4 Incomes From 2 Properties
Today we do a walkthrough where a client was able to pick up 2 adjoining pieces of land and build 2 almost identical dual occupancy properties, giving them 4 incomes and a strong financial freedom foundation.
0:00 – Intorduction
0:38 – Client’s story and the financial goals behind these properties
3:22 – Off street parking for each property
4:04 – Front entrances to each property
4:37 – Single car garage with laundry space
4:59 – Main hallway, bathroom and the 2 smaller bedrooms
6:13 – The master bedroom with walk in robe and ensuite
7:46 – Kitchen and living area
8:20 – Alfresco and back yard
9:20 – How does it work between the 2 different tenants
9:57 – Both properties have exactly the same layout
11:00 – Walking through the 45-sqm 1 bedroom granny flat
11:35 – Small dining and lounge area
12:15 – Who is going to live in these 1 bedders and do you get a high quality tenant?
14:43 – Bathroom and main bedroom
15:00 – These types of dwellings are very desirable in the right area
17:22 – This client has done the 2 properties to financial freedom strategy and set himself up even in a turbulent market
19:15 – Buying your own home whilst investing for your future
The Property Details:
Total Cost: $546,000
Estimated Rental Income: $670/week ($400/week + $270/week)
Total Cost: $555,000
Estimated Rental Income: $670/week ($400/week + $270/week)
Today, we have a very exciting opportunity for you. That is quite a rare find where a client was able to pick up two adjoining pieces of land and has built to jewel occupancy properties. So we’re talking about the two probably to financial freedom strategy. This client was able to do it in just one here doing two brand new properties, each with a three bedroom and a one bedroom. So for incomes from the one property, we’re going to walk through them. But before we do, we’re just going to talk a bit about the numbers. So Hey, I’m Ryan from on property, helping you achieve financial freedom. Today I’m joined by buyers agent Ben Everingham from pumped on property. So Ben, talk us through a little bit about these properties. How did you find, uh, what was the client after? What are the figures, et Cetera?
Yeah, so this is a client of ours from Melbourne. He works in it as an it consultant and he was effectively looking for one low maintenance property. The reason they engaged us was he had a huge tax problem, um, which isn’t really a problem. And he bang a lot of tax. It means you’re making some money, but hey, the reason we’ve sort of gone for brand new opening existing home is he did want some of that depreciation and tax credits brought into his income, but he still also wanted a property that was walking distance to the beaches. Ryan might be able to show you the water is just down the road and let’s have a look. Let’s see if we can see it’s a distant from here. It’s a distant view, but you can’t actually see the water in the background down the 400 meters down the road there and quite a nice outlook.
Um, as you can see, the home next door has just been lifted so that it can get water views and they’ll probably feel that thing underneath. Now, the brand new hope property, capital those up. So we’re in an up and coming area. This one. Yeah. And, um, you know, what we were able to do is find both of these pieces of land, um, completely off market, um, at what we thought were good prices. So I think we paid 306 grand for one of them and then the client decided he wanted to do a second property a couple of months later and we got the other piece of land for 315 and then he’s actually built well below market value. So he was able to build each two days, brand new Julian can properties for $240,000 age, um, which to put it into perspective is about a 20 to 25 grand saving on market value for each of them as well. So he’s picked up a little bit of equity on the way in. He’s got a very low maintenance property. He’s in a good area with longterm potential for growth. Um, and he’s obviously getting solid cash flow. So what were we just working at the total figures where I think it was about six, six 70 total per property in terms of the rental income. So there’s a three bedroom side which would rent for 400 bucks away. And then a one bedroom side which will likely run for around that too,
70 mark. And so as we walked through, these are smaller blocks. Then you would often see a dual income property on. So it’s a really exciting thing to show you because
what are they, 400 square meters approximately say 400 square meters, 405 square meters. So this sort of what you can create on, you know, something that’s 400 meters with a 10 meter wide frontage. So not huge blocks. And as you’ll see as we walk through it, we will do a future video where we do a walkthrough of a much larger dual occupancy property and show you we able to see the numbers as well as the difference in that. Well let’s go ahead and walk into, we’ll start with a three bedroom side, which has a front of the property here. So in terms of parking or the dual occupancy property is a just the front of the house, get the parking and a one bedroom one has to walk on the street. What you can see from here is that you’ve got one page, one car combination for each of them.
So on the righthand side there you’ve got the car park, which is Christ garage for the three bedroom home and then you’ve actually got this week just at the moment, looks like a bit of a Pergola to obtain, but really in reality I’m the client. We’ll put a piece of metal over the top of that and that will become a separate carport. The one better as well. So they’ve each got one piece of car combination. Nice wide traits here anyway, which other cars can park on the street. Okay, let’s go in. So I will just say out the front here, this is the front entrance for the three bedroom side of the house. We will go through the one bedroom side, but it is just down the side there. So little side access into their front door down there. Let’s head on into the three bedroom property.
