Capital growth of $175K in 2 years, A new investor on board, and the search begins for our next property!
Its hard to motivate writing a blog when not too much is happening. Thankfully a lot has happened in the last couple of months to get my butt into gear and update the journey.
For the most part everything has been running smoothly. All properties have been tenanted. We had a few weeks of vacancies in 2 of the Wellington
properties, but apart from that all has been well, the investments have been doing what they should do, which is - pay for themselves.
However! We’ve recently been given a boost to our investment journey and confirmation we are on the right track. We had been resigned to the fact that generally you need to wait for a property cycle before expecting any major gains. And that without money for another deposit we had to sit tight. Obviously we didn’t want to wait… Like Gen Y we want it now.. NOW!
Up until recently we hadn’t thought about adding someone to our investing partnership, but we found someone who was keen to get involved and saw the potential in what we were doing. This person not only had the funds to invest (the same as we started with - 30K), but MOST importantly they were willing to commit! Not a talker… a DOER! The number of people I talk to about property investing that have the potential to invest, but simply don’t or won’t. Whether its fear of taking a risk, misinformation or more likely information overload!
The way we saw it:
Benefits to us (Dad and I):
- We now have a deposit for a new property - lets go shopping!
- Our borrowing capacity increases - great for now and in the long term
- We have a fresh set of eyes and energy to help search for new properties and opportunities
Benefits to the investor:
- They buy into a 1/3rd share of 5 x existing properties, and a 1/3rd share of existing equity growth (hence making money simply by joining)
- Gaining knowledge and experience that we’ve learnt along the way
- We have proven successful results
Bringing the new investor on board, meant we had to get all our finances and documentation together so they could be independently checked by a lawyer. Peace of mind for all involved. So part of this was having the properties revalued. What happened next was simply amazing and recognition we were on the right path - significant growth in 2 of the properties - Our Kempsey property in 2 years had increased from $175K to $240K (37% growth) and Ettalong Beach, a rise from $305 to $415 in 18months, an increase of $110K, thats another 36%! In total, an increase of $175K!! Try getting that sort of return in a Bank!
At this point, its fair to say the increased gains and bringing on a new investor, meant sharing those gains was a little harder to deal with, but in the longer term we see it as a really positive step forward, in terms of opening up more opportunities in the future. In any case it was a no brainer for the lawyer and we are now 3 on the journey!
In anticipation of the new injection of funds, naturally we were keen to start spending! There’s a few areas we’d been researching and had identified with lots of potential. These areas had properties with great returns and solid potential for capital growth. We narrowed our areas - The Central Coast of Sydney and Brisbane. I’m excited to say we've just put an offer in on a property in one of these areas! I’ll let you know where and why in the next blog:)
Can you afford to buy in this suburb? Find out how much you can borrow
A professional photographer and now avid renovator, Duane has made fast work of starting small. His first purchases were nicknamed ‘El Cheapo’ and ‘El Dumpo’, but he’s moved on to bigger projects as he and his father/investment partner explore joint venture and development projects. From his home base in Sydney’s Maroubra, he splits his time between eyeing photos and property deals.
You can also read our profile of Duane here.
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