16 May 2024 Podcast: Deep Dive – My Journey to Owning Two Properties by Age 26

Today our host Evelyn takes you on a deep dive into her own personal property journey.

In this episode Evelyn talks about how she purchased two properties by the age of 26. 

Evelyn shares the nitty gritty costs involved, how much she needed to have in savings, how much she borrowed, and what her initial plans for the properties were.

In particular, Evelyn gives an overview on her plans to develop the first property, and how this was very quickly altered based on the changes in the market.

Evelyn shares her wins and her learnings, and where to from here!

We hope you enjoy today’s episode, and if you have any questions off the back of it, please feel free to email them through! 

Find out your next step in property finance:

You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at
https://www.everlend.com.au/

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You Have My Interest is brought to you by Everlend, a mortgage and finance broking firm built for the purpose of educating and empowering you to make informed financial decisions tailored to your wealth goals. Find out more and book in your free initial consultation at ​​https://www.everlend.com.au/

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Find out more about You Have My Interest at everlend.com.au/podcast and connect with us at podcast@everlend.com.au

You Have My Interest provides information and educational content relating to mortgages, finance and property. You Have My Interest‘s content is general in nature and does not take into account the individual financial, legal or tax needs or objectives of its audience members.

It is not intended as a substitute for professional advice. Listeners should seek out a licensed professional to discuss their individual financial, legal and tax requirements.

If you need mortgage or finance advice tailored to your own personal situation, contact Everlend today for a free consultation. Everlend are authorised credit representatives of Loan Market Pty Ltd, Australian Credit Licence number 390222.

Podcast produced with Apiro

 

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Podcast Audio Transcript

 

(00:03.044) Hello everybody, welcome back to today’s episode of You Have My Interest. I’ve got a different episode coming today. I’m actually going to do a deep dive on my property journey, which is something that I wanna share in terms of being fully transparent and open about what I have experienced in the property game, how I have purchased my two properties, but also to let you know the, not necessarily mistakes, but lessons that I believe to have learned along the way, things potentially that I would have done differently with hindsight, which I think everybody has, especially in property, because it can be relatively unpredictable. 

But what I really wanna do is open the conversation. And I’m gonna give you real numbers and real data here, because I want to be able to open the conversation on the acquisitions that I have made, why I’ve made them, the value, the cost, and also looking at would I do it again and what would I do differently so that you can then have a bit of a think about when you’re purchasing property yourself or when you’re maybe evaluating your portfolio, maybe take some of those lessons if they are relevant to you, but also just be able to hear some real life examples. 

And also know that we don’t necessarily always get it right, even though I wouldn’t necessarily say I’m in the property game, but I’m definitely in the finance game. Things like property can be unpredictable. And when you are looking at investing in property, you really need to decide on your strategy, whether it is gonna be a long -term gain, or whether it is going to be something that you’re looking at, I guess, acquiring and flipping to be more sort of short -term acquisition and sales, as opposed to that sort of traditional method, which is purchase, hold for a long period of time, purchase your next one when you can, hold for a long period of time, and eventually the capital growth in the asset is really what you’re chasing. 

So there are very different models. So I’m going to take you through my first purchase and what sort of costs were involved, what I bought, what my plan was with that property, what I’m now doing with that property and how it helped me to buy my second. And then I’ll take you through my second property and again, why I bought that one, why that’s been valuable to me, what my plans were with it, what I’m doing with it now and what my next steps are going to be going forward as well. So to start off with, let’s look at my first property purchase. So for context, I live in Victoria in Australia,

 

(02:27.46) and I purchased an investment property as my first home. And the reason that I bought an investment property for my first property is because I knew that my money was gonna get me a lot further in an asset that was going to grow in wealth, so something that had capital growth potential, and that I could effectively snowball my capital growth earnings onto purchase my next property with.

