Hello and welcome to my September 2021 portfolio update. If you want to check out my portfolio update from last month click here.
Portfolio update
September has been a huge month for both myself and the portfolio. I was able to land property 5 a few weeks back and this will be a massive addition to my portfolio. The property was my first purchase outside of Queensland and I landed myself a cracking deal in the south of Adelaide. I will be explaining in more detail in the “property breakdown” the details of this purchase and how it impacts my overall portfolio.
In other news, I have recently launched my Buyers Agency where I am to help other investors and home buyers purchase quality property that aligns with their goals and circumstances. Property has been a passion of mine for several years now and I wish to share my knowledge with other like-minded individuals by offering my assistance with the buying process. This is something that has been in the pipeline for close to a year now but there have been numerous hurdles to jump through. Fortunately, I am now in a position to share this news and can start helping others while doing something (buying property) I am extremely passionate about. If you are interested in learning more then feel free to check out my Buyers Agency website: Property Comet.
Market update
Again we can see a consistent green in 12-month price growth across the country. Whether it be houses or units, if you were holding property within the last 12 months it is very likely you would have seen some level of capital growth. You could essentially throw a dart at a map of Australia, purchase there and see a return on your investment. However, it is still important to consider the fundamentals when purchasing a property and knowing that this level of growth is not sustainable in the longer term. Will this growth continue in the short term? I suspect to see continued strong price growth within the next few years but anything can change and so it’s important to not get caught in the fear of missing out (FOMO). Instead, make investment decisions that align with your investing goals and circumstances.
Best Performer
A key takeaway from the chart below is the vastly different level of average growth between houses and units. I personally only buy houses and would recommend this to others also. This is not to say you can’t make money on units/apartments/townhouses because you definitely can. However, houses have historically outperformed higher density dwellings and this has been reflective in the past 12 months significantly.
An interesting data point to discuss is the change in house prices in Sydney over the past month. According to the chart a whopping 5% of growth was recorded in the past month, to be completely honest this could be over-exaggerated but it suggests Sydney houses have skyrocketed since the start of the month. However, with such a high buy-in price at (1.658m) investors may choose to diversify their capital within similar markets seeing strong price growth such as the likes of a Hobart which recorded a 2.3% return in the past 30 odd days.
September 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. | |
|
Purchase price |
$390k | $250k | $317k | $331k | 415k |
|
Current value |
$570k | $350k | $410k | $410k |
415k |
| Loan | $395k | 195k | $295k | $300k |
365k |
| Rent | $410 pw | $335 pw | $400 pw | $400 pw |
$390 (expected) |
Property one- Strathpine, Qld.
This property has been flying since the start of the year. It is now likely valued at around 570k which is a phenomenal return for where it was at the start of the year (approx 420k). I suspect the property will hit the 600k mark by the end of the year, if not it will definitely get close.
In other news, the current tenants have given me notice to break their lease agreement. This may appear concerning but it actually will work to my advantage. It means that the current now previous tenants will have to pay for advertising costs, letting fees, and continue to pay the market rate ($410pw) for my property until new tenants are found. If they had chosen to leave at the end of the lease agreement it would have cost me approximately $800 to find new tenants with advertising costs and letting fees. Instead, these fees are waived and I get the benefit of an additional $10 per week. This is a great outcome for me and works out in my favor in both the short and long term.
Property Two- Woodridge, Qld.
There hasn’t been much price movement from this property over the last month. I have mentioned before that this property was bought well below market value (at the time). I recently posted an article discussing “how to buy below market”. In the article, I also outlined the pros vs cons of taking this approach. One of the downsides to taking this approach is that you can lose focus on the “fundamentals” which help promote capital growth. I believe this is the case for this property. Property prices have been suppressed in comparison to other suburbs showing greater demand and growth. However, I still think in the medium term we will see strong price growth due to the locality of the suburb and its affordability to neighboring suburbs. Despite the lack of price growth the property was still purchased at 250k and is valued at 350k today, this would equate to 40% capital growth in less than 2 years which is still quite significant.
Property Three- Bethania, Qld.
The refinance of this property has come through recently which will enable me with IP4 to have the capital to purchase IP6 in a few month’s time. The property has been relatively quiet this month with not much growth or any news taking place over the last month. It is just ticking along as expected at the moment.
Property Four- Loganholme, Qld.
Similar to property three, this property has also recently been refinanced. The valuation of this property has been harder to determine given the range of prices seen within comparable sales. Straight after purchasing there were numerous properties selling at the low 400’s. Since then there has been some above 400 but also a couple below 400. My initial expectation was to see prices around 450k by the end of the year. This may still take place but it is appearing more likely that we will see a valuation somewhere in the middle of 400-450k. This would still be a great return on a 330k purchase price within a single year.
Property Five- Christie Downs, SA.
I had been trying to sort out finance for the past few months, fortunately, within August I was able to start my search and begin looking for my next investment. This month I can reveal that I have been able to secure my next investment. I wanted to begin searching into other areas of the country and begin diversifying my portfolio across different markets. I found South Australia to show strong demand with prices still within the price range I like to purchase in.
The property I purchased ended up costing 415k. It was originally 420k but I was able to negotiate another 5k off using the building and pest inspection. The property is a 3 bed, 1 bath low set brick house on an approx 800m2 block. The property is within 2km to the beach, 500m to the train station, and has development potential. This means further down the track I may be able to build 3-4 townhouses on the block (subject to council approval). This is a handy option to have in case I wanted to do a development down the track. It will also be a key selling point should I be interested in selling later on. Overall, I think this was a solid purchase in a market that is soaring at the moment. I expect to see strong price growth within the coming months and years.
September 2021 portfolio update: Portfolio breakdown
With the purchase of IP5 the portfolio has grown by $455k. Property one was the main mover over the past month with property five adding the most value to the increase this month. As we get closer to the end of the year, my expectation would be to see the portfolio hit the 2.2m mark by the end of the year. 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 |
$2,155,000 | + $455,000 |
|
Loan |
$1,550,000 | + $215,000 |
|
LVR |
71.9% |
+5.14% |
| Rent (per week) | $1935 |
+ 400$ |
| Repayments (per week)
(loans, rates, maintenance, agent fees & insurance). |
$1660 |
+ $328 |
| Cash-flow (p.a) | +$6,250 |
+ $2,471 |
September 2021 portfolio update: Race to $5 Million Portfolio
This month I have hit the 43% mark of my goal. With future growth and purchases, it will be interesting to see where this number ends up by the end of the year.
Portfolio growth
Month on Month change J
| Date | Portfolio ($) | Change (+/-) | notes |
| 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,
