Secrets to building a $12-million portfolio: Lloyd Edge
Investor Lloyd Edge has successfully built an 18-strong property portfolio with assets spread across three states, now v...
Looking at both a tenant's and my end of the portfolio, it’s important to keep both ends of things simple and realistic, and here’s why.
It’s still on $650,000. That’s a lot of money, right, and people say affordable, but a lot of them say unaffordable.
At the end of the day, we say the affordable areas, but we’re saying, these are the areas that your average Australian family will be buying property now, and definitely into the future. For me, it’s the great places to be.
There’s going to be greater demand for these type of products, than what there is demand for, and we’re recording this looking out over Neutral Bay at the moment. There’s going to be a greater demand for those properties out in the west, than what it will be here in Neutral Bay — purely because of the number of properties, but also the ability for people to build a home, build a family, build a life in these highly attractive areas of Sydney, which are only going to get better and better.
Affordability is not just the buying price as well, or the cost of purchase. It’s also about how much it is to rent. Because not everybody is going to own property, and there are going to be people that just rent, and they might be a rent investor, for example.
I’m also happy to report that our cash position is, it’s probably 20-odd per cent improved from where we were a year prior, with the portfolio having a net growth of 39 per cent. The net result, however, is that it’s costing us in hard cold cash $46,000 a year to hold this portfolio.
We haven’t tried to paint a really nice picture here. That’s the real numbers. They’re the real numbers. Numbers are numbers, at the end of the day, and the numbers are very good.
We can all sit around here and pat ourselves on the back and so on and so forth, but it’s about what we do from here going forward. Buying the property, or actually creating the portfolio to begin with, is actually relatively simple — it’s about controlling it and giving yourself longevity.
Part of that is the cash flow, and I have talked about it before on the Smart Property Investment Show. I have talked about some of the ways that we can arrest some of the cash flow negativity, shortfall, and, more importantly, do so over the next, probably, six months.
The thing is that, during conversations with my financial team, I said to them: “Okay, let’s not do anything from here on in, let’s not touch it, let’s not do any refinancing, let’s not buy anything. Let’s just manage it well, so make sure we keep our interest rates competitive and keep our rents competitive.”
At the end of the day, it’s a good portfolio and it’s performing well.