The strategy that built a seven property portfolio in three years

“It's been a great journey. I'm loving every minute of it. If I could leave my job and do it full-time, I definitely would. That's my goal,” she said.

Goal-setting

One of the first steps that Ms Rita took is setting a clear goal to aim for.

Initially, she thought about the big picture—how much money did she want to retire on?

From there, the investor worked backward and determined the number and the value of the properties she needed to achieve her specific financial goal, as well as the time that she’s willing to dedicate to work on it.

Ms Rita explained: "How long do we have before we retire? What did we want to retire on? We asked ourselves, ‘How many properties does that mean? What does that look like?’ At what point do we say, ‘We've now got what we need. Now we can look at how we finish on a good note’?”

“Within nine years, by 50, we want to have the option to say, ‘That's it. We choose now to work rather than we need to work’. If one of us can step away from our full-time employers, that would be great,” the investor added.

To help her crystallise her goals and form a strategy that would work best considering her capabilities and limitations as an investor, Ms Rita engaged a team of professionals to back her throughout her wealth-creation journey.

Aside from her buyer’s agent, her financial team also comprises of a mortgage broker, an accountant, financial advisors, solicitors and more.

All of these professionals worked to understand her goals as well as how she wants to achieve them.

Most importantly, they are all ‘property-oriented’, according to her.

She said: “Everyone's oriented in property. One of the things that someone told me before I started was, ‘Never take advice from someone that is not doing it’, and that's so true. I did try someone that didn't—you can really tell the difference between someone's that doing it and not doing it.”

The first purchase

Like almost every budding investor, Ms Rita started out being risk-averse, afraid to take out too much finance and affect the lifestyle of their family in the process.

According to Ms Rita: “We don't like risk. Especially considering that we have a family. We want to make sure that we’re not making the wrong decisions for the future.”

To mitigate risks as much as possible, the investor engaged her buyer’s agent for her first investment property purchased in Victoria.

The agent’s expertise did not only help her pick the right property but also supplemented her research and assisted her in doing their due diligence while she and her husband are both working long hours to sustain their flow of income.

From that point forward, Ms Rita has made it a point to engage with the right professionals to help her make the right decisions and maximise the use of her time and efforts.

Investment strategy

Following the purchase in Victoria, Ms Rita went on to buy properties in Queensland’s Leichhardt, Woodridge, Marsden and Bellmere, and in South Australia’s Joslin.

She has remained risk-averse in terms of financing, avoiding big purchase prices that might stretch her serviceability a bit too thin.

On a cash flow and long-term growth perspective, all of her properties were bought at around the same price point in areas considered as ‘affordable belts’ and ‘growth markets’, the investor said.

Essentially, while it would be ideal to strike a good balance between growth and yield in her portfolio, she intends to put more emphasis on capital growth right now in order to reap long-term benefits from her assets.

Ms Rita explained: “We have to think about the goal that we want. We're definitely looking at capital growth and not so much on the cash flow at the moment.”

“We'd like it to be positively geared as much as possible but, for us, it's all about knowing that we're going to be set up for success in the future rather than enjoying short-term success in the now,” she added.

As she keeps the same level of debt, the investor expects her properties to double in value as the markets go in a full cycle within eight to 12 years.

When she starts seeing the effects of capital growth, she also hopes to improve her cash flow position over time.

“Over a ten-year period, you'd expect your rent should be going up as well,” she highlighted.

Passion for property

After the settlement of her seventh property, Ms Rita said that she’s far from putting a stop to her wealth-creation journey.

Throughout the three years that she spent investing in real estate assets, the investor found a passion ignited in her.

Considering the good position that her portfolio is currently in, she can definitely sit on it and just hold her assets until she realises the benefits of capital growth.

However, Ms Rita still wants to keep purchasing properties and ultimately expand her asset base.

According to her: “It becomes very addictive. I just loved the process throughout the whole three years that we've been doing it.. It's a real passion. I just want to keep going. I don't want to stop.”

“We're in a good spot now where I'm comfortable that we'll get there. Now, I'm just enjoying the process and I just want to do a lot more of it. If I could leave my job today, I would.

I just like the fact that I have control, I get to make decisions and I’m master of my own domain. My goal is to own my own business. Property is where I see myself for the long-term,” the investor concluded.

Tune in to Ms Rita’s episode on The Smart Property Investment Show to know more about her three-year journey towards building an impressive seven-property portfolio.

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