How this 26-year-old teacher is paving his way in property

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TRANSCRIPT:

Hello, everyone. Welcome to an all new episode of the Smart Property Investment Show. Unfortunately, it's not Phil Tarrant hosting today. I'm Grace Omsby. But as always, we're here to talk through all things property and share an investor story with you all. So today it comes courtesy of Simon Zamet. Simon, welcome to the Smart Property Investment Show. Hello, thanks for having me. Simon, you're based in Melbourne, right? Yep. What's it like down there at the moment? At the moment, lockdown's just starting to end, we hope. I think we have one or two more weeks left of stage four. I've just come back to work. It's kind of exciting at the moment because we can go back out, you know, go to cafes and go do a bit of shopping and whatnot, finally. So yeah, it's pretty good in Melbourne. I'm imagining, you know, it's been a pretty big emotional toll the last couple of months. Yeah, look, I'm one of the lucky ones. I feel bad kind of saying that, but I'm lucky because I've got a government job. So I've kind of been okay during this time. So I feel more for the hospitality workers. I've been a hospitality worker myself. So I feel bad for them and anyone that's out of a job at the moment. When I say that I've been okay, obviously being in a government job. So, look, I've got a lot of friends that aren't feeling too good. Yeah, I guess what can I say? It's okay at the moment for me. And what is your job? I'm a primary school teacher. Okay, so you would have been working from home for a while then? Yeah, I was working from home, which was like a bit of good, a bit of bad. Good being, look, 38 hours a week with kids face to face is hard enough as it is. So being at home, it's a bit easier in that sense. But then there's a lot more planning in terms of obviously you guys know, online, like just like podcasting, there's a lot of meetings with the kids and difficulties with the internet. And it's just a lot of new problems that come up when you're teaching remotely. But it was okay. It was a bit of fun. I was gonna say you would be very used to Zoom meetings by now. Yeah, I'm totally used to them. Zoom, Webex, all of them. I've been having to learn how to use all of them.

Before we do dive into your investment property journey, because that's obviously what you do do on the side. When would you say you first expressed an interest in property investment, in buying real estate? I guess property was since like, for as long as I can remember me having my background, my parents always nagged me to save, save, save, because you're going to need to buy a house when you're older. That was when I was a kid. So that was just always on the back of my mind. So I was always a saver, working since I was 16. Investing in property as an investment only started when I was about 22 or 23. My family were more old school, saved by a house, live in it, pay it off as quick as you can. And then you're free. Whereas my older brother, he was a year older than me, and he was ready to do that. But he actually started the other way around, investing in a property first as an investment and renting where you want to live, kind of like rent investing. So when I was 23, around that time is when I actually decided I'm going to be a property investor. That's going to be something that I'll end up doing, instead of living in there and paying it off yourself. If your family was that little bit old school, was it hard for them to reconcile the rent vesting idea with what they had always told you? Or did it, you know, it is, well, we're in 2020 now, but a few years ago, it's still, things have changed a lot, haven't they? Yeah, yeah, not really. It was quite easy because they never forced us to save or forced us to buy a house. It was always just frequent advice. Like the nice way to put it, always just telling us save, save, save, buy a house. And I guess investing in a property, look, if you're a parent and your kids are starting to invest in property, you can't really be upset with that. So I don't think it bothered them too much. I love that it's frequent advice and not nagging. Yeah, it's frequent advice, a nice way to put it. And you do have a property.

Can you share a little bit about that first investment that you made? Yeah, so my first investment was a property. It was a four-year-old brick house in Kerr Lewis on the Ballarine Peninsula, just out of Geelong. Four bedroom, two bathroom, and it's about 470 squares. So good size, close to shops, close to a couple of schools. Yeah, just a four-year-old house in Kerr Lewis. How much did that set you back at the time? Was it 2016 that you bought that? This was 2017. I bought it for $390,000. You would have only just been out of uni then, wouldn't you? Yeah, I bought it in my first year of teaching. So yeah, just out of uni, yeah. Wow, which not many people can actually do. No, no. How did you, you know, save up the deposit, even spend the time researching when you would have been really busy every week? Saving, look, I'm one of, I'll admit, I was a uni student that didn't study too much. So yeah, out of year 12, I started university in a music course. I started a music course at VU, and I realized that wasn't for me. So I spent that year just working. I just had three jobs, one in retail and two in hospitality. Not working 80 hours a week or something crazy, just enough. I was probably working about 50, but I needed three jobs to get that much. And from then on, I was just working heaps and saving. And when I started uni, I just dropped down one job. So I think I was still working full-time while I was in university. So about 35 to 40 hours a week working because university was only about three days a week. So it was still kind of manageable for me. And I never did it in a sense of just, I need to save, save, save. It was just kind of, if I wasn't working, I'd feel like I was doing nothing because I didn't really study much, to be honest. Like when I was at uni, I was studying. When I was at home, I wasn't thinking about it. So I might as well work. Yeah.

