Have You Missed The Property Investment Wagon?
How many times do you hear people say, ‘if only I’d bought in Sydney in the late ‘90s, or early 2000s, or even before 2013 when the last property boom took place’?
They think they’ve missed the boat because values shot up in those periods, home prices are now out of reach and there is no more money to be made.
But the fact of the matter is that there are still deals to be made, value to be earned, equity to be withdrawn and used, and portfolio growth to be achieved.
If you actually had have bought property in the ‘90s, chances are you wouldn’t have had much cash flow, at least to begin with. Back then people were dealing with interest rates of 12 or 13% and, in some cases, higher! Interest was the major hurdle for buying property.
Nowadays, interest rates have never been so low. There are lenders out there offering rates around 3% for interest only loans, which are preferred by property investors.
To put this into perspective, if you borrowed $400,000 to purchase a property for $500,000, at 3%, you would be paying less than $1000 a month in interest and most likely bringing in $2000 plus in rental income.
Remember, there is no one single Australian property market. Values may peak in Sydney or Melbourne, but other capitals are on the way down. Then there are regional areas that are primed for growth.
We often hear the media talk about Australian property booms and crashes, but provided your portfolio contains properties purchased below market value, in a diverse range of markets, you will be able to future proof your wealth.
The bottom line is that not only are there markets out there brimming with value opportunities, but there are deals to be done in ALL markets.
So, where are these deals?
You may think you need a household income of $200k plus to be a property investor these days, but that’s not the case. At Binvested, we have been busy this year helping clients grab incredible deals, even as markets dealt with lockdown restrictions and economic uncertainty. Here are some of the deals we’ve done in Sydney alone, where all the value is supposed to have dried up!
- 10 of the best
We recently purchased a block of 10 two-bedroom units in Sydney’s inner west for $5.6 million, which is $560,000 per unit. Soon after purchase, we had the units valued at $662,000 per unit. That’s more than $100,000 in value created immediately for each owner.
We helped a client purchase a property in the Parramatta area in late 2019 for $360,000. It is tenanted and the rental return is $400 a week. Similar properties in that neighbourhood are currently fetching between $450,000 and $500,000. So with a new valuation, our client has $80,000 to $100,000 in equity, which they will withdraw to buy a block of six units in Queensland for $600,000, bringing in $1500 a week in rent.
We helped a client purchase a property just 13km from the Sydney CBD for $330,000 earlier this year. We recently had it revalued for $440,000. That’s $110,000 of value growth in just six months. Our clients were able to take out the equity and snap up another Sydney deal for just $275,000, which has already yielded further equity.
- Best western
We did a deal in Toongabbie, a two-bedroom unit in a 15-year-old complex for just $358,000. The rental return is currently $400 per week and right away we had it revalued at $460,000. We used that equity to purchase another property for the same investor, only 3km from the Sydney CBD, for $490,000.
We’re here to help
Finding these deals is very hard for a first time investor, which is why an agency like Binvested is a great place to start. We do the research and leg work so you don’t have to. You haven’t missed the boat after all, so reach out to us and we’ll help you get on board.