So effectively what I did is I really wanted to buy something that had potential in it. I used a buyer’s advocate. My buyer’s advocate cost me around $11 ,000 at the time. My brief was I wanted something under $500 ,000. And because I was buying an investment, I didn’t care about paying stamp GD and all of those sorts of things because I knew that if I bought another property in Victoria under the stamp GD thresholds, I would actually be eligible for those. So that’s a really important criteria to note here. 

So my criteria was under $500 ,000 regional or strong growth potential. Also land size was a really big component because I wanted to have subdivision potential because my idea with this property was I wanted to be able to number one leverage the immediate capital growth in it, but also be able to hold an asset that I could actually subdivide and build a second dwelling on and potentially also create some value out of the sale of two new builds or one newer build and one older build down the track as well as the initial uplifting the land. 

Now because it was an investment I was also going to be earning some income from that property from day one as well but with yields in Victoria I wasn’t expecting that to be a primary source of income. I was really looking at the actual growth of the asset as the performance metric that I was the most interested in.

So that was my main brief. Now, when you’re looking at properties that are able to be subdivided, I would strongly, strongly encourage you to go back to the episode that we did with Baz Komak, who is a property developer, where he actually went through some of the most common things that you need to actually be reviewing on a property if you are going to be subdividing them

 

(04:39.044) because there are a number of properties that will actually come across your desk if you are looking on realestate .com on a regular basis that do not have ability to be subdivided, even though they may have the right square meterage. So square meterage is certainly one part of it, but it is not the only thing that allows a property to be subdivided. So realistically in Victoria, we were looking at a property somewhere around 600 to 700 ,000, yeah, 700 ,000 square meters to be able to then subdivide that into two dwellings. 

And obviously the position of the existing dwelling on the block played an impact. Also, so not only like front to back on the block, but also side to side where it was positioned on the block, because you need to have access for a driveway to be able to obviously drive to the second unit behind it. But also when you’re completing the construction, you need to have a certain width that you can actually then get trades and all sorts of trucks and things down that driveway as well.

So we looked at a few different properties. We ended up settling in Geelong is where we were looking for this type of property or asset. And at this stage, it was 2018. No, it wasn’t. Let me just go back to that. I bought in.

 

(05:58.148)

 

(06:02.82) Purchase stocks, 2021, okay, cool. So at this stage, it was actually at the end of 2020 when I started looking. So it would have been around November, December. We ended up finding a property at the start of 2021. And I used my good old mortgage broker for my pre -approval. I was pretty confident on getting the finance approved. So we went ahead and purchased unconditionally.

We found a property in Nour Lane, which is a few minutes outside of Geelong and it’s definitely not your most affluent area in that vicinity. But the reason that we went with Nour Lane, there’s certain pockets and if you know regional areas, this is why I wanted to use a buyer’s advocate because I didn’t know where exactly in the Geelong market I should be purchasing. So there’s definitely certain areas that you want to avoid. There’s definitely certain streets that you want to avoid. And this is the case with any location that you’re really purchasing in. So knowing the area is absolutely paramount.

We ended up purchasing in Nor Lane, which is not the most affluent, but it was close to a lot of amenities. It was close to the freeway and it’s not far out of Geelong as well. So when we looked at the uplift that Geelong potentially had, I was priced out of this type of property in Geelong as a suburb. So I had to go a couple of suburbs out. But when we looked at the uplift and where the growth was going to be occurring down the track, we determined that Nor Lane could definitely be a strong contender in the future.

So I actually bought this property for $430 ,000. Now, when I bought it, it had plans and permits for a second dwelling already secured and approved on the land, which was a great benefit to me because if I ever needed to go back through the planning process, it would cost you a lot less to sort of alter the existing plans and it would just submit a whole new application unless you’re, of course, fully rejigging everything. But if there was only modifications needed, that was going to be beneficial.

