Andrew Mirams – as well as being the guru of property finance – is a seasoned investor who helps people all over Australia develop their property portfolios. He shares some of his personal experiences with us this week as our feature guest.
Kevin: Our feature interview this week is featuring Andrew Mirams, who’s no stranger to our show, but we’re hopefully going to learn a little bit about Andrew that we didn’t know before we started this conversation. Andrew, of course, is from Intuitive Finance and he’s a regular contributor to our show. We certainly know how talented you are when it comes to talking finances, but let’s find out a little bit more about you.
Andrew, good morning, and welcome to the show.
Andrew: Hi, Kevin. How are you?
Kevin: Good, mate. Good to be talking to you again. Andrew, we probably will end up talking about finance because we always do whenever we talk to you, but what about your involvement in property investment? How did it start for you?
Andrew: Basically, I’ve been in finance all my life, so as a 15-year banker before, now a nearly 15-year mortgage broker, obviously being around it all the time it tweaks your interest. I’ve always had an interest – even at an early age – in finance and property and maybe games of Monopoly. I can’t remember whether I won or lost, but I was always intrigued by accumulating property and how you did it and all that sort of thing.
So, I started at a young age and then once you start in the industry and you start seeing people doing well themselves, that obviously piques your interest.
Kevin: You’d certainly rub shoulders with a lot of people who are doing it well, and you’d also see a lot of people you’ve no doubt learned from over the years. So, I will ask you about that, but tell me about your first property investment purchase. Where was it, and how old were you?
Andrew: It’s the classic story. Obviously, we bought our first home. Our first home was a little house in Castlemaine in country Victoria. We did that because my wife and I just got engaged and we wanted to move in there. But you move around as we did in the bank in those days, and the first actual property investment is a classic, like probably most people do.
The house for sale over the road went up and we thought it would be a great little investment, so we bought it. Not the best investment. It was in a country town called Stawell, which is actually where I grew up in country Victoria.
Yes, the classic like what we all do, Kevin. We see something across the road or in our local neighborhood and we think that’s the best investment, so let’s grab it. We did, and we didn’t do too badly out of it, but like everything, if you could put an old head on young shoulders, we wouldn’t have invested there. We would have made much smarter decisions earlier on.
Kevin: Was it where the property was, or was it the fact that it was in Stawell?
Andrew: No, it’s still a beautiful little country town in Western Victoria. It’s just the limited growth in a small country town. We got a good rent return. We thought, “Oh, this is all right. It’s paying for itself.” But like I said, we were able to get ourselves out of it without any real damage done but didn’t make any money. We learned a very valuable lesson very early on, Kevin.
Kevin: I remember in our very early investment days when we were moving around a lot, when I was in radio, the banks were quite reluctant to lend to you as an investor. They really just wanted you to buy your own principal place of residence and pretty much stay there. They wouldn’t even allow you to transport loans in those days, so that’s going way back.
It made it very hard to start to build a portfolio at a young age.
Andrew: Yes, it did. But when we had the deregulation, when the markets and the banks and the finance market deregulated, that probably started to free up things and made it easier for people to be able to accumulate.
In the old, olden days… Way before our time, Kevin, of course. We are a couple of young guys…
Kevin: I’m giving my age away here.
Andrew: You are a bit. We probably both could, but let’s not.
The only way to do an investment portfolio would have been literally if you had money. The wealthy just kept getting wealthier. Now it’s a little bit easier for everyone to get into the market.
There are some rules and regulations. The same old golden rules still apply – you have to have a deposit and you have to have an income to service it – but pretty much the markets have liquefied as the county has grown and everything like that.
You’re encouraged now to build your own wealth profile and look after yourself rather than rely on a pension, so it’s become easier in time to be able to get into the property markets.
Kevin: I want to ask you about mentors and who you turn to and who you get your inspiration from. But before we do that, can I take you back? You purchased that first property with your wife. That was the one in Stawell. After you sold that property, was your next property a principal place of residence, or was it an investment?
