Networking with fellow investors led Redom Syed to discover a property investment deal with guaranteed cash flow and surprisingly strong capital growth.
“People talk about employing a team of property professionals when they’re asked for the key to their investment success. I think it’s also about getting a team of like-minded property investors around you.
Networking with other investors, primarily via online forums but also ‘on the ground’, was what led me to a Sydney investment with high rental yield and incredible capital growth.
I knew I wanted to buy a property that could be part of the now-ended National Rental Affordability Scheme (NRAS), as I wanted a portfolio geared toward strong cash flow. The problem with NRAS investments, by and large, was that much of it is rubbish stock that was overpriced and went on to create valuation issues for investors.
If you wanted to get an edge in the scheme, you needed to find an investment that was a cut above the rest of the stock – the X-factor investment. From my discussions with fellow investors, I learnt that a lot of these deals get wrapped up before they reached the market, so I knew I needed to establish a relationship with the agents involved in selling the scheme.
I got to know one of the better agents over a period of months and one day I received a message about a deal that was yet to reach the market. It seemed like one of those ‘too good to refuse’ scenarios, so I quickly arranged my finances and made the purchase.
The property is in Gregory Hills, which is in close proximity to the proposed Badgerys Creek airport. It’s a town house-style detached building, allowing for minimal maintenance requirements while avoiding any body corporate fees.
I bought the property for $360,000 and within six months of settlement it was worth $100,000 more than I’d paid for it. That’s got a lot to do with the Sydney market at the moment, but I’m in no doubt that buying a high-quality property has allowed me to better capitalise on the rapidly expanding market there.
It’s rented at $330 a week, in addition to the NRAS grant which is around $200 per week. So, in terms of net cash flow, it is around $9,000 per year cash-flow positive.
If I hadn’t spent the time chatting to like-minded people and building connections, I might have missed out on capitalising on both NRAS and Sydney’s boom. As it stands, the property was valued at $490,000 last month, and it’s become the basis of what I like to term my insurance policy – a portfolio of four, secure NRAS investments that will allow me to leverage out into riskier, development-based projects in the near future.”