Also, it meant I could pay a small fee when the plans were coming up to being expired to extend my plans for another 12 months to two years. So I actually applied for that extension and I will go into the purchase costs and everything shortly, but I applied for that extension at the end of 2021 and I was able to roll that over for another two years, which took me to the end of 2023 in terms of my plans being approved. And in 2023, I actually rolled them over for another two years. So I’ve had my plans

 

(08:27.364) approved and on that land for a significant period of time, but it means that they’re there, they’re not going to lapse and I can then start the construction process. Also, I thought so I purchased for four hundred and thirty thousand. I guess in terms of things that I did, which I always recommend that my clients do, I had my contract reviewed by a conveyance prior to signing. I did go unconditional, but I was pretty confident in the finance and I had fallback positions anyway.

We were borrowing or I was borrowing 80 % of the purchase price. I had to pay full stamp duty. And then my other out of pocket costs, of course, were the buyer’s advocate, which I paid out of my savings and also any other smaller costs, which are generally like your conveyancing, any adjustments to the property, water, et cetera. So all up in terms of my costs to complete, if you were to sort of blanket rule, I would suggest that you just work off about a 6% the property value being all of your property related costs In terms of my deposit and how I paid for the purchase as I said, I was borrowing 80%. So 80 % is 344 ,000.

 

(09:41.284) And if you look at the cost to complete, it would have cost me about 450 to 460 ,000 plus my 11 ,000 buyer’s advocate fees. So let’s say I’m all in at 470 ,000 less the $344 ,000 loan. I needed to come up with 126 ,000. I didn’t have $126 ,000. So I actually borrowed some money from my parents. Originally, I asked them to go guarantor.

But they didn’t really want the risk of being guarantor particularly as they do hold a few properties But they could offload those at any time so they didn’t really want to be tied into that So instead we made an arrangement where I borrowed that money from my parents and I pay them interest on it And I’m paying that back over time. So I borrowed

 

(10:31.46) I borrowed, I think it was $70 ,000 from my parents. I actually should know this, but I don’t. And so I needed to put in about 56 grand of my own savings, which I had built up. So that was fine. So no lenders’ mortgage insurance. And I actually took out a fixed rate initially because fixed rate rates were really low. I took out a one year fixed rate because I wanted an offset account, which in hindsight was probably not the smartest move for me. 

I took out a one year fixed rate with ANZ because they offer offset on the fixed rate for one year. In hindsight, maybe not the smartest move. If I had have gone back then and looked at what the rates were, I definitely would have fixed for longer. I went with one year fixed interest only as well. And what I would have done in hindsight is gone for five years interest only with a certain amount of that time being fixed. So your interest only period doesn’t have to align to your fixed rate period. And for me, because I don’t plan on playing, I don’t plan on paying off that loan necessarily that quickly. 

In hindsight, I would have just kept it as interest only for longer, but we live in Lulean. So after the first year, it rolled off onto P &I variable rates, which meant that obviously my interest rate has increased since that time, as has a lot of people’s. So that gives you a bit of an idea of all of the purchase costs going in.

I then engaged a building company that we worked with as clients anyway to help me to look at the overall costings and the feasibility for the subdivision and the second dwelling. Now, when I bought this property, I settled in February 2021. I bought for $430 ,000 eight months later, so around December that year, the property had gone up 20 % already in eight months, which is significant for me not doing anything to it. In that first year to year and a half is where I achieved the majority of the capital growth and that is very, very true of what was happening in regional properties around Victoria at that time. 

So I had this huge uplift in value, which was fantastic, but at the same time that that was happening, building was starting to get more expensive slowly and I didn’t…

 

(12:46.628) quite have, I always had in my mind about a one to two year period before I would start the build. By the time that I went to do the build on that property, it actually was no longer feasible, which is a real shame because I had bought the property having completed an initial feasibility study on it, looking at, okay, the goal was either buy and hold the land as it is and just let that be a long -term investment. Option two was buy it, subdivide it.

Sell the back block or sell the front block and then build the second or hold. So if I subdivided and sold the front dwelling off, I would just have a vacant block of land that I could keep and eventually build on. The other option is to subdivide, sell the back block of land and hold my existing dwelling, which is receiving rental income. The other option was to subdivide and build the back and either hold both or sell both, which is effectively what we call like a mini subdivision, I guess.

