What is Nathan buying at the moment?
Do you remember the last time you bought something for less than 10 cents? If you’re young enough, you probably never have. Many of us will have spent that much on a red or green frog at the primary school canteen sometime back in the 20th century.
Well Binvested founder Nathan Birch spent 8 cents only a couple of months back on a square metre of land.
In fact he did it many times over, when he stepped away from his normal investment strategy to purchase a block of 5 million square metres of land in rural NSW. If you are more familiar with other forms of measurement, that’s around 1250 acres or 500 hectares.
There is a road frontage of 6km and the land is around 1km deep too.
He bought all that space for $400,000; basically the price of a one-bedroom apartment in a major metropolitan area.
If an average block of land is around 500 sqm, Nathan’s new parcel would technically be capable of housing around 10,000 residential blocks. Not bad when you consider those blocks would have set him back about $40 each!
But this is a remote area and he won’t be developing it into residential blocks.
Special purpose property
Property like this is not something Nathan would normally buy and it’s absolutely not something he would recommend to a client looking to accumulate wealth by building a foundation property portfolio. These properties don’t generally generate any sort of income and there is no obvious immediate resale value, as you would need to find a market of people looking to buy something so niche.
This is a special purpose property and Nathan plans to use it for private production purposes. And in typical Nathan style, he doesn’t want to give away all his secrets, so we will have to wait and see what he ends up doing with the space.
The land is a bit out of use and unkempt, so it’s not ready for prime farming, but Nathan does like the fact there is a little bit of tree and scrub on the frontage of the block, as this will create privacy for the mystery project he will be establishing there.
See it to believe it
Nathan doesn’t usually inspect the properties he buys because he makes purchases based on numbers. But on this occasion it wasn’t all about numbers, he needed to inspect the land to make sure it could be used in the way he wants. While driving there he wanted to see what 6km would look like as a road frontage and within a 6km stretch he passed two silos and a couple of towns… he realised it takes a bit of context to bring home what a big area it actually is. About the size of a Greenfield site in a capital city. It is a reminder of the importance of having a great foundation property portfolio; it means you can then go out and buy lifestyle or special purpose properties.
We’re all looking forward to seeing what he comes up with for the site!