Entering the world or property investing can be achieved by “ordinary” Australians, but it does take some research, planning, the ability to spot an opportunity and sometimes a degree of luck to be a viable proposition.
For many people, the idea of investing in property can be daunting. What type of property do you buy? Where should it be located – city or regional? House or unit? Should you look for negatively or positively geared property?
While there are no right or wrong answers to those questions as circumstances and investment goals are different for everyone, one man from the Hunter region has used his own instincts to build his family’s wealth.
Peter of Newcastle, 46, started his property investing career when he was just 22 and at the time he said he was the first person in his family to try and build wealth through property.
His first purchase was a small brick veneer house in Inverell, which cost him $33,000 and was positively geared.
“It wasn’t much of a house, but I made some improvements to it and managed to rent it out at a decent price,” he said. “The property was positively geared, which meant I wasn’t out of pocket each week.”
Peter went on to buy and sell more than a dozen houses in the years that followed, and currently has a portfolio of five houses located in Sydney and the Newcastle region worth around $1.6 million, and is building their “dream home”, bringing the total to six.
He said there are a number of factors he looks at before buying an investment property including location, land size and whether he can improve on the home.
“I’m an electrician by trade, so I’ve worked around builders and carpenters all of my life and I’ve picked up some handy skills along the way.
“I always look at a house and see if I can improve it – whether that is landscaping, paint, carpet or minor structural work to make it more appealing to a tenant.
“I also try and buy a house on a decent sized block of land, as there may be opportunities to sub-divide or build a duplex in the future.”
Peter also advises that anyone looking at getting into investing needs to stick to their budget and not let emotions get in the way of a smart deal.
“Don’t believe the hype that you’re going to make bucket loads of money straight away,” he said. “Be cautious, be safe, be smart and don’t get greedy because that’s when you get your fingers burned.
Peter’s Top Tips
- Use your skills. Ask yourself what you can do to add value.
- Don’t buy renovated property. It’s already at the top of its value.
- Ensure the property is close to schools and public transport.
- Do your research.
- Have a good financier – they need to be flexible.
- Stick with what you know.
- Don’t be afraid to sell and re-invest.
- Don’t get in over your head. Don’t let your emotions get in the way.