Hey, there. My name’s Ben Everingham and I’m the director here at Pumped On Property and today I’m going to share some examples of some recent properties that we’ve bought for some of our clients.
Hi, my name’s Ben Everingham and I’m the director here at Pumped On Property and today I wanted to share some of the examples of some properties that I’ve helped our clients buy over the last 12 months. This is the first time we’ve really done this and took a bit of a peep behind the scenes, but I sort of thought some of our clients have been getting some amazing results at the moment. Sometimes it’s great to understand what’s available in the marketplace if you want to do it on your own or if you did want to use a buyer’s agent, what types of results you could assume to get from working with the right partner.
The first example is a house that we recently bought in a suburb on the northwestern side of Brisbane. This is a suburb close to the CBD, I think this property was 11 kilometres from the CBD. It was in a well-located area with great schools. Homely.com gives it a 9.2 out of 10 star rating. The average income of the suburb according to the 2011 census data is well over $2000 a week. 81% of people that live in the suburb are owner-occupied so it’s a very, very high quality, affluent suburb in Brisbane. We bought a four bedroom, two bathroom, two garage property. It was an on-market listing, but it was being sold by an out of area agent that really didn’t know what was selling at what price. We picked this property up for $485 thousand. It’s just about … or it’s just going through settlement and we’re advertising this property for $450 per week rent. Considering it’s that close to the CBD, that’s quite a decent rental yield for Brisbane.
It was on great size block of land, over 600 square metre piece of land and residents predict this particular suburb to grow by six percent per annum for the next eight years, which may or may not be achievable, but that’s their prediction. We bought this place for 485 thousand. We’re going to rent it for $450 a week. What was great about this property is that it’s liveable with some renovation potential and we know for a fact that if we were to give this property a tiny bit of love, maybe a $20 thousand cosmetic renovation, the property in any day of the week would sell for $550 thousand immediately. That’s about a $45 thousand equity gain for our client on the day they picked up the property.
That’s just an example of something close to the city where you can add a little bit of value to the property that’s going to get you a gain if you’re putting down a 15 or 20% deposit. In today’s interest rates, it would pretty much be neutrally geared before tax, which is a great thing. That’s an option of what’s available right now in the Brisbane market. That client’s from Sidney and she was very, very happy with that purchase, obviously, making a lot more than she expected to from paying us for our service.
The second example I wanted to share was purchased recently for one of the senior executives in a very, very high profile international company with headquarters in Australia or Asia-Pacific headquarters in Australia, should I say. This client was a Sydney investor. He’d done very, very well out of his northern beaches property and decided that he would like a very, very high quality property in the Brisbane marketplace close to the city. We picked the suburb for him after sitting down with him and understanding what it is that he would like to achieve and educated him on his options. He hand-selected a suburb that we thought, after looking at about 30 key performance indicators, represents great value. One of those indicators was the projected capital growth rates again from a Residex report. In his suburb, Residex estimates an eight percent average annual price growth rate over the next eight years. Very, very nice suburb.
There’s two types of products in the suburb. There’s the very old, very average un-renovated product which sells around the 600 K mark and then there’s the much more premium, either brand-new, knockdown rebuild or very, very well renovated property which is selling around abouts the high $900, $1000 mark to a million dollar mark. We picked up a four bedroom, three bathroom absolutely beautifully restored Queenslander for $865 thousand. The property rented within one day of taking it to market for $800 per week. We’ve actually just seen a sale so this property literally settled a couple of weeks ago. We’ve seen a similar sale of a four bedroom, two bathroom slightly renovated older home in a street literally 150 metres as the crow flies from his property, street for street, lot for lot comparisons, very, very much the same, very much the premium pocket of the suburb and this property actually sold for $980 thousand.
That’s a pretty decent chunk of equity. Probably over $100 thousand that he’s made by just timing the right market, the right suburb and the right product type at the right time. We were very, very happy with that purchase. It actually was due to go to auction, but we knew the seller was very motivated, as was the agent. We negotiated pre-auction and that was probably a big mistake for this client. Not for our client, but for the person selling the property’s client. Unfortunately, they probably lost out on a really decent chunk of money but that’s what our client was paying us for and that’s the result that we got him.