A mini development where you’re selling them both at the end. That was ultimately my ideal plan going into purchasing this property. But as construction costs started to increase and we started to actually uncover some issues that were going to be quite expensive with the build, it no longer became feasible. Also, I was going to have to put in a fairly significant amount into the front dwelling to get it up to the standard that I wanted to sell it at. 

So realistically, I wouldn’t have made any more money out of developing that back block and selling them both as I would if I had have just sold it at its peak in 2022. So that’s where I started to play this game of like, I obviously wanna build it, but at the moment, the numbers are not working to stack up to a build. So I’m just gonna hold and see what the market does and see what I should do.

In the meantime, my ultimate goal was never just to have the one property. So in the meantime, what I actually did is as that property increased in value, and as I said, after eight months, it went up about 20%. After about just over 12 months, it was up 30%. I then got it revalued. I took out equity and I went up to again, 80 % of the value of the property once it had gone up in value. So we got it revalued eight months later at about 510.

 

(15:09.412) I’m just gonna check.

 

(15:14.148) 510 take away, 510 take away 430. This bit can be cut out by the way, 80. So then 430 divided by 80 divided by 430. Yeah, 20%. Cool. Yeah, so eight months later, we got a revalid 510. And then a few months after that, we had it revalued again at 550, which was amazing because that meant now I could access quite a significant amount of equity. We ended up getting close to a little bit over $100 ,000 out of the property. And I used that money plus some additional savings that I had built up over that period of time as well to buy my second property, which is my now home in Brighton. 

And that was ultimately my goal was to use this property as a stepping stone. Now I just want to place a huge caveat over this that I do not necessarily recommend this strategy for everyone. And particularly because I used my equity to buy an owner -oc, which is generally a little bit of a no -no. But for me, there was no other way that I was gonna be able to buy my owner -oc if I didn’t have some sort of additional boost in equity to cover more of that second deposit. 

So as I said, it’s generally a little bit of a no -no to use the equity to buy the owner -oc. But again, with this owner -oc, I knew that down the track, this had the potential to be an investment property for me. And therefore I was okay with the fact that I was gonna structure my loans in a way that when it became an investment property, I was gonna be able to maximize my tax deductions. So I bought a property in Brighton, which I was living in at the time. 

And ultimately I wanted to be in either Elwood or Brighton in that sort of vicinity. My budget was realistically under 900 ,000. If I could, I wanted to buy a minimum of a two bedroom, a two bedroom, one bath, or ideally two bedroom, two bath plus car spaces unit or villa units, ideally because villa units are definitely more detached and I wanted a backyard and I also, yeah, as I said, wanted to be under $900 ,000. 

We ended up purchasing for $970 ,000 because I could not negotiate it any lower. It was a villa unit in Brighton. It’s actually in its own little, so all of the villa units in the complex come off their own sort of separate driveway. So it actually feels like it’s in its own little street, which is really, really nice.

 

(17:33.86) There’s 13 units in the lot and I have a huge backyard for a villa unit. So that was really the selling point for me. Now funny thing about this, also the property had been recently renovated. So it was, you could literally walk straight in and move into it, no problems. The funny thing about the block when we looked at it was this, the backyard was not on title. So this is really key because a lot of these older style units, mean when they’ve been subdivided, the backyards don’t necessarily form part of the title, they’re actually common land. 

So I was super particular about the legal wording and the terminology of this and I did a bit of a deep dive of what that means, what are the risks for me, et cetera. So effectively in my contract, the backyard was set up as basically having an exclusive lease to me for 99 years. So what that effectively means, as long as I’m not doing anything illegal in the backyard is that it remains mine and people can’t just walk into it unannounced effectively or take it from me.

So it’s used for my exclusive what I have exclusive used to it, which is fantastic now I did also look into the ability to have the titles reject and that is also possible You can have the boundaries of the titles reallocated so that all of because it’s not just my backyard everyone in that complex their backyards are actually common land. So we can have the titles rigid to take back that common land and basically extend the boundaries of our titles to cover where the fences are. 

