How this investor created a 39 property portfolio- George Markoski

According to him, his journey began with Monopoly and a lottery ticket.

“Property for me has been very exciting. I remember when I first played Monopoly at a friend’s house; I just loved it. People were saying, ‘You could do this in real life, playing monopoly’, and I thought that was pretty exciting.

“I didn’t know any other way of growing money. You got the stock market, but I don’t know anything about the stock market. It sounds complicated. Properties are pretty simple and you can see it, you can feel it, you can own it.”

Mr Markoski was running a marketing company when he bought his first property in Forest Hill through an auction.

“I paid $179,000, which I thought was a lot of money at the time. Now it’s probably worth about $820,000.”

At that time, his strategy was simply looking at negatively geared properties close to the city.

“Back in the ’90s, that was when negative gearing was big, I started doing negative gearing… and it was quite challenging because I was buying older properties.”

Moving forward, he started purchasing new properties in order to take advantage of tax deductions and ultimately improve his cash flow.

Further on in his journey, he started to get into more sophisticated strategies, such as property development.

“Slowly, I’ve tried a lot of different things. I tried buying and doing rentals, but that didn’t work for me… Then, I started getting into new properties so I could get the tax deductions and get the money back. I was using the interest only.

“I did a lot of hustling and tried a lot of different things to try to get my property portfolio moving. And some things worked, some things didn’t work.

“And now, what I do is a bit of a mixture of strategies. Sometimes, I’ll buy an old property, knock it down, do a development, then keep one, sell two… that sort of stuff,” Mr Markoski shared.

With 39 properties, he has successfully achieved a good loan-to-value ratio and about 60 per cent equity in his properties.

According to him, a million of this equity was achieved in only the last 12 months.

“I was pretty surprised by that. That was just a couple of stock properties that just did much better than I expected. I normally expect to get an average of 5 to 7 per cent per year long-term.”

This long-term view, as opposed to running after massive equity, allowed him to minimise risk in his portfolio and enjoy consistent growth across his properties, Mr Markoski said.

“You really need to look long-term because that’s what works.”

“I remember one property I bought in Perth – I paid around $224,000 just before the mining boom. Then it went up to nearly $500,000 in two years, then it slowed right down. But if you look at over a 10-year period, it still did the average anyway.”

Timing, as well as building a substantial portfolio, also played a critical role in his success, according to the investor.

“If you can get your timing right, sometimes it’s great. I think the more properties you have, the more chance you got to get your timing right… It’s all about diversifying.”

Moving forward

Right now, after slowing down a bit during the beginning of the COVID-19 outbreak, Mr Markoski aims to jump back in again into the “perfect storm” brought into the property market by the pandemic.

According to him, history has proven property’s resilience through many global crises.

“If you look back in ’87, when we had the stock market crash, everyone’s like, ‘Property is screwed’. But what happened? Property bounced back and doubled. Then we’ve got the GFC as well. I know history doesn’t repeat, but Mark Twain says it certainly rhymes.

“I really think property is going to rebound quite a bit. It’s an interesting market at the moment, but I really feel it’s a great opportunity at the moment to buy a property.”

Tune in to George Markoski’s episode on The Smart Property Investment Show and find out how he intends to continue this wealth-creation journey in the “new normal”.