Andrew: We’d always had our principle place of residence and things like that through the journey. We’d been able to buy and sell our homes and upgrade, so we’ve done okay there.
Our next investment property journey, we put our trust a little bit blindly into a financial planner’s hands in Melbourne who bought us a property. Nice property. If I said I’d bought a property in South Yarra, it makes people say, “Gee, that must have done well.”
Another golden mistake, we trusted a planner who was getting a little bit of money on the kickback, so we didn’t get the right figures. It was actually a studio apartment with Quest Group, a service department, and that was really a yield plan I didn’t need when I was in my mid to late 20s. I didn’t even need yield; I wanted capital growth.
Again, you learn by trusting others. We all need mentors around, and we need the right mentors. That’s probably the key and doing your research and what’s in it for everyone, not just in it for you
We got out of that property without any real damage done, but when I say that, we’re not losing money, but the idea of investing in property is, of course, to make money. We got out of that, and since then, we’ve slowly and surely built a great team around us.
We use some buyer’s agents now who we know have our interests at heart, because I don’t have time to go out and do all the research myself and things like that. It’s not because I don’t know the markets; I literally just don’t have time to be doing what they can do really well. Now they’ve helped me start to build and accumulate my property portfolio.
Kevin: When you’re working with buyer’s agents like that, Andrew, do you actually give them a good brief of what you want, or do you find that they intuitively know what you need or what you want in your portfolio?
Andrew: A bit of both, but again, it also comes down to your budget. You can’t have a champagne diet on a beer budget. It has to be within your limitations. It has to be what you’re looking for, what you should be trying to add to your portfolio. You do that in conjunction with good mentors, good buyer’s agents, and things like that.
They’ll work with you about who, what, when, where, and how, and as long as you have a budget, they can generally find the right property or the style of property to complement your portfolio.
Kevin: Do you work with more than one buyer’s agent?
Andrew: Yes, I have one really strong networking connection, but we have some networks. Over the journey, you meet lots of people, so we do know quite a number of the buyer’s advocates. It’s like brokers and bankers and everything like that; there are good ones and bad ones. I shouldn’t probably say bad ones, but there are ones I trust more than others, I guess, with the same philosophy as mine.
Kevin: Do you invest in different parts of Australia, or are you pretty much just doing it in your own back yard?
Andrew: No, I learned about the own back yard, or as it was, across the front yard, on the other nature strip. No, across numerous markets. It’s the old diversification. There’s not one I hold dear about having to have cash and shares and things like that, but I do think you can invest in different markets with the right team around you to help you buy in different markets, because you’re going to get different metrics and different performance from different properties at different stages.
Yes, I invest across Melbourne, Sydney, and Brisbane.
Kevin: What would you say has been your best property investment?
Andrew: Mid last year, we finished our house, which is quite a nice property in Hampton in Melbourne. And it’s great. It suits our lifestyle and it suits all the things that we’re able to put in the property. That’s been good. We added a nice little unit in Coogee a few years ago, and that has gone up quite substantially, so that’s probably the best one.
But I’m finding now anything you can add value to… Buying the new properties and the amount of properties that are coming up out of the ground and things like that, I think if you can get the old ones with the really good structure and bones around them, the nice big open areas, and things like that and do a really nice renovation, I think you can do really well.
That can be units or it can be houses. You don’t have to completely bulldoze a house, either; you can do really nice renovations and improvements – structurally or non-structurally – to add value to your portfolio.
Kevin: What sort of property investor are you? Are you adventurous? Are you conservative?
Andrew: The reality is you get a tax deduction for putting your investment out there, so everyone who does invest is a little bit adventurous. I wouldn’t say I’m a great deal. I’m not a developer, I’m not trying to make the next quick buck or anything like that. History would show that capital growth is what I’m after, and capital growth is brought about by buying the right properties in the right areas and then allowing time to do their thing. So, probably not adventurous.
Aggressive: I want to get as much property as I possibly can and have as much there, well leveraged and looked after with a nice buffer so that I can continue to support my lifestyle now but more so into the future when I’m not working as hard and have a nice portfolio there to support me.