Yeah. This is literally brand new, like when the first people through it, it hasn’t had an open home. It has just been handed over by the builder. There’s probably a couple of days. Thanks still. But this was literally finished like in the last day. You’re the first people checking it out, which is kind of exciting. Yeah, that’s really cool. So start here, we can see the one car garage, one car garage with a little laundry just in the garage tucked away. They’re rape, the little washing machine as well because it’s a smaller block in a smaller property. We’re trying to utilize space in a more efficient way. What I do in Sydney,
then as we walked through the hallway here, we have linen press. It is storage and then walk through the property. It’s all just a very long hallway down to the main kitchen and lounge room down there. But what we have here is we have the main bathroom of the property. So you’ve got to separate toilet. We have a um, a bath in there as well as shell and everything that you need. And then here we have one of the bedrooms as well with Builtin road. So with the new build properties you will find that basically every bedroom is going to have built in rogue’s which people absolutely love Nancy
to note that when you’re actually building one of these properties, you really want the bedrooms to be at least three by three minimum or maybe even 3.3 by 3.3 just because if it’s any smaller than that, when you creating a brand new product, you cannot lose some rental perspective. You can also lose some of the owner occupier appeal in the future if you want to raise sell it.
Yeah. And so then we have our second bedroom. Here she is again, is that a three by three?
Oh that would be 3.2 maybe 3.3 by three. So it’s slightly larger than usual and even that feels quite contained. Yeah.
And then we go here into the final room, which is the master bedroom. Again, something extravagant here. We’ve got a small block size and so we don’t have a lot of room to build multiple properties. But in terms of this master bedroom, the bedroom itself is not huge. Okay. So you can’t fit a queen. You could probably fit a king bed in here, but not a lot else in terms of rooms. Because when I look for a property to rent I’m often like, okay, can I fit my office in my bedroom as well? And so that’s how I know the size of bedrooms. But we do have a walking road, which is obviously a very desirable aspect as well as an on suite here with the shower, the vanity and the toilet. So
yeah, the constrain you the site like pcs, you can legally, and we do up to 50% site coverage, which effectively means if you’ve got a 400 square meter block, we could only build a house and the granny flat on 200 square meters of it. So that’s why, you know, it’s taken a long time, five years of chipping and changing this plan to get it perfect for what we can create on this block. But the reality is if you’ve got a bigger blog, then you can have bigger bedrooms, slightly bigger living spaces, bigger ALFRESCO’s. Um, but I think this product perfectly suits the modern tenant, which as you’ll see in a moment, there’s a nice big living kitchen, dining al fresco and backyard, which still allows people to live the life they want to leave.
Okay. So yeah, so it’s not extravagant in the big houses that you would see, but as Ben was saying, very small block size. So you’ve got to make the most of it. So here we are in the kitchen space right here as well as uh, the living area as well. So enough room for a couch and TV might struggle to fill the dining table in here somewhere.
Yeah, you’re not going to fit a dining table in here or it’s going to be in the corner, which is why you’ve kind of got your nice and Alfresco at the side there where you can put some undercover dining.
So here we have a will, a fresco. Do we have keys for that? Is that luck? Success outside. Okay. So here we are, Al Fresco daunting, especially up here in Brisbane where we do have a much warmer climate, people spend a lot more time outside is going to be very important. And then also as you can see, we do actually still have a sizable backyard here. It’s nothing huge like bones property that we looked at where there was a massive backyard, but definitely still enough room to have some outside space here. And we will see in the one bedroom property that they don’t actually have any outside space. So again, of the downsides
of the smaller block size is that the second part of the dwelling doesn’t have any outside space. The one bedroom property is actually, it is up this lane way, but as you can see it’s completely private. So it’s fully blocked off. Each house is blocked off or each living area is blocked off from each other. So the person in the three bedroom side can’t access the person in the one bedroom side and vice versa. It’s very separate living. A really common question. We get all concerned from paypal, um, particularly in other parts of Australia where they’re not used to saying this product is we’ll, how does it actually work? Am I going to bump into my neighbor? Is it going to be awkward? Are they going to be disputes between tenants? And the reality is, as Ryan said, it’s more like a duplex or a townhouse or a unit, completely separated, private yards, private car accommodation, fully lockable, you know, properties so that you know, people are just completely separate then we have never had those issues as long as you’ve got the right property manager in place.
So what we’re going to do now is walk through to the one bedroom and have a look at that. I will actually been, as we walked through, is next door exactly the same to me on the same layer or is it slightly different but it’s a different internal design. Um, in terms of the colors, fittings, fixtures, and it’s obviously different facade from the street. So we thought in the client thought that this was the right design for both glocks, but we’ve made them obviously look a bit different from a straight appeal class attendant perspective. So effectively if you were to walk into next door, which is right there, it would actually be the same way out as this one, but just different colors and looks slightly identical. I, uh, you know, um, there’s a thing called the wheel and it was invented a long time ago.
