Nine properties in 10 years: what’s next for this property investor?

Right now they carry around $2.1 million worth of debt and at a loan-to-value ratio of about 66 per cent they are in a reasonably comfortable place as property investors. In fact, if they sit and wait for a year or two completely out of the investment game, they are most likely going to be in a better position in the end whatever happens.

According to Geoff: “From what it's done … if I work it out [with] what the equity is over the last 10 years … [the growth rate is] about 3 per cent every year. It's not the greatest [but it’s also] not the worst.”

“I see it as ... around $100,000 a year … [and it’s only costing me $5,000 to hold the assets],” he added.

Obviously, there are risks associated with maintaining a multi-property portfolio, but fortunately for Geoff, he still holds a stable job. Moreover, he believes that there’s no greater risk than failing to give yourself more options other than work 40 hours a week for the next 40 years and live on superannuation, which will probably be insufficient.

Geoff said: “You always see, ‘Oh, the market's going to crash’ and all these sorts of things. Well … if the worst that's going to happen is we sell everything and we don't lose any money, [we’ll be fine] … If we don't do anything, we don't get anything anyway.”

Choosing the right locations

Among the suburbs where Geoff and his wife purchased properties are North Para Meadow and Blacktown in Sydney, Kingston in South Australia, Logan, Nerang, Boronia Heights, Cooomera, and Woodridge in Queensland.

According to Smart Property Investment’s Phil Tarrant, one of the reasons behind the couple’s success in property investment is the strategic locations of their assets.

Phil said: “The places where you've purchased these assets, there's always going to be a high demand for properties in those areas.”

“These [are] mortgage-built suburbs—we have a growing population in Brisbane and Sydney, and pretty heavy in Queensland,” he added.

Even though Geoff wished he took time to look into other parts of the country such as Melbourne and Adelaide, he still enjoys the advantage of investing in a limited number of areas. At the moment, he and his wife hold five properties in different parts of Logan, two in Boronia Heights, and another two in major suburbs in Australia.

The property investor said: “The advantage I had was that in Logan, I had a fair idea of what things were worth at the time, and I was confident with cash flow with tenants, and all that sort of stuff. You weigh everything up, [basically].”

Phil explained further: “The market dynamics are very similar, the people are very similar, the habits, the behaviours, the economic drivers are very, very similar. So, [Geoff is] just doing the same thing in a different market [and] it still the same outcome.”

However, Geoff reminds budding property investors that his luck in Logan may not translate similarly to other markets.

For example, their properties in Logan and Boronia Heights, which are both in Queensland, have a difference of $15,000 in terms of value.

Their properties in North Para Meadow and Blacktown, which are both in Sydney, also have the same range of difference in value.

“[At the end of the day], it's two different markets, two different demographics, and [different fundamentals],” Geoff said.

Chasing growth

As a property investor, it’s important for Geoff and his wife that they love what they are doing and they enjoy doing it so it doesn’t feel like a chore.

According to Phil, if you find the whole property investment game a hassle, then you should probably refrain from doing it or find another asset class to invest in. After all, wealth-creation is a long-term business—one needs patience and dedication to actually achieve their end goals.

While he’s currently laying low, Geoff admits that he still wants to grow their property portfolio even further in the years to come. However, instead of focusing on where to buy, he wants to dedicate his time studying what to buy.

He explained: “[I’d be looking] in terms of the type of property, in terms of something that I could have the potential of doing something to it down the track—buying something that was corner blocks [or] a few large blocks.”

“For me, it's almost like you're taking the capital growth of an area out of the picture, you know? And, obviously, there's risk factors involved in doing developments and all that sort of stuff, but I find if you're willing to put in the work for that, you're taking the capital growth out of it so you can make money,” the property investor added.

Essentially, he wants to manufacture growth regardless of what the market is doing.

According to Phil, property investors get to a point in their journey where they hold a large portfolio with instant cash flow, so they increase its yield by purchasing the right assets—this time, those with the “X factor”.

Phil said: “These last two [properties that Geoff has] bought in Boronia Heights where it gives [him] some sort of X factor to make it special in [a] point in time.”

Geoff shared further: “In saying that, there's just as much [opportunities] ... in different areas [as there is in Boronia, where] the growth draws are there [and] you can make money without doing anything.”

“Just watch the [property investment] space,” Phil concluded.

Tune in to Geoff’s episode on The Smart Property Investment Show to know more about the challenges he and his wife faced early on by rentvesting after they received a termination letter right before their baby was born and how they managed to overcome this situation and achieve their goals.