A Sydney couple, who had been priced out of upgrading their family home, have managed to create a property portfolio worth $1.2 million in the space of just three months.
Amit Kumar and his wife Astha had bought a townhouse in the Sydney suburb of Quakers Hill for $610,000 six years ago.
Despite saving hard and their family home growing in value to $780,000, the couple who have two children aged three and five, discovered Sydney’s skyrocketing property market would mean it was impossible for them to find a new property in the city.
They had discussed the idea of buying other homes but were nervous.
“It was the fear of the unknown,” Mr Kumar said. “You just don’t know what to do, you don’t want to overpay, you don’t want to buy the wrong place and then have it vacant for long periods and with no tenants,” he told news.com.au .
“You don’t know where the growth is going to be and you don’t know what the projects are in certain areas and things like that.”
But the couple met with a buyer’s agent and took the plunge in April, snapping up two properties in that month alone.
The first was in Adelaide in the southern suburb of Christie Downs, a three-bedroom, two-bathroom house.
They purchased it for $425,000 and it has already grown in value by approximately $60,000.
The second property was purchased in Toowoomba, Queensland – a three-bedroom house for $455,000, which has also jumped in value by $50,000.
“We were very nervous, particularly because they actually settled very close to each other… the settlement was two days apart,” he said.
“And also complicating things further was the Easter break and the Anzac Day long weekend happened as well, so it was all on short notice.
“I think at the time there was an election coming up, we didn’t know what the policies were going to be, we didn’t know what the interest rate was doing and how it’s going to affect us.”
But the gamble has paid off so far with Mr Kumar revealing they had 20 rental applications for the Adelaide house before the open home was even held.
“So we had a very large number of applications to actually choose from and we actually managed to get more than what we actually hoped to achieve in terms of rent,” he said.
“So when we bought the place, we were told $410 is a realistic expectation in terms of rent, but we actually ended up achieving $420.”
The Toowoomba home was already tenanted but Mr Kumar said it was at a significantly lower amount to the market rate.
They were told they would get $450 for the place, but after the previous tenant moved out, it was only empty for three days and then rented out for $470, he said.
Their latest buy has been in Bundaberg, a house for $387,000 snapped up in July, which is expected to rent out for $460.
All three properties were also bought sight unseen, Mr Kumar added, while the rents cover their mortgages.
The couple paid $65,000 to $70,000 for each place including stamp duty, using a 12 per cent “sweet spot” deposit recommended by their mortgage broker.
Mr Kumar, who works in sales, said the couple still plan to use their portfolio as a “stepping stone” to buy a bigger place in Sydney in the next 12 to 24 months, but they won’t stop there.
The 39-year-old never believed it would be possible to build a property portfolio but now the couple have a goal to buy eight to 10 properties in the next five to seven years.
He advised others to get into the property market as soon as they can, adding people shouldn’t be influenced by the market, but instead focus on the long-term goal of building value in their property.
“One of the things the buyer’s agent said to me and it’s just stuck out in my mind is that the earlier you buy, the sooner you buy, then the more time you’re allowing for capital growth and timing is not as critical as just getting into the market,” he said.
“Because if you buy the right property at the right price, timing is not such an important factor.
“All three properties that he’s bought for me, we’ve actually managed to get all of them under market value, so what it means is indirectly like even already now by the time we settle, we already have some equity.”