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Massive growth achieved in Northern New South Wales

This client came to Aus Property Professionals looking to expand their existing portfolio which consisted of properties in Sydney but wanted to diversify their portfolio and supercharge their equity.

The strategy for this client was to gain significant equity in a short period of time to meet their long term goal to be able to purchase their dream home.

Location: Northern NSW Coastal Town.

We were drawn to this particular eastern coastal town because we could see that the current market was undervalued with excellent potential for future growth.

The area was ideal due to:

  • Vacancy rate is below 1%
  • Average annual growth (10 year average) is above 10%
  • 10 year rental trends were on an upwards trajectory
  • Growing population
  • Competitive rental market
  • Over $300 million had been committed for hospital upgrades in the area
  • Over $350 million had been committed to improve local amenities
  • $100 million committed for infrastructure projects in the area

Land

When sourcing land, we located a sloped block in the Northern NSW coastal town.
This sloped block had coastal water views in a quiet location, but close to amenities.
Cost of land: $400,000

Stamp duty: $13,090 (note: payable on land only)

Build
The units were 3 bedrooms 2 bathrooms, 2 parking (garage) each.

The units both had high specifications including 2.7m high ceilings, floor to ceiling tiles in bathrooms, 40mm benchtops as well as 900mm appliances in the Kitchen. There were water views from most rooms in then units.
The build cost was $800,000 all inclusive, and total time for the build to completion was 8 months, after the DA came out of council.

Result:

The valuation of the units at end of build was $1.1 million per unit. This was a $2.2 million total. They are currently renting for $880 per week per unit – total per week $1 760 per week.

Summary of project:

Costs:

Land $400,000
Stamp duty on land $13,090
Build $800,000
Total: $1,213,090
Revaluation $2,200,000

 

Equity gain on completion: $986,910

Current rental yield: 7.5%

What’s next?

The client is currently re-financing the equity in this project so they can repeat the process.

Exit Strategy- in about 5 years time they will sell the units and one of his Sydney apartments to be able to buy their dream home.

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