That leads into my next question. When you started saving, I know you obviously had that advice from your parents growing up to buy a property, but was it the intent? Is that what you were sort of setting out to do? Or was it just kind of a happy accident almost that you did make enough money? Yeah. So saving for me was just enjoying seeing the numbers go up in your bank account. When you're a bit younger, you enjoy that. And I guess subconsciously I always just knew it was going to end up being for a house. So for an investment property, I had no idea. I probably didn't even know what that was back then, but I probably was saving for that house subconsciously. I just knew I wasn't going to spend it on a car or something like that. Good on you. So with the Kerr Lewis property, did you know that you wanted a four bedroom place? Like how did you kind of come to that particular property really? Yeah. No, not really. I guess I got to Kerr Lewis, I was pretty lucky. So my parents had bought a block of land in Kerr Lewis a couple of years before that. And my dad is super, he knows all the details about everything. So I had someone already that was confident in the region, in the suburb. So I started looking in Kerr Lewis myself and just was looking at the average prices for four bedroom, two bathrooms. Being a bit naive, I guess I was looking for four beds, two bathrooms, because I just thought it might've been the best one. Back then I was thinking more bedrooms, more bathrooms, the better. It kind of is, but I guess I was lucky to go for that. And I just ended up finding a house like that, that was under market value at the time. I was looking at things like closeness to schools, closeness to the water, shops, and just close to Geelong in general, because I have a strong opinion on, I think Geelong is a great market in Victoria itself. For sure. Cause it's got the coast, it's not too far from Melbourne. Yeah, it's got everything. It's got a little CBD, the water. And I just feel like a lot of people are already moving there. And I think that will only continue. Would you live there yourself or is it more of an investment driven decision? It's funny when I bought the property, I said, there's no way I'll ever live here. It's not for me. I like more of being around culture, like especially cafes and that type of thing. But the older I'm getting, the more I'm seeing it's possible, but not for me, not so much Coluis, maybe more in Geelong, there's CBD, but not yet, not yet living in Coluis. Fair enough, Simon. We might take a quick break there, but straight after that, I want to find out how that investment is actually going for you three years down the track. Crush the burden of rising mortgage repayments.

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Welcome back to this episode of the Smart Property Investment Show, where we're talking with Simon Zamit, a school teacher, a 26-year-old down in Melbourne who bought his first investment property three years ago. Is that right, Simon? Yeah, that's 2017. I can't believe how quickly this year is going. But Simon, did you get tenants in there straight away? How did you find that whole landlord situation when you first started? Because you were only young. Yeah, so I bought it at 23 and I moved in for a year. So the property itself wasn't, the actual bones of it was great, but the front yard and backyard was quite disgusting, to be honest. So I actually moved in for a year. Was that to satisfy owner-occupier requirements? A bit of that, but also a bit of, I was living at home this time and I just wanted to move out as well. So I thought, two birds with one stone, so I'll move out into a house I just bought, fix it up a bit, do the landscaping, and the year after that, I'd pop it up for rent. Nice. And what was that year like? If you don't really want to live in Geelong just yet, I imagine it would have been a little bit of a shock to the system. Yeah, it was okay. It wasn't that bad just being an hour out of Melbourne. I was working in Altona Meadows at the time, so it was only like an hour or so drive to work. And you know what, listening to podcasts in the car isn't that bad, so it was all right. Is that where you really got into the smart property investment show bandwagon? No, I actually just got onto smart property investment during lockdown for the last two or so months. It's actually quite new for me. Well, welcome. We're glad to have you. Any other listeners at home, even if you are a new listener, feel free to get in touch. We're always looking to feature new stories on the podcast. So yeah, living down there for a year, and then obviously you've made the move back to Melbourne now. Yeah, yeah. Could you get tenants easily? What kind of price were you looking at as well? I put it up for $400 a week, and I got tenants pretty quick. I think within two or three weeks. It was a while ago. I don't really remember, but I definitely don't remember it being a long time, so it would have been quite an easy house to put up for rent. And did that cover the mortgage? Yes. So I've just did the finances this year, and it's a $2,000 positively geared, but that's inclusive of a $1,500 vacancy, which hasn't happened this year. So I guess I could technically say it's $3,500 positively geared. Okay, wow. And then you've kept tenants in then all through COVID, which is amazing. Yeah, I've actually gotten really good tenants, which is great. They're keeping it nice and neat. That property was actually famous when I bought it, or infamous, to be honest, for being not really a well-kept property. I think that's another reason why I managed to snag it up for a good price. But the tenants in there, I think they work in Woolworths or something like that supermarket. So I think they've been okay during this time, which is good. Essential workers. Yes, essential workers. Luckily for them, it's good. And so then, what are you planning now? You've got this property, it's obviously doing okay, it's got tenants in there that are still able to pay the rent, which I feel like down in Victoria would put you in the minority of people at the moment, really, with so much of the city and the surrounding suburbs and regions pretty much grinding to a halt over the last two or three months.