I wanted to share another slightly different, less expensive option that we bought for another client recently. This was actually a family and they had basically set up a family trust and they were looking to invest in property together over the next 15 years. They came to us saying they wanted capital growth, they wanted cash flow and they wanted something that they could add value to. For anyone that follows my videos, you know that I love cash flow, capital growth and the ability to add value to property. I thought it was an interesting example to share.
This property was on the north side of Brisbane in an up-and-coming beachside suburb. This property was literally less than 600 metres walking distance to the water and it was a double story, three bedroom, two bathroom home that was completely liveable right now. We’ve literally got a tenant into the property for … He was paying $400 a week rent. The property cost $460 thousand and it was a really nice big piece of land in a great little suburb. Again, with predicted price growth of over seven percent per annum for the next eight years. What we did with this property literally the day that we bought it, we brought in our local granny flat provider. We’ve worked with a number of, actually four granny flat providers in the Brisbane market and have narrowed it down to one that gets quality and that gets value and that can deliver the right product at the right price.
For $110 thousand this family built a granny flat which I actually personally opened up last weekend and went and saw. It was the first weekend it was available and I got three applications for $300 a week on that day. They bought the house for $460 grand, they had the $110 thousand granny flat for a total spend of $570 thousand. They’re now getting $400 a week for the home, which they’re going to renovate later in the year, which will increase the yield to at least 450 to 460 a week and then they’re getting $300 from the granny flat giving them a total return on their investment at the moment of $700 on a $570 thousand spend.
Once they, obviously, add some value to the home through the renovation, I’ll assume there’ll be a capital uplift there because it’s in a great location. A great street close to the water. Probably another 50 bucks a week in rent at least so another really solid outcome for those guys. It was actually legal height underneath and it had been slightly built in, but the plan is to add another bedroom and an en suite downstairs and create another living rumpus room down there to make it very, very liveable for the ultimate family who will rent that property from them.
These are three examples of existing properties we’ve recently done. All of them have their pros and cons, but all of them the overacting concept is capital growth potential, strong rental yields or rental returns. Two of the examples there, the first one that I shared and the third one, just then, great cash flow opportunities as well. I’m sorry. Great manufactured growth opportunities as well through cosmetic renovations or adding bedrooms and bathrooms.
The last example I wanted to share was a property that I’ve helped a client do very recently. There’s a particular part of North Brisbane, close to the city, directly on the water at the moment where there’s a very boutique small development. In fact, one street being traded at the moment. I was lucky enough to know the developer and also know some very, very good builders up here that build things for me more affordably. Because we don’t take ridiculous commissions like a lot of the people selling that product, it’s actually ended up making our clients a lot of money.
The option was basically we picked up a 400 square metre piece of land. We then helped the client build a three bedroom, two bathroom, one car garage home with a one bedroom, one bathroom, one car garage granny flat in the back. The total cost of the land plus the build turnkey was $470 thousand and we’ve actually just got the first tenants in there for $565 a week, combined between the two. Again, another well over six percent return plus great depreciation, plus the suburb again is predicted to grow by eight percent per year for the next eight years.
Because it’s a construction site, at the moment, I think the rental yield is far lower than where it should be and once the street’s completed we estimate upwards of $580 to $620 a week return from that combined dwelling. That’s more in line with market value in the suburb but, obviously, not everyone wants to live in a construction site. What’s also cool about this option is that we picked it up for $470 thousand but the same builders and developers have been selling it to mums and dads all through marketers through Sydney, Perth, and Melbourne to people for between $510 and $550 thousand. There was a good little chunk of equity on the way in which goes back to this concept of great quality property in good locations that can get capital growth, that gets above average cash flow returns where you can even manufacture some value on the way in or you just bloody buy well and you save a bit of money.
I hope you’ve enjoyed a few of those examples. There’re four very different ones. You’ve got the well-located property with some renovation potential. The first one we talked about, close to the city in a premium area. You’ve got the really, really, really nice property very close to the city where the client’s getting a great cash flow return and made a huge amount of money on the day that they bought the property. You’ve got the home very close to the beaches with the potential to add value through a renovation to the house, but also you’ve got the granny flat in the back yard which is giving them a great return. You’ve got the brand new dual income property.
This will take you to literally over 100 properties that we’ve picked up for our clients over the last few years.
I really appreciate your time and I hope that gives you some cool ideas of what’s possible right now. Until next time, stay hungry.