How to have both Cashflow and Capital Gains Properties
Property investing doesn’t have to be about choosing between capital growth and cashflow, no matter what some so-called ‘experts’ might say.
You can achieve both, as long as you find the right properties in the right markets.
When B.Invested founder Nathan Birch sources properties for his clients or himself, he makes sure they tick both boxes, as well as a number of others.
The ripple effect
Often the affordable end of the market is where you can find the most rental yield and, if you’re talking about the fringes of a city or large regional area, it makes sense that you could also achieve capital gains. Why? Because growth in major centres often has a ripple effect. As buyers and renters get priced out of the middle rings, they add demand to the fringes and push up the prices there too.
If you strike at the right time, you can score a cashflow positive property that will also deliver capital growth. Sure, small amounts of capital growth may not sound like a lot to someone looking to get rich quick, but the compounding effect of smart buys can achieve just as good a result, without speculating on one high risk property.
Nathan built his empire by scoring deals and using instant equity to repeat the process, with multiple investments in affordable markets.
A value increase of $50,000 per property, on 10 properties, equals $500,000… all on assets that are paying themselves off. That’s good growth by anyone’s measure. And if something goes sour on one property, there are 9 others pulling their weight.
Make money on the way in
One way to put an instant boost on your upside is to make sure you purchase for below market value. This is the third key pillar of Nathan’s strategy.
If you can get yourself a deal and pay below what similar properties are going for, you can create instant equity and therefore growth. This can be achieved in a time where market sentiment is flat or poor in a certain area. You can buy something and get it valued soon afterwards. You don’t need to sell it again, so you don’t need to settle for a lower value like the person who sold it to you did.
When valued at market rate, you might even have enough equity for a deposit on your next purchase. This is something B.Invested is able to achieve for its clients regularly.
This is how we do it
Unlike the growing number of scammers and spruikers out there, B.Invested always has concrete examples of recent deals that show Nathan’s strategies at work…and working.
Here are a few recent deals Nathan and the team have managed to source this year.
- A 2-bedroom Unit QLD
The property was purchased for $220,000, is rented out at $450 a week at a gross rental yield of 10.6% and now has a current value of $280,000.
- A 1-bedroom Unit WA
This one was purchased for $220,000, already has a market value of $265,000 and commands $370 a week in rent at a yield of 8.7%.
- A 4-bedroom Duplex QLD
This one was purchased for $235,000, has an incredible instant gain with a market value of $320,000 and rents for $560 a week at a 12.4% yield.
- A 2-bedroom Unit QLD
This was purchased for $172,000, is currently valued at $240,000 and yields 7.5% with its weekly rent of $350.
And for those who thought NSW deals were no longer possible…
- A 1-bedroom Unit NSW
This was purchased at the right time for $265,000 and is now valued at $330,000. Its weekly rent of $340 translates into a 6.7% yield.
It’s not easy
If these deals seem unlikely, it’s because they are. Well, it’s unlikely anyone but the most seasoned investors will stumble on them anyway.
B.Invested is able to source these deals because of decades spent researching markets and building relationships with agents all over the country.
Agents know Nathan is a genuine buyer and will save them the trouble of going through a listing and marketing campaign, especially if they have a vendor who is motivated to sell.
If you don’t have a spare couple of decades up your sleeve, you can leverage Nathan’s experience by reaching out to B.Invested and beginning or continuing your investment journey on the right path.
