How can this property investor ensure financial success through a five-property complex?
Mere months since Smart Property Investment’s Phil Tarrant bought a block of units with five “connected properties” on individual stratas and separate loans, how has the huge asset contributed to the overall growth of his portfolio?
According to the property investor, it took him and his financial team over seven years to plan and prepare for this unique purchase, which they made in the suburb of Lawnton—near the railway line of Petrie, the home of the new Sunshine Coast University.
He shared: “It's a six-minute drive from Westfield Strathpine, [a] five-minute drive for the Strathpine State School. Our rentals on these properties ... are between $270 and $275—all currently rented.”
Due to the fact that the suburbs and the areas surrounding it has plenty of infrastructure, both Phil and his buyer’s agent Steve Waters believe that it’s a good area to invest in and it will only continue to get better in the future. In fact, the 7 per cent yield on the asset is deemed a good addition to the property investor’s existing portfolio. Just recently, four of the five tenants have renewed their contracts straight away after they have come off their lease period.
“We're pretty happy with that. No real pain points at the moment," said Phil.
“It's going well," Steve added. "It's a really strong market there."
Plan of action
Despite being in a strong market, Steve advises against pushing up the price of rent, especially as Christmas season approaches.
Like many property professionals, he believes that losing around $5 worth of additional rent is way better than having a month’s worth of vacancy. After all, he says, money is coming in and there are no serious faults on all of the five properties except for minor maintenance issues like dripping taps, unorganised common areas, and unkempt lawns.
“Apart from that, I don't think there's been any really big-dollar items to spend yet. Over five properties, that's a really good headstart,” Steve said.
Right now, according to the buyer’s agent, it’s best to just sit back, relax, and let the asset work.
Being in a 'neighbourhood zone', the properties are expected to be zoned for high-density in the future as the Queensland government looks into creating more infrastructure and transport systems to accommodate the population increase. Aside from more opportunities to grow the value of the asset, Steve believes that this possibility also presents a good exit strategy.
“Not that we're even entertaining that idea at the moment, because it was bought really to give that accommodation with what's coming up in 2020, being the university, even though there's a really good balance of supply and demand there at the moment.”
“We'll take advantage of that in around 2020, 2025 depending on what the cycle's doing, of course. To have that up your sleeve is a pretty good exit strategy and it's a bonus,” he concluded.
Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about the current state of different Australian property markets and where they are headed, as well as the best suburb for your next investment property.
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