Not adventurous, but certainly aggressive while I’m trying to build and continue to add good properties to my portfolio.
Kevin: Help me with a bit of advice now for someone who may be looking at getting started with their own portfolio. Can you give us some good advice we can pass on to them, things that you’ve learned over the years?
Andrew: Yes. Get a great team around you. Again, in finance, I thought knew it all. I won’t say I do now, but after 30 years of seeing lots of mistakes – some I’ve made myself but lots of people’s mistakes – get a great team of financiers, buyer’s advocates, lawyers, accountants, and things like that around who you can trust, who actually work for and get paid by you so that they have your best interest at heart.
Do your research on those people. Google and the Web and everything like that is an amazing tool to be able to just get some research and validate the person you’re actually in business with. That’s the first thing.
No one starting out should have to make the same mistakes that we probably have, Kevin. So listen and learn from people who have made those mistakes. None of us are bulletproof; we’ve all made mistakes. The best team you can get around you that can help you try to avoid some of those mistakes, I think the better you’ll be in the long term.
Kevin: What books or courses would you recommend anyone should undertake if they’re looking at starting a portfolio?
Andrew: None of the courses that are spruiking. Don’t go to anything like that that has something for sale. I can remember walking along Noosa. They used to grab all what they call the Mexicans on the Gold Coast and wheel you into some show and try to get your data. They’d give you a couple of tickets to something, but they’re all about trying to sell you something. So, anyone who’s got something to flog or to present or hoping to get a signature from you that day, don’t ever attend those.
Go to people who are doing it. Listen to people who are doing it and saying it. I think one of the best property mentors and guidances is Michael Yardney. He has numerous books out there that you can read.
I think people like Chris Gray and people like that who are doing it themselves, they have a reputation, they obviously put themselves out there to be questioned, but they’re quite honest in their approach and have the same thing: the test of time. They’re all long-term investing, not a get rich quick scheme or buying something off the plan or anything like that where you’re going to save some stamp duty but it won’t go up in value. Anything like that.
Like I said, Google and the Internet is a pretty amazing tool that you can get lots of information from. Don’t go to anything that anyone is trying to sell you something on that day, because they’re just trying to rip you off, talk to your emotions – like going to an auction, talk to your emotions, and get your autograph on a line. So, steer clear of those, but otherwise, there are lots of great mentors and property advocates out there.
Kevin: What advice are you giving your kids about getting into property?
Andrew: Great question. You can hand your kids some money one day and go, “Here, go ahead and do it and potentially make some mistakes.” I’m making my kids save some money, so I want them to have some skin in the game, but we’re educating.
We’ve been showing them what we’ve been doing for some time. We’ve had them actively involved in the decisions and the portfolio and things like that we’ve done. And the plan is… My son is working, my daughter isn’t at the moment. They’re 22-year-old twins.
We want to help them by showing them and getting them involved in doing it. So, their first property investment – I hope, if everything goes well and they can save their money. My daughter is just about to start work, so she hasn’t got much money having been a uni student for three years.
We want to get them into a development where they’re going to put some of their money in, but they’re going to get to see the start to finish project – how to buy, what you need to do. They’ll have their hand held by a buyer’s agent and obviously myself looking and hoping, but I want them to make some decisions. They’ve seen what we’ve done, so now I think the best way to educate them is by doing.
Most people learn when you do something and make mistakes, or you have to actually make a decision. It sticks a lot more in your mind than just having some money, buying something and hoping it goes up.
So, we’re trying to do that, trying to teach them. Rather than throwing them a fish and feeding them for a day, we’re going to try and teach them how to fish, Kevin.
Kevin: Yes, well done, mate. That’s very well said, and that’s some great advice. We’re going to leave it there. Thank you so much for your time, Andrew. It’s been great talking to you, and thank you for sharing your story with us. It’s always quite inspirational.
Andrew Mirams from Intuitive Finance. Thanks for your time, mate.
Andrew: My pleasure, Kevin. Have a great day.