So what's next for you then on that property investment journey? Well, yeah, this is actually why I got onto the Smart Property Investment channel. I contacted my broker for a valuation and it came back evaluated at $614,000. Wow. Yeah, which is crazy over two years. And I have an 80% leverage. I've got accessible equity of $156,000, about that much, which is just a sudden boom of accessible equity, to be honest. So what's next is I'm looking to invest in another property. And that's actually where I'm having some confusion, or not confusion, where I'm trying to get as much information about the market as I can. So literally every morning, I've been going on four-hour walks, listening to podcasts and channels about the property market, and just trying to decide where to go next. And I guess that's the hardest part, just deciding where. For sure. And $150,000 is a sizeable deposit, no matter where you are, really. Yeah, pretty big. I'm looking more so, though, to go for low-priced houses again, to get one or possibly two, just to diversify a bit. My strategy is more of a, not so much a positive gearing strategy, but my strategy is to get a property that has as much potential for capital growth while being as close to a neutral-geared property as possible, because it fits to my whole strategy and lifestyle of, I just want it to take care of itself, and I don't really want to be changing my lifestyle to manage these properties cashflow-wise. So it's not really like you're looking to move in somewhere and flip it or renovate. You just want property that is in a good area. Yeah. To be honest, it's just as close to a CBD as possible and how much I can afford. That's how I actually popped into Kurt Lewis. It was just as close to a CBD in Melbourne as I could afford. That's a neutrally geared, at least. Yeah. So what kind of areas are you looking at then to do that? Yeah, I've been looking a lot in Brisbane, places like along the southeast coast or north down in Strathmore, that area. I've been doing a lot of research into there. Obviously, it's really hard because I can't travel, which has been terrible. So there's other areas I've been looking at too, like Ballarat and Bendigo, more so regional areas, but not just going to any regional area that is cheap for me and will be positively geared.

It's more so regional area that I think has a lot of potential for upside growth and especially being with the COVID now really allowing people to work from home and confidently move away from the city as well. Ballarat and Bendigo I see as major CBDs in the regional areas that I do believe in, but I would prefer Brisbane as just to diversify a little bit more and go closer to a capital city that's still quite affordable. I can imagine the travel thing is a really big deal at the moment. Is that actively preventing you from, you know, looking for property at the moment? Like is it, do you want to be seeing where your money would be going? Do you want to go to private, like, you know, where's your head at with that kind of thing? Look, I'm the type of person that could just happily buy a property if I'm confident in it and not having to see it, but interstate where I've never been, like I've never been to the northern parts of Brisbane, that's a lot harder because all it is to me is a map and data and information, whereas if I was to buy something in Victoria and not be able to see it, I still know the areas and I have a bit of knowledge about it. So it is kind of stinting me a little bit, but look, I'm just doing as much research as I can and not trying to rush into it either. And as soon as those borders open, look, I'll probably be on the first plane out just to have a look and drive around. And for maybe a holiday to leave the house. Yeah, and a holiday too. Yeah, that's it. Just a bit of a road trip. We're going to take another break there, but we'll be back shortly with Simon.