But then you’re looking at obviously a cost, which I would want to raise with the actual body corp or the owner’s corp and talk about what the impact is going to be then on each individual land owner. But also it’d be interesting to see what potential uplift that would have in value. Now, given that it’s on a 99 year lease, I wouldn’t say it’s necessarily that value is set in stone in terms of the price that someone would pay for it. 

But I definitely think it’s more attractive than it just being a piece of land at the back of your house that technically you don’t have ownership over. So I bought that property for 970 ,000, no stamp duty concessions or anything like that. So when you look at the overall costs to complete, you’re gonna be looking at around about $1 ,030 ,000 when we add on our stamps and all of our other costs.

 

(19:58.052) So I also took out an 80 % loan against this property.

 

(20:10.244) which meant that all up my costs to complete were 254 ,000. So I had to, I took out, I think it actually ended up being about 120 grand worth of equity out of my investment property. So that obviously went onto the deposit and therefore I was gonna be left with about 120 anyway, 120 to 130 that I needed to pay for my own savings, which I had been building up.

I didn’t quite have that much so I ended up taking some actually out of, this is probably a lesson in all of the things what not to do but I am going to explain to you how I got all of the right advice and I put all of the structures in place to make sure this was okay. I ended up taking a larger dividend from my company that year and that actually covered the remaining amount that I needed to then purchase the property.

So as I said, there are definitely things that I would have done in hindsight. I split my loan, which I was very, very thankful for. I split my loan. I went with the Commonwealth Bank because they had the best borrowing capacity for me at the time based on the way that I was earning income from my company. They also had a good, they also had a really good interest rate on the fixed rate at the time as well. So I took out a three year fixed rate on half of my loan and I took out a variable loan with offsets on the other half.

I really liked that as well because I wanted to have multiple offsets against my variable rate. And I like their banking app and I like being able to link all of my existing lending there. Now, after I settled on the property, which was July, 2022, yes, July, 2022. So about a year and a half after I bought my investment, we got the property revalued a couple of months later and it had gone up in value. We got it valued over a million dollars. So we took out some cash out against the property, and I was able to pay back the additional dividend or drawing that I’d taken from the company, which was great. But also I was able to get about 30 to 40 grand out of the property that I wanted to use for renovations on it as well. So I installed new flooring. 

I, which if you’ve watched my recent video on Instagram about my lessons learned in renovating your own property, I actually haven’t finished the flooring nearly two years later, but I installed my own flooring. I installed carpets in the bedrooms.

 

(22:27.396) I upgraded all of the window furnishings. I did look at replacing all of my windows to double glazing. It was gonna cost me about 25 grand to replace all of the windows, which was about six windows. I’ve got some really big, beautiful windows at the front of the property that I wanted to, the noise just travels straight through and there’s no real insulation. So I wanted to look at double glazing. 25 grand for me was a huge amount out of my renovation budget. So I wasn’t quite happy to come to terms with that.

I also needed to pay some money for waterproofing, which cost me about two and a half grand. And also changing over all of the lights and the electrical that cost me about three grand for the whole property as well. So the renovation is a slight work in progress. I also want to do my landscaping in the backyard as well, which I think is going to make a huge difference to the property. As I said, it’s quite a large backyard and I have a border collie, so I really needed that space. But the thing for me that I probably would have done differently,

I would have, to be honest, I would have fixed for longer if I had have known because I don’t really have any desire to move from this property immediately. But down the track, I will turn this into an investment or have the ability to potentially rent it out if myself and my partner do buy a property together. We may keep this as an investment or we may Airbnb it, we’ll see. 

There are definitely some additional renovations that I want to complete on the property. But one thing that I realized when I went into it is I went in very much with rose colored glasses and I wanted to do everything to the property. I wanted to basically create this beautiful dream home out of a $970 ,000 villa unit in Brighton and that just was not going to be the case. And someone actually said to me at one point, Evelyn, you’re trying to polish a turd. 

