It takes an average of 8.6 years for a house buyer to save for a 20 per cent deposit on a home. But home loans are about to get more complicated and harder to find.
The result: tens of thousands are locked out of the investment and capital building potential of the property market.
But now, you can buy part of the property for as little as $22,000 and still have your name on the title, says Darren Younger, boss of property platform Bricklet.
So how do you work out the returns of buying a Bricklet over, say, a five year period?
“Think of Bricklets as slices of investment property that provide the same returns as the full property – if you owned it in full,” says Mr Younger.
If you paid $22,000 for a Bricklet in The Alfred, a holiday rental, three-bedroom apartment development in Brisbane, the expected yield is 8 per cent, he says.
“This works out to be $146 per month or $1760 per annum.
“If you hold the Bricklet for five years, the rental return would be approximately $8800. During this period, the apartment will have capital growth which is often harder to predict.”
Looking at the annual capital growth of 4.14 per cent of similar units in Fortitude Valley, Mr Younger says: “So let’s say that the capital growth is about 4 per cent per year, then the value of the Bricklet after five years will be $26,766 working on a capital growth of $4766.
“This means that the total expected return over five years in The Alfred will be $8800 plus $4766 which equals to $13,566.
“This means as a percentage, the return on investment is 61.7 per cent ROI or 12.34 per cent per annum,” Mr Younger says.
So if you want to take advantage of the capital and rental growth of your investment by selling your Bricklet, all you have to do is to log onto your Bricklet account and place it on the platform for sale.
Since launching last year, the company has sold over $15 million worth of Bricklets.
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