Hello and welcome to my October 2021 portfolio update. If you want to check out my portfolio update from last month click here.
Portfolio update
October was another massive month for the portfolio as numerous things took place within the last 4 odd weeks. Firstly, IP5 settled and the tenancy was renegotiated. Each property has seen some level of growth as the Brisbane and Adelaide market continues to soar. However, the most interesting and exciting news is that I was able to purchase IP6! That’s right, I went to auction within the last couple of weeks and was successful. This means I have now been able to purchase in back-to-back months.
Market update
A similar theme this month continues as we continue to see price growth across the country. Both detached dwellings and units have all seen an increase when looking at the rolling month change. There are some properties with declines in the weekly change, however, this data set would be easier influenced my some weeks to have fewer sales or lower weekly sales.
Over the past 12 months, Sydney houses have recorded almost a 25% increase from their already high prices. When the steam will come out of this market who knows but affordability is breaking new records for this major city. In the past month, Brisbane has seen an outstanding 4.9% price increase. This is something you would expect to see over a year in a settled market so within a month is phenomenal. We are likely seeing the effects of the numerous government stimuli which were used to stimulate the economy during Covid. The government did announce changes to lending restrictions within recent weeks, however, this is likely to only impact around 5% of one borrowing capacity. Will this suppress this boom? it may make a dent but it may not make as much of a difference given the steam still left in the market.
October 2021 portfolio update: Property breakdown
This month’s prices across the portfolio have been quite similar to last month. I suspect as we come closer to the end of the year we may see greater price growth across the board, to what extend? Only time will tell. Property one continues to soar while I also picked up IP5 this month by expanding my portfolio to a 2nd state being South Australia. I am glad to have got the next property under my belt but I still have ambitions to purchase IP6 before the end of the year. So I am sure there will be a few more updates to come before the end of the year.
The Numbers
| Strathpine, Qld. | Woodridge, Qld. | Bethania, Qld. | Loganholme, Qld. | Christie Downs, SA. | Parafield Gardens, SA | |
|
Purchase price |
$390k | $250k | $317k | $331k | $415k | $418k |
|
Current value |
$580k | $400k | $430k | .$420k | ,$420k | a$420k |
| Loan | $395k | $255k | $295k | $300k | $365k |
$370k |
| Rent | $410 pw | $335 pw | $400 pw | $400 pw | $390 pw |
$400 pw (expected |
Property one- Strathpine, Qld.
Again this property continues to grow as we come towards the end of the year. From looking at past sales many similar properties are now selling just shy of 600k. I suspect this property would likely be valued around the 580k mark. However, over the next couple of months, I am extremely confident we will see a 600k valuation. From a rental point of view, we now have new tenants in the property paying $410 per week. The previous tenants as mentioned decided to end their lease early. Fortunately, the property is in high demand from a rental point of view and it was occupied within days of the old tenants moving out.
Property Two- Woodridge, Qld.
Fortunately, I am now seeing price movement for similar properties within close proximity to IP2. Although it is in a lower demographic area, prices from more expensive adjacent suburbs are starting to filter in this suburb. I am now seeing established houses on 600m2 blocks sell between 390-430k. High-sets properties within this area are going for even more. This is great to see as price growth has been slightly suppressed over the last few months. I suspect by the end of the year the property will be comfortably above the 400k mark. Once the renovation which is set for next year is completed it will likely see even greater growth.
Property Three- Bethania, Qld.
It is hard to determine the value of this property will fewer comparables sales available on market. Moreover, some run-down properties are selling in the high 300’s while other renovated properties can go around 500k. With this, I do expect the property’s valuation is around the 430k mark. However, over the coming months if we continue to see more comparable sales we may be able to determine a more accurate valuation for this property.
Property Four- Loganholme, Qld.
Again we can see some growth from this property over the past month. Similar properties that are newer with an additional bathroom can be seen to sell for high 400’s. While the lowest sale was high 300’s for a slightly run-down property. With this, I expect this property to be valued around the 420k mark.
Property Five- Christie Downs, SA.
This property has now been settled. This is great news and a great addition to the portfolio. The property, as discussed last month has a lot going for it with value add potential. Now that it is settled, I have been able to sort out the tenancy. The current tenant was on a periodic lease paying $280 per week (well below the market rate). Given the movement of the market, the tenants agreed to a $390 per week rate, an increase of $110 per week! This is a great result and is what my expectation was for the property despite being rented well below this. This instantly improves my cash flow position and greater justifies the 415 purchase price with a $390 per week rental.
Property Six- Parafield Gardens, SA.
I have been straight back into the market for my next investment and have been successful very quickly. I went to auction for this property last week and was able to pick up the property for 418k. It is 3/1/1 and 20km from the city on a 610m2 block. The expected rental return is probably just shy of $400 per week. I like this property because of its locality, demand for the are,a and potential with the block. The block can be subdivided further down the track into two 300m2 blocks where I could build two new houses. The 20m frontage and block size perfectly cater to this. Moreover, current new properties on smaller blocks are selling for 450-500k so I could already break even or make money if I did this now. However, I am happy to sit on the current property for a while as it too is in solid condition. 
October 2021 portfolio update: Portfolio breakdown
With the back-to-back purchase of IP6 and the strong market conditions, the portfolio continues to soar. I comfortably surpass the 50% mark of my 5 Million dollar goal and am now over halfway there.
Breaking down the numbers
For the breakdown of this month’s numbers below, I have not added the IP6 and the income/expenses as the property is yet to settle.
|
The Numbers |
Change since last month | |
|
Portfolio value |
$2,670,000 | + $515,000 |
|
Loan |
$1,970,000 | + $420,000 |
|
LVR |
73.8% |
+1.9% |
| Rent (per week) | $1935 |
+ 400$ |
| Repayments (per week)
(loans, rates, maintenance, agent fees & insurance). |
$1660 |
+ $0 |
| Cash-flow (p.a) | +$6,250 |
+ $0 |
October 2021 portfolio update: Race to $5 Million Portfolio
This month I have hit the 53% mark of my goal. With future growth and purchases, it will be interesting to see where this number ends up by the end of the year.
Portfolio growth
Month on Month change J
| Date | Portfolio ($) | Change (+/-) | notes |
| October 2021 | 2.67m | +515k | IP6 bought |
| September 2021 | 2.155m | +455k | IP5 bought |
| 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,
