How ‘boring assets’ helped this property investor succeed
Smart Property Investment’s Phil Tarrant and his team have successfully built a $6.15 million-property portfolio from scratch since August 2011 — an impressive growth that was ushered in by good foundation properties, or what the property investor likes to refer to as “boring assets”.
For over six years, Phil’s property portfolio has seen a growth rate of 85 per cent and $2.4 million in equity, and he credits most of his success to his team’s effort to provide him with correct market knowledge, which then gave him the capacity to make the best decisions and buy the right properties at the right time.
There are currently 12 properties in the investor’s portfolio located in North Saint Mary's, Mount Druitt, Ambarvale, Cambridge Park, Berkeley Vale, Mount Kuring-gai, Logan, Springfield, Glenroy, Wollongong, Port Kembla, and Kingston.
“We're keeping the pedal down. We keep buying. We keep focusing on growing this portfolio,” he said.
“We haven't bought any crazy, off-the-plan purchases within this portfolio. We're not buying a house on land packages… or mining towns.”
Despite remaining “boring” and doing their best to minimize risk, Phil and his team stuck to this strategy simply because it worked best for them.
“The most expensive property we bought was… $665,000… [and] the cheapest property that we've secured is $145,000… The yield on the [most expensive] one is one of our lowest at 5.2 per cent... [The cheapest one is] at 11 per cent,” he explained.
“Gives you a bit of an idea—these boring assets, they are the foundation of a really, really good portfolio,” he added.
A lot of investors get carried away by the idea of being “property billionaires,” so they buy multiple properties or try to dip their toes into property development too soon. However, most of those who have ultimately found success in property investment have built a good “bedrock portfolio” that provided sustainable cash flow and lending capability, as well as the potential to refinance.
Phil’s buyer’s agent Steve Waters concluded: “On one side of the coin, it's been a quick journey, but everything has been put in place and we've ticked it off—crossed the t's, dotted the i's… It's been a methodical [process]... Extremely boring, but it works.”
Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about his acquisition costs, risk mitigation, cash flow management and yearly income, as well as the inside scoop on a new property that could take the team’s investment strategy to the next level.
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