need more information, reach out to b Invested and we can help.