And I was like, I actually understand this. I know that’s like maybe a little bit harsh, but you don’t have to spend $100 ,000 on a renovation of something that’s not going to be your forever home. You can get it good enough and nice enough and livable and a really nice, warm and welcoming space, but it doesn’t have to be overboard and you can add to it over time. So that just really allowed me to pull back and go, okay, well, what can I do myself? 

What can I do that’s immediately gonna change the look and feel of the home? The window furnishings for me, so the curtains and the blinds was obviously a huge part of that. But I was looking at fully rejigging the bathroom and everything and the kitchen, which had all been recently renovated anyway. So they’re absolutely fine as they are. So that gives you a bit of an idea on my property journey.

 

(24:52.868) So I’ve still got my investment property in Geelong. As I said, I purchased that at the beginning of 2021 when I was 26, 25, 25 or 26. I don’t even know. And then I bought my own occupied home 18 months later using some of the equity that I had received from my investment property.

I had all the plans in the world to develop the investment property. At the moment, there has been a big price correction. I actually have it on the market for sale at the moment. I really wanted to get as a minimum 530 ,000 out of it through the sale. And we listed it between five and 550. Had I potentially put it on the market maybe six months earlier when it was at that peak, I probably would have got the 530 to 550 out of it. We haven’t actually had any traction under, we haven’t had any traction over 480 ,000. 

So there’s been a huge price correction in the Geelong area. I’m also very aware that that means that I’m potentially even over capitalized on that property at the moment as well. But you can see there with construction costs increasing, there is just no benefit in actually developing it at the moment. And because the way that we have sold it has effectively been positioned as a potential development site. 

I actually think that they may be not hitting the market and potentially something like a long -term family home or a long -term investment property that you hold is more attractive to where the market is at the moment as opposed to something with development potential because when you look at the numbers from a development potential perspective I would be breaking even if I continued to wait and not put money into any future development and maybe that price correction comes back up I’ll probably make a hundred thousand dollars out of it so yeah, you just got to weigh up those costs. 

And we ran a lot of different feasibility models. As I said, we also looked at the cost to potentially just subdivide and sell the blocks separately with still the plans of permits on the back. And realistically, depending on what we would be able to sell those for, we worked out if you sold the front townhouse, if you, okay, I’ll give you an idea of how this development process and structure all works.

 

(27:11.3) If you purchase a property for 430 ,000, all of your costs, et cetera, you’re all in at about 460. That’s not including my buyer’s advocate. Then you’ve got a whole heap of professional costs that you need to account for in terms of your engineering, your drawings, your architect, et cetera. Let’s say that comes to an extra 20 ,000. Then on top of that, you’ve got your council fees, you’ve got your subdivision fee, you’ve got your water contribution fees, electricity, et cetera. That’s gonna come to about 15 grand. Then…

Let’s say we put in a hundred grand to renovate the existing property and any other subdivision or related costs that you may need to get that all up and running. So all up in terms of costs, we are sitting at 460 plus 20 plus 15 plus 100. So that’s 595 ,000 in costs. Then you’ve also got to account for the initial interest that has been paid on the land since you purchased it. So that is going to be part of your development costs, which a lot of people forget. 

But let’s say our goal was sell townhouse number one, so front townhouse for 450 ,000 after the Renault and sell the back block of land for 250 ,000. That was going to give us $700 ,000 worth of gross realisation value or overall sales, less the agent fees, less the marketing, et cetera, was probably going to leave us with about 670 grand or thereabouts less your total development costs, which was sitting at about 595 ,000.

That then leaves you with a profit of 75 ,000. So we’ve got a profit of $75 ,000 from subdividing and selling both blocks, having purchased it for 430 versus a profit most likely of $75 ,000 at a minimum if the property is then sold for that 550 to 560 mark that we initially aimed to sell it for. So you can see when we started looking at the cost comparison of…

 

(29:15.428) doing the development, it wasn’t worth it for the risk and the potential further influx of construction related costs. So my goal now is to wait out the market in Victoria because I do believe that things will turn to see whether I then sell that property because the reason I do want to sell it is because it’s had that sort of initial boost of capital growth. I want to be able to now snowball those profits into other investments.