And you know, smart investors don’t necessarily reinvent the wheel. I use what’s worked before and we’d actually build this design for that 10 different clients. In the past, we knew that it rented well. We knew that it ticked the boxes for tenants. We knew that it got valued well. Um, you know, what’s the point in trying to create something from scratch when you know something’s already working very, very well. Yeah. Okay. So let’s walk through the one bedroom now and as you can see, Ben walking down the side, just have a little side access part down here and it’s, you know, it’s cozy, it’s cozy and you’re 45 square meter, one bedroom, granny flat. So it’s cozy. But there’s room, there’s a coat hanger on, not a code here, clothesline, just a on the wall that folds out and still has air conditioning as well, which is obviously important up here in the hot Brisbane Summers. So let’s go in. We’re going to get a little, little cozy. You feel how cozy this is in this property. And so we walk instantly with the other one we had the whole way we have the bedrooms and the bathrooms at the front. This one you’re walking straight into the dining kitchen area. So you’ll say this is, this is the lounge area. It’s not big. And we’re not trying to pretend that it is. Now, you know, we’ve got 45 square. The play with this is
a price point. Remember the entire product was built for $240,000, you know, three bedroom plus. The one that are and it’s going to rent the seat 70 a week. So you know, in reality we’re trying to create something that’s affordable that is going to get the long term growth but as also getting great cash flow and you know, it is cozy but it’s still very, very manageable. Now a lot of people like who’s going to live in these one bedders I always had this Sydney bias, which is the smaller and the cheaper the product, the more likely I’m going to get someone on housing communities. But the reality is we get fly in fly out work. Is there any 150 to 300 grand living in these debt? Perfect. We get young couples that are moving out of home for the first time. We get young professional males and females that are looking for price point. We get um, you know, divorcees that are just moving in for some temporary accommodation that wants something simple and we get people moving in that are looking to save for their next step. So something like this for 270 bucks a week. There is nothing like it in the area. The next cheapest option would be one of the units, which are two bedroom units running for 350 bucks a week. So something like this gets literally rented. We’ve never had one taken more than a day to rent.
And the thing is as well with these properties, you do actually get high quality tenants because of the quality of the build. And because as Ben said, there’s nothing in the area. If you want something around this price range, then you’re going to be looking at something that is extremely rundown and extremely dodgy. And so that’s obviously going to attract poor tenants. But then there are people who are affluent, who do have good jobs, uh, but do just want to live in something smaller for whatever reason. And so because there’s nothing out there, they see this and they’re like, oh my gosh, this looks amazing and you just get, this is so many people to walk through it. I’m actually a minimalist and I’m addicted to time. I watch so many on youtube that this has this tiny house bill. It’s really nice. I really locking in here kitchen, uh, is compact. Yeah.
Really my last so quality, like we’re still talking that sign too. I told him s tiled splashbacks left. It’s not cheap cabinetry. It’s still good quality stuff. Like it’s still nicely taller. The floors, like it’s very low maintenance. Um, the thing I like about this type of product is someone can come in, you can clean it in 20 minutes. Like it’s such a simple place to live. You have, I like that. I think more and more people, you know, in the future we’ll be needing this up combination. I think they’re already saying 20% of households have 25% of single parent or single people households now. Yeah. Which, you know, we’re not catering for this demographic without grain product like this.
And I can imagine there’s people watching this going, well, I would live here for two 17 by the way. He gets amazing. And so as we walked through the property, we do have the bathroom here so they won’t be a ball in this property. Just a shout about it and the toilet and then threw the main bedroom as well here. Similar size to the main bedroom of the other property as you can see with a good amount of storage space in terms of the builtin wrote. So yeah, there are different stages of my life. Same with Ryan’s where you know, cause I’ve been an investor for 10 years. Um, and most of the time I was earning very low income while I was trying to do it. Um, I think with laces, parents who had a granny flat, there was literally half the size and I’ve lived in there for at least two and a half to three years out of the last 10.
Um, we ain’t been lived in there for a period with um, two of your children. Like I’ll have lived in a granny flat that was basically just this bedroom. Yeah. And it was cockroach written and we had such half the time I lost it, I think two months in that to save money. Yeah. So if I had this, it would be so sweet, you know, different stages of life, you know, not that people like Ryan and I are going to live in these satisfies now with three children, it would be out of control. But you know, I really liked the product and the fact that it’s a completely established suburb with no vacant land, maybe three pieces of land come up a year that we would actually consider buying. Um, you know, means that there’s no other brand new product in the area. So there’s always a preference for well priced, brand new product in a good area.
