25 Oct How two regional police officers grew a portfolio in three years
When Daniel and Kylie met on the police beat in Townsville, they shared more than just a vocation.
They decided to create a life together in Far North Queensland and the first step was buying a home in 2008.
Back then, like so many others, they chose the location of their house based on where they wanted to live – and it was the right choice because they continue to call it their home today.
While the Townsville property market has had some outstanding performances in the past it, like many other locations in Australia, has been underwhelming post-GFC. For Daniel and Kylie, they had assumed this would mean that they’d have to put any dreams of growing a portfolio on the backburner.
But, as you’ll soon see, they were pleasantly surprised with what was truly possible when an award-winning professional shared their expertise.
The couple settled into family life as Kylie’s two daughters attended high school. Then, over time, their incomes increased as they advanced in their careers, and their expenses decreased as the girls started lives of their own.
So, it came to pass that, in late-2014, Daniel started to wonder whether his long-held dream of improving their financial future should become a reality.
“The next thing you know you’re in your 40s and you’re suddenly starting to think more seriously about retirement,” he says.
As part of his research into the property market, Daniel started to read about buyer’s agents and was soon recommended Propertyology – interestingly by a different buyer’s agent.
At the time, Daniel and Kylie thought they might be able to afford to buy one solitary investment property. They had assumed that an inner-city property within a capital city constituted ‘blue chip’ and were thinking that perhaps a brand new Brisbane apartment might be a good option.
However, after making contact with the Propertyology team, the couple soon learned that having pre-determined ideas of where and what to buy wasn’t necessarily the best strategy.
In hindsight, given the resultant new unit oversupply in Brisbane and recent reports that standard new apartments have fallen in value by as much as 25 per cent, it proved to be valuable advice.
The couple still thought they could only afford one property and, perhaps, another in six or seven years time.
However, Propertyology’s Head of Acquisitions, Bryan Loughnan, identified unrealized potential and suggested that they developed a detailed property investment plan.
At first, the couple baulked at the idea of paying for an investment plan, but they soon changed their thinking.
“A couple of days later, I came back to Kylie and said that if they are able to assist us in the ways they say they can, maybe our retirement at the end of our working lives will be, say, $100,000 better than what we could achieve on our own?” Daniel says.
“I said ‘$100,000 was not even a lot over that period of time… but if we were $100,000 better off isn’t the fee a pretty good investment to make?
“I said ‘We’re probably going to be $200,000, $300,000 or $400,000 better off in retirement through the right advice and the right investing strategies.’ So, we could see the potential for the benefit that it might later give.”
Three in three years
In June 2015, Propertyology negotiated the purchase of a 2-bedroom apartment in a 6-pack block, in an interstate capital city location, for just $253,000.
The couple has been able to ride the price upswing of that first investment, with its latest estimated price being $370,000 to $400,000. That’s more than 50 per cent growth in just three years!
With current rental income of $295 per week, the property is already cash flow positive however, a recent rent appraisal suggests that a significant increase would be possible when the lease expires in a couple of months time.
One year later, July 2016, the couple was ready to go again – contrary to their original thinking of only being able to afford to buy one investment property.
This second property was located in a different state within a major regional city which has a diverse economy and an unemployment rate well below the national average. Propertyology negotiated the purchase of a 3-bedroom house for just $315,000 and it’s always been tenanted ($345 per week rent).
“The location wasn’t something that we had even factored in as a possibility, so we were surprised, but our experience on the first one was let’s just put our faith in the team and do what they tell us,” Daniel says.
Their third property was purchased in September 2017, less than three years since they first came in contact with the team at Propertyology. Located in another completely different city, it’s a 3-bedroom house that overlooks the ocean in a major regional location for only $248,000. The weekly rent of $300 equates to a handsome 6.3 per cent yield.
Through adopting a small-fish-are-sweeter strategy, Daniel and Kylie have already been able to build an extremely diverse property portfolio. Breaking their investment capital up in to smaller, bite-size pieces and buying multiple properties in completely different cities is as much a risk mitigation strategy as it is to take advantage of multiple opportunities.
Buying three properties inside three years is not something that Daniel and Kylie imagined was possible. And, they haven’t had to break the bank to achieve it.
Having recently been through a portfolio review with Propertyology, they are currently organising their finance with the aim of buying their fourth investment property prior to Christmas.
Daniel says there is no way they could have grown a portfolio without the guidance of Propertyology. And, their own research would never have included the detailed economic analysis which Propertyology is renowned for.
“If I didn’t engage someone to assist me, I would limit myself to probably buying in an area that I know the neighborhood and could personally go and look at the property,” he says. “Then there would likely be an element of emotion attached to that decision because I’d be focusing on whether it looked nice, rather than making it purely a financial decision based on good information.”
Another major benefit was the fact that the team supervises the entire buying process, which made each transaction seamless. Daniel says they can’t quite believe what they achieved in such a short period of time.
“It’s amazing to us, still, when we stop and think, ‘Wow. Look at what we have got already. We have three investments plus our home and we’re about to buy that number four’.
“It’s something that I wouldn’t have ever thought was possible and I have no doubt would not have achieved without the help of Simon and everybody at Propertyology.”
Propertyology is a Brisbane-based buyers agency and (national) property market research firm. We help everyday people to invest in strategically-chosen locations all over Australia. Australia’s only analysts to forecast Hobart’s remarkable recovery before the current boom, our buyer’s agents are actively investing in a few locations that resemble what Hobart looked like in 2014. Like to know more? Contact us here.