I also want to look at what I do with Brighton. I will likely rent it out in the future, but for now it has been a property for me that is obviously really suiting my needs as a home owner. With the profits that I do make from my Geelong property, I will immediately put those in an offset account against my variable rate on my owner op to help reduce the interest that has been charged there.

When I sell the Geelong property as well, the initial equity loan that I took out to purchase Brighton will be paid out. So that I don’t need to worry about anymore. So yes, it has cost me more to buy the Brighton property because I’ve taken out not only the 80 % loan against it, but also the $120 ,000 loan that I took out from Nour Lane. So those two figures together mean that I probably borrowed about 90 % against my own rock overall, which, as I said, is not a strategy necessarily for everyone, but I’m in the growth phase of my wealth creation. 

And for me, that was suitable at the time. And I knew that if it became an investment, I was still going to be able to maximise my investment potential by not paying off the loan, but by putting my additional sale proceeds into the offset account. So that is my property story.

If you do follow me on Instagram, you may see that we’ve been renovating a property out in Walberton at the moment that’s actually owned by my partner. I’ve done all the financing and everything for it, but it is actually owned by him. So I haven’t obviously brought that into my personal property journey because these are the two properties that I own in my name. If you have any questions or if you found this episode valuable, I would love to hear from you. It definitely, I guess, shows that we don’t all get it right, but I have

 

(31:28.644) had huge benefits and huge rewards out of being able to buy these properties, I guess, under my own name and with my own funds. And I think that that’s something that everyone should be really proud from. And you just take the lessons that you learn from it and you apply it to the next one. So yes, there’s definitely things I would have done differently, but the biggest thing by far that I think has been a key benefit for me is getting the first purchase right gives you so much potential on the next one.

The hardest thing about getting into the market is the deposit. The hardest thing about buying the next one is making sure you’ve bought the right asset first to be able to give you some sort of equity contribution to buy the second one. Because once you’ve got one deposit, you can generally snowball that equity onto deposit number two, deposit number three, et cetera, et cetera. And that’s why we see a lot of people in that rent -vesting game. And I absolutely could have rent -vested if I wanted.

But this property came up with the backyard in Brighton that I really wanted. It’s a 10 minute walk to the beach. And it was a no brainer for me at the time as well. I’d also been jumping around rentals for a while and I just wanted my own place. So you’ve got to take a combination of a lifestyle approach, but also a smart investment approach and find the combination that works for you. 

But just know that sometimes the initial plan doesn’t always work out such as the development and it’s really important to be able to pivot and consider your options and also have fallbacks in place. If the first plan doesn’t go to plan, what can you do? What buffers do you have in place? No one expected the interest rates to go up as much as they did. So have you got contingencies there? Are you buying under your means to make sure that you’re not over capitalizing yourself? All of those sorts of things.

So as I said, I really hope this has been a valuable episode. It is obviously quite a personal share, but I think by sharing information about property and about wealth, we can make sure that these conversations are more spoken about. And it’s not something to shy away from. We should be celebrating our money wins and our wealth creation wins. Outside of property, I have also started investing in shares and in

 

(33:40.804) crypto, so I’m really trying to now diversify my portfolio and just commit to a small amount. I just invest $50 a week every single week into my share portfolio. And that is something that I’m going to do for a long time. For me, that is not a fast approach. With property, I’ve been a bit more active, I guess, when you look at trying to develop that first property, whereas in the share space for me, I’m just going to sit and figure that I didn’t even look at the balance of it. That’s just going to keep going until I’m 70 or whenever I decide to take it up.

So there you have it, that is today’s episode. Thank you so much for listening. If you enjoyed the episode, please share with your friends or family. As always, we’re always here to ask any answer, any questions. And otherwise we look forward to speaking to you all next week. See you later, everyone.

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