Hello and welcome to my August 2021 portfolio update. If you want to check out my portfolio update from last month click here.
Portfolio update
August has been a pretty quiet month from my portfolio’s point of view. All four properties continue to tick along with not too much price movement from each of the properties. There weren’t any issues from a maintenance perspective or any renewals of leases. Last month I mentioned how I am looking for my next investment. Fortunately, I have been able to sort out finance which took a lot longer than first thought. With this, I am now in the process of searching for the next investment. I have come across a couple of properties that meet my search criteria but am yet to put anything under contract. Over the course of September, I suspect I will have more news on this front.
Market update
Looking at the data provided by SQM research we can see that over the past 12 months every major metro market, both houses, and units, has seen positive price growth. This matches the theme over an extremely “hot” property market across the country. A combination of low supply and availability of credit is likely the accelerator of this boom. This is great news for property owners and investors as a large proportion of these people will have seen strong price growth.
A key takeaway from the graph below is that Sydney house prices have fallen by 3.5% over the course of the last month. This is likely attributed to the fact Sydney is currently in an extended lockdown which has put numerous industries on hold. This is likely to explain why the capital city averages have also dropped by 1% over the last month. Sydney making up a significant proportion of houses within these major metro cities would heavily impact the capital cities average.
As discussed last month, averages don’t reflect your investments. This can be evident within the data below and contrasting this to my own portfolio. Fortunately, my portfolio is Brisbane-based and therefore has continued to see price growth despite the national average decline. Therefore, the graph can’t paint a picture on a national level. Though, this is not reflective of your own investments.
Best performer
The best performing metro asset over the last 12 months is Hobart houses. Last month we discussed how Sydney houses were leading this race. Though, due to the recent decline, the leader has changed places. Despite being in the first place there are numerous other markets that are close to Hobart’s house performance. Sydney and Adelaide have all seen above 10% growth.
An interesting statistic to note is the national average vs capital city average. We can see that the national average for houses is 15.6% while the capital city average for houses is 10.2%. To clarify, the national average encompasses all properties across the country (that are houses). This means metro markets again are appearing to outperform metro markets. How long will this last? No one can give a definitive answer but it goes to show capital growth has no favorites. That is to say, you can make money by investing in multiple markets, not just the major capitals.
August 2021 portfolio update: Property breakdown
Last month I saw extremely strong price growth for my portfolio. This month the properties have not moved to the say extend and have shown pretty similar values to the previous month. Fortunately, I have been able to hit the 1.7m mark as I continue to work towards my goal. The only major change that has occurred is the refinance of two loans. As I continue to look to build my portfolio I have been able to tap into the equity of two properties by refinancing their loans with a different lender. In doing so, I can use the equity to fund future purchases. Outside of these refinances, it has been a relatively quiet month.
The Numbers
|
Strathpine, Qld. |
Woodridge, Qld. | Bethania, Qld. |
Loganholme, Qld. |
|
| Purchase price | $390k | $250k | $317k | $331k |
| Current value | $530k | $350k | $410k | $410k |
| Loan | $393k | 198k | $288k | $268k |
| Rent | $400 pw | $335 pw | $400 pw | $400 pw |
Property one- Strathpine, Qld.
This property has continued to grow since last month, increasing by roughly 10k this month. There are numerous properties in this suburb that are smashing vendors’ and real estate agents’ expectations. So I do expect to see further growth before the end of the year.
Property Two- Woodridge, Qld.
Properties within this suburb are continuing to grow slowly. I have mentioned before about renovating this property. I am currently looking ta doing this around the middle of next year. This way I will be able to manufacture my own equity despite the movement of the market. By then I do expect to see price growth which will also be a positive. The renovations will likely add a lot of demand from a rental point of view. I suspect I could obtain an additional $50 per week by doing this.
Property Three- Bethania, Qld.
This is one of the properties which has recently been refinanced. Outside of this nothing else has taken place over the course of the month. The refinance and equity cash-out does show an increase in the value of the property. This will enable me to leap from this property into another investment.
Property Four- Loganholme, Qld.
Similar to property three, this property has also recently been refinanced. The property is showing mixed sold prices in the past month. Some comparables sales have. been underwhelming while others have been above expectations. It is likely the vendors selling conditions and availability of buyers at the time determining the broader price ranges than normal.
August 2021 portfolio update: Portfolio breakdown
The portfolio has grown by approximately 10k this month. Property one was the only property that showed any change in price movement. This is not to concerning as each property saw significant price growth last month. Moving forward as we approach the end of the year I am confident to see further price growth. Running projections on the portfolio, I can these four properties hitting the 1.8m mark by themselves. Of course, no one has a crystal ball but we will see how this plays out. This obviously doesn’t include any further purchases before the end of the year.
Breaking down the numbers
The refinancing of two loans has changed my cash flow position. I have also included the additional loan amounts for these properties in my calculations. Despite these changes, we can see a greater increase in my cash flow. This is attributed to a lower interest rate than before. The split of the weight of each property within my portfolio is similar to last month.
|
The Numbers |
Change since last month | |
|
Portfolio value |
$1,700,000 | + $10,000 |
|
Loan |
$1,135,000 | + $0 |
|
LVR |
66.76% |
-0.34% |
| Rent | $1535 |
+ $0 |
| Repayments
(loans, rates, maintenance, agent fees & insurance). |
$1332 |
– $66 |
| Cash-flow (p.a) | +$3,779 |
+ $3045 |
August 2021 portfolio update: Race to $5 Million Portfolio
This month I have hit the 34% mark of my goal. With future growth and purchases, it will be interesting to see where this number ends up by the end of the year.
Portfolio growth
Month on Month change J
| Date | Portfolio ($) | Change (+/-) | notes |
| August 2021 | 1.7m | +10k | |
| July 2021 | 1.69m | +85k | |
| June 2021 | 1.605m | +30k | |
| May 2021 | 1.575m | +45k | |
| April 2021 | 1.53m | +0 | |
| March 2021 | 1.53m | +390k | IP4 bought |
| February 2021 | 1.14m | +35k | |
| January 2021 | 1.105m | +370k | IP3 bought |
| 2020 | 740k | +320k | IP2 bought |
| 2019 | 420k | +30k | |
| 2018 | 390k | IP1 bought | |
| 2017 | 50k | ||
| 2016 | 25k | ||
| 2015 | $50 | The journey begins |
Until next month. July 2021 portfolio update
Cheers,