Welcome back to this episode of the Smart Property Investment Show, where I'm with Simon Zemmet, a Melbourne-based schoolteacher who's looking to buy his second property. And I feel like there's probably a lot of listeners out there that are in the same boat that have kept their jobs through COVID, that have stable income coming in from whatever is already in their portfolio. And it is a really ideal time to be buying right now, if you have the means to do so, Simon, I'm sure you'd agree. And you just said you're not in any kind of rush, but do you feel like an urge you want to be buying soon? Well, yeah, because I just feel like that equity is just sitting there and I don't want to miss out on any potential gain. But yeah, I'm again like a pretty chilled person, like the whole it's weird that I'm a property investor, but I'm investing because I'm a relaxed person. I don't want to have to have a lifestyle where I'm worried about my job or income. I just want to be financially free. So look, the quicker I get there, the better, which means I need to buy properties. But yeah, I am really eager to go, but I can't really because of COVID. So yeah, I'm in a bit of a weird situation. And you've sort of alluded to it a little bit. And I know from what you sent through when you brought up your story to the Smart Property Investment Show, that you do have a bit of a different strategy to other people that are investing. And so that freedom makes up a huge part of that for you. Has that always been the strategy? Has it or has it just kind of been almost by chance that property can actually provide that for you? Oh, look, it's been a lifestyle for me. It started even before property. So I just jumped out of year 12 with the same issue everyone has not really knowing what to do. And I ended up going into a teaching degree. And that was due to not really knowing what I wanted to do. But I knew I wanted a job that I wasn't going to hate because I worked a lot of jobs before uni and I just wasn't passionate about them. And I knew I enjoyed being around kids and teaching kids. So I went into that course knowing that it's a good foundation to have to end up. If I end up in teaching, it's not going to be a bad deal. And I guess I had the same type of mindset with property investing.

The whole reason to invest for me was so that I'm not stuck in any job that I might not eventually like in the future. So I'm also a barista in Melbourne and I equally enjoy teaching and working in hospitality. But I do see myself working in hospitality a lot more in the future. And I just see property investment as a vehicle to get there comfortably. I could just lockstop up and go now and just go for it. I think my personality kind of forces me to create a foundation before I go off and do something crazy. And as we've seen, hospitality is quite high risk at the moment. Yeah, it definitely is. I bet you're glad that you've got a government job at this point and you're not a barista right now. Yeah, I was pretty happy. But even so, I'm still looking for cafes that are hiring like one day a week just because I love it so much. So, but yeah, I am lucky, as I said, to have a government job. So how many properties do you think you're going to need, you know, to set up the lifestyle that you are looking for? You know, what's the long term plan? It's been changing. So my first long term plan was to buy one property. And when I built up some equity, I've used that equity to start up a business like a cafe. And now that I've built up that equity, but now being in the environment of COVID, I'm obviously not going to be opening up a cafe anytime soon. So it's kind of changed. Whereas now I'm looking to build a stronger and more solid base of properties. So maybe, I don't even know, it could be three, it could be five. But look, just enough to eventually fund a lifestyle once they're all paid off. And look, I haven't really gotten into numbers. It might be worth $3 million. Let's say if it's paid off at $3 million with an average rent of whatever it is, 3%. What is that, like $30,000 a year, something like that? I could, I guess, live off that. I could work two days a week and live off $30,000. I feel like it would even be a bit more than that by, as inflation happens and as all that, you know, all those numbers. But it sounds like you've got a really good research backing your decision making. It doesn't sound like you've gone into this blindly at all. Yes. Which is a credit to you, really, to be doing that so young. And especially if you haven't heard of the Smart Property Investment Show, hadn't heard of it until this year. But I hope, you know, this show and the resources that we have does go some way into, you know, helping you work out what you want and what you need from the property industry in Australia.

So Simon, thanks so much for sharing your story with us today. It'll be really interesting to see once you get that next property, wherever it may be, whether it's interstate or locally. Please keep us updated. Yep, no worries. Thanks for having me. To everyone at home, if you enjoyed this show, please leave a review on whatever platform you're using to listen in. And be sure to subscribe if you haven't already. And if you have any questions for the Smart Property Investment team, don't hesitate to reach out either via our social media channels or at editor at smartpropertyinvestment.com.au. Also, Simon, I feel like you're the kind of person that we can put a call to action out to anyone who might have some insight or intelligence that they might be able to offer you. I feel like this is a great episode to be doing that because you do seem like you're just not sure what your next steps are. Yeah, I guess so. I'm just not sure where to go next, really. There's too many options at the moment. And I kind of just need to look at one area and really study that area. Well, best of luck. We'll see if anyone comes back with any kind of good information for you on that. But until next time, to everyone listening at home, stay safe and well. And bye bye for now.

The information featured in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon. Before making any investment, insurance, tax, property or financial planning decision, you should consult a licensed professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.

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