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$70,000 GROWTH IN 5 MONTHS

Usually too good to be true. Two Solvere clients purchased in Brisbane back in April 2016 and now comparable AND real like for like sales have seen a $70,000 increase in their property. That equates to around $14K per month

As a seasoned property investor, I am always saying to my clients to aim to get their 10% deposit back out of their property purchase within 1-3 yrs of purchasing.

So how does this happen?

  • Buying in a great location primed for capital growth, as in the case of the above Solvere clients
  • Buying the right type of property that is both appealing to future buyers and current tenants
  • Buying in at the right time of the property cycle for that suburb/town
  • Not paying too much for the property in relation to size and quality of structure.  If apartment or unit this does not apply but if buying house with land, also ensuring you are not paying too much for both.
  • Add value to the property through renovation, new construction or subdivision

The purchase example above looks like this

Purchase price – $620,000   Deposit – 10% or $62K plus costs (stamp duty, legals, LMI)

So the aim is to extract the $62K deposit back out through equity within the 1-3 yrs.

For the savvy investor, if you can do this you have the ability to buy up to 7-8 properties within 10yrs.

For the more conservative investor, it might mean simply buying 1 property every 3 yrs (or 3 in 10yrs)

These clients will now be able to extract their 10% deposit back out within 6mths. 

An unbelievable result!!!

So what do we do with this $62K?

What does the unsophisticated do with this?  They sell the property emotionally seeing the gains and think they will cash in and go on a holiday or buy a new car.  They think of a thousand ways to spend this money before they have sold the property.

What does the sophisticated investor do with this?  They release the equity which then forms the deposit for their next investment property purchase – some 2 ½ years ahead of schedule.  They then purchase this in a different town/suburb that will give their property portfolio diversification and purchase the right property that relates to their future goals and current cashflow.

What investors do with their next step is the most critical part of any capital growth created and goes a long way to shaping their level of future wealth.

Any way you look at it – A good problem to have for any investor!!!

Happy Investing.

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