4 properties at 24: Why this investor believes anyone can invest in property

What made you start an investment journey at such a young age?

I’ve come from a very financial family. My dad was an accountant. My brother did the same degree as me. It’s just always been in the back of my head and doing the degree and just always having that brain on me. It’s just always been a thing.

I’ve looked to the future. I’ve lived for tomorrow, which I think is massively important. And I don’t know whether the other guys that are around my age have that same upbringing or that same sort of ideas in the back of their head. I think a lot of them are thinking about travel and different things, enjoying life, not working too hard, but at the day, I can do that in sort of 10, 20 years’ time, once I’ve worked hard now.

How did you go about purchasing properties? Talk us through the cycle of going, “Okay, I’m ready to buy again.”

The first part was, it’s just Domain. It’s as simple as going on Domain and searching for the sort of price range I’m looking at in the vague area that I’m looking to buy in. Once a property comes up in a particular suburb, I’d then go and research that suburb directly. At work, being a broker at Smartmove, we’ve got access to RP Data reports. We’ve got access to a lot of research about these different areas, so I look at the median prices in the area. I look at what’s in the area. I look at the schools, the supermarkets, the jobs, the education – everything that’s there. There’s about four or five different boxes I like to tick. I think that’s the potential, that’s the growth, that’s where it’s going to come from if people are able to live there and are able to survive there and work there, and I think there’s always going to be demand for those properties and that’s obviously going to drive the price.

What would your advice to other investors be regarding capitalising on property deals?

Look, it’s really important to see, to know, to understand the vendor’s position. If the vendor is in a position where they have to sell and the buyers there [are] a little few and far between, then you’ve got the power in that negotiation, which is really, really important. How you know that, I guess, is talking to [an] agent, looking at reports of when the property was bought. Little things like that – I feel that knowing that’s a goldmine. Knowing there’s a timeline on the other end. Having the power in negotiations is always what you’re kind of looking for. And at the end of the day, you just need to think about it from the vendor’s point of view. If you can pick it up for $10,000 or $15,000 cheaper, for them to avoid all the stress of having to worry about not making a settlement or having to worry about not selling the property at all.

As much as a vendor can plan on a buyer’s emotions, I think the buyer can play on the vendor’s emotions at the same time in that way and it’s just all about their situation. It’s a bit harder when they’re not forced to sell, they’re not in a hurry to sell, but I think in that situation, it’s really, really where some money can be made.

How do you paint the best picture of yourself to a potential lender, so they’ll give you the first mortgage, then go on and give you three more?

Unsecured debt is a real loser in terms of painting a good picture of yourself to a lender – someone who’s seen to have not a lot of saving, but a lot of credit card or a lot of personal loan debt. Lenders aren’t silly. They’re looking at that and thinking, ‘Well, hang on. How is this person going to afford a property if they’ve got all this debt and they’re not able to save any money?’ That’s a massive thing. I don’t have any credit cards, which is a big thing, and I’ve got all savings. I don’t have any personal loans. I don’t want to ever get in that situation again. I’m talking about credit cards maxed out with missed payments and personal loans with big balances on them with several different lenders. It can just paint a really bad picture, which is the opposite of what you want.

I think that’s a massive thing, especially for a younger person, because a big worry with the lenders with someone who might be 18 or 19 looking to buy their property is how are they going to afford it? Are they going to be relying on mum and dad? They’re obviously not going to have a huge employment history, so they need to see something else. They need to see something to show motivation to save and to pay a property off.

Has anything gone wrong along the way? Any sort of nightmare stories or anything that you’ve done wrong or any opportunities that you’ve missed?

You look back at properties you’ve bought and you think maybe if I had bought in a different area, I could have done a bit better on this one, and there is some very stagnant properties. It affects you in the back of your mind, but that’s the whole point of diversification. You’re not going to have every property in your portfolio moving up at the same time, so it’s really important to keep that focus and to keep that calmness about you when that does happen because it’s not a loss until you liquidate the property, until you sell it.

In terms of nightmare stories, [none] so far and I hope it really stays that way. But I’m expecting and I’m ready for it if it does happen. That’s the nature of investing, and it can happen. But if you invest well, it minimises that risk.

If we go back in time and catch yourself at 2011 when you started investing, what would you say to yourself?

I’d probably say to myself: just make sure you’re looking at everything really properly. I think the first couple [of properties], I may have just jumped in maybe a little too early, a little bit earlier than I should have.

What are your goals in investing in property?

I think the first goal is to be secure and have my family accounted for and have enough money not to be worrying about where the next pay cheque is going to come from. There’s always that push to really want to have it all and be able to put some money into things I know are good things, and put money into things I know will grow as well in terms of businesses and things. But to do that and have a base to do that, I need to have obviously built that up. Yes, it’s not the primary goal, but definitely one of them.

It’s all about, obviously, security in the future. I think it’s quite obvious that property is a long-term game. You’re not going to get in and out of property in a year or so and make millions of dollars. It’s not the way it works.

What is your advice to fellow young professionals who are looking into starting a property investment journey?

I’d always say make sure you do your research and you know what you’re signing up for. You know what you’re getting into because a bad decision can affect your ability to keep going as well. I’d always make sure that I’m doing my own research, not listening to anyone in particular. Doing your own research and being comfortable within yourself.

Everyone can do it. The deposit, I think, for the first ones is the harder part. The affordability, because we’ve got so much access to different banks, we’ve got the ability to find that solution. But I think having that money to start with is probably where a lot of people fall, but I think that just comes down to where your entry point in the market is. You don’t have to go and buy a million-dollar property first up. You can look at $200,000 or $250,000, but just look for something smart and, hopefully, that will move for you a little bit and you can run from there. You look at the history of property growth and property prices and in every area, as long as you’re investing with the key principles in terms of schools, education, jobs and you know what you’re doing there, I think there’s always a good opportunity for growth in a property. It just depends on how long you’re willing to wait and how long you’re willing to see it out.

Tune in to Mitchell Shad’s episode in The Smart Property Investment to know more about how young investors can build up wealth without having to sacrifice a lot of the pleasures in life. As they say, sometimes you can have your cake and eat it, too.

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