And that’s the thing as we talked about, there’s also no real one bedrooms in this area either. And so sometimes when you’re talking about will the property rent and you’re looking at demographics and what’s in an area and you’re gonna say, okay, well there’s not many one bedrooms in this area, is it going to run? Just because there’s not many one bedrooms doesn’t mean the demand isn’t there. And um, I think one of the guys I interviewed, Jeremy Shepherd, I think his name is, uh, who created the DSR school. He was just genius in the way he thought about it is like it just indicates what already exist in the area doesn’t necessarily indicate what the demand is in the area. And so obviously talking to rental managers in the area, you can understand whether or not a property is going to run and from our experience at tends tends to have high demand.
This particular suburb already has a bad rental vacancy rate below 1.5% which is chronically under supplied. Kenny, you, I’ve liked the fact that there’s no accommodation on real estate.com or domain for under three 50 a week, but there’s a bunch of people that are looking for a price point product, which is why, you know, we’ll open this out, we’ll have 15 to 20 groups show and seek that six applications this weekend. It’s just that type of product. So really exciting to walk through these. We might just head out again now, so obviously we’re talking two properties, two bills for incomes. Basically the two property until financial freedom strategy done. The client isn’t financially for a yet. Obviously the properties aren’t rented yet. There’ll be rented in the next week or two, but even when they are rented there’s a mortgage on these properties so it’s not financial freedom now, but eventually these properties
will pay for themselves. These properties will pay themselves off over time and you can see that having four income’s coming in. Once these properties are fully paid off, it’s going to be a pretty exciting place to be in.
Absolutely, and this is just a starting point like this was this investors, it might feel overwhelming to someone, but this was his first investment property. Like you know, he got the confidence to work with us. He bought one piece of land with the intention to build one quality home with one granny flat and then he got the confidence through that process because he was in a strong financial position and saw the opportunity grab the block next door and has written and repeated the same thing. Now, this is a guy that six months ago, nine months ago, was completely overwhelmed, freak out about the market, whether it was the right time to buy, didn’t know where to buy, what to buy. It was suffering chronic analysis paralysis from literally looking for 18 months before he found us. And it just goes to show that even the most conservative low risk investor with the right strategy in place can slowly build that confidence. Now he knows how to do this stuff himself. Next property, he can go off with that confidence and do it himself because he wants to buy a property closer to home in Melbourne and knows that, you know, maybe by the end of 2019 or 20 the market might be a bit riper for him to be able to start looking at that option himself. And that’s cool. That’s what it’s about, right? It’s, yeah, education plus outcome, not just an outcome.
And that’s the thing. The property in Melbourne, maybe his own home or maybe investment property. And so a lot of people will do that as though we’ll do the two property strategy and then buy their own home or crystal. Uh, your sister who works for pumped on property, one of the buyers agents, they’re bought her own home first, actually turned that into Julie income. So lives at the top, rents on the bottom and then purchase two investment properties after that. And so you can kind of take this strategy and apply it as you will and then it can also help you to purchase your own home as well. So it’s pretty exciting as well being a turbulent time in the Australian property market, having new build properties and for this client being a high income earner, getting the depreciation, which is going to help with cash flow.
Again, you’re looking at properties that are basically going to take care of themselves. So as we go through this turbulent time in the market, even if the market, you know, does stay rocky or does go sideways or it goes down a little bit, you’ve got the positive cash flow coming in. So it’s not difficult to hold this property. And this is a longterm play. So that’s really important when investing to know your strategy. If you are going to be purchasing property to flip it and to get you know that incident capital growth and make a big chunk of cash, then maybe this wouldn’t be the best investment but long term investing in a good solid area on not far from the city as we saw water, water just down there and so the longterm investment in the cashflow made sense. So this is something that you’re interested in.
Obviously two blocks next to each other in a suburb that is established is super rare. You probably not going to find that. Again, I’d be surprised if you find that again in the next couple of years. But something like this, a small jewelry is definitely something that’s achievable or you can buy an existing property and build a granny flat like Berwyn’s one that we did a walk through art. So I’ll link up to Berlin’s one down below. If this is something that you’re interested in implementing. Then Ben and the team over at pumped on property are offering free strategy sessions. So you can get on the phone to them, talk about your situation, where you’re at, what you’re trying to achieve in your property investment journey, and they can help you design a strategy which you can then go out and implement yourself or you can actually hire them to help you do it. Whatever you do is completely up to you, but that session is complimentary. So go to on property.com that you fold sash session, uh, and you can book a time in the calendar over there that suits you and event or Simon would love to get on the phone and to help you achieve success. Um, so go ahead, check that out on property.com.eu faults our session. Super exciting to see this rare opportunity. Can’t wait to see what you do until next time. Stay positive.