Why this investor avoids selling properties

Instead of seeking instant equity, Mr Shearwood plans to hold his properties for years to enjoy the capital gains on his investment.

He said: “You're not going to make millions of dollars in a couple of years. I'm very much a buy and hold. I don't sell, ever. All the stuff that I've bought was specifically bought to hold forever.”

By holding his properties, the investor aims to benefit from as much capital gain as he could get from his investments.

Buy-and-hold strategy

Mr Shearwood currently holds two units and several houses in Victoria, New South Wales and Queensland, all bought from 2004 to the current year.

His first property is a ‘really old and terrible’ 46 square metre two-bedroom unit in Croydon Park in Sydney, which he bought for $185,000. The property gets good rent, achieves great growth and was ultimately a great starter for the investor.

Since then, he has been using the equity of his properties to keep growing his portfolio.
“I just used the equity of the properties and just went on because that gave me good growth. I was able to buy another one in Penshurst then I just kept on going interstate,” the investor said.

However, before building the successful portfolio that he has today, he had to learn an investment lesson the hard way back in 1991 to 1994, when he was working as a real estate agent in Perth.

Mr Shearwood bought a unit in Bicton for $30,000. Not long after, it experienced good growth. During that time, the then-budding investor had limited knowledge about property investment. Halfway through the property boom, he sold it for $74,000.

“If I had of kept it now, at the height of the boom in Perth, it would have been worth about $300,000. You make mistakes, you know?” he said.

From then on, he vowed to stick with a buy-and-hold strategy—buy positively geared properties and hold them for as long as its making him money.

According to him: “As soon as you sell, you miss out on the capital gains that you're going to get going forward. I don't sell. I don't really care if it’s going up or down. I know that it's going to go up, so I just stay in there.”

“I just don't believe in selling. If you buy it and you do stuff to it, just keep it. Everything that I buy is positive because we're not in it to lose money but to make money. If it's making money and it's looking after itself, then just keep it. That's my thing,” Mr Shearwood highlighted.

Good luck and hard work 

While some people may attribute Mr Shearwood’s success to ‘good luck’, the investor believes that the fruits he’s reaping now are results of hard work and strategic planning.

In fact, most of his decisions have been met with raised eyebrows and variations of ‘Are you seriously buying that?’ but the investor said that he always knew what he’s buying.

The investor said: “It was a strategic plan and I had to work out how to do it. I found out that 80 per cent of people that actually get into property only own one property. It's scary—you can't retire on one property, so I needed to work out ways that I could generate more income and craft a faster exit strategy.”

Throughout his investment journey, he has bought five properties in Nhill, a country town in Victoria with only around 2,200 residents. At first glance, the odds didn’t look good, but Mr Shearwood knew that it takes more than one glance to understand the property market.

“Not much happens there, but you know what? The economy is absolutely amazing. The unemployment level is two per cent where the national is 5.5 per cent. The growth has been incredible for that. I knew what I was doing,” he highlighted.

His advice for budding investors: Educate yourself and learn how to think outside the box. The perfect property is not always what most people are chasing, in the same way that an area that everybody loves will not always provide a good investment for you.

After all, no one investment journey is ever the same. The road to success is not something you find and follow but something you build on your own.

According to the investor, there is always going to be an opportunity in the Australian property market for people who know exactly what they are looking for.

Mr Shearwood said: “You need to get into the game somewhere and make sure your money's working for you. Property's a great enabler if you invest well.”

“Read the magazines, go to the seminars then research to develop your strategy. Everyone's strategy is different because everybody has different incomes and different lifestyles. It just depends on what you want, what's better for you. You have to work out a plan.

“Is it a good time to be investing in property? If you're ready, you can afford it and you understand the challenging environment that we are operating within, then yes it is,” he concluded.

Tune in to Mark Shearwood's episode on The Smart Property Investment Show to know more about succeeding in unpredictable property markets across Australia's capital cities.

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