If you are a young Australian fresh out of university, what do you usually plan each week? While most people at that age are getting ready to painat the town red every Friday night, twenty-year-old Robert Marsden Petty is busy thinking about something else: property investment.
The young Perth resident already has three investment properties under his belt. His third conquest, a two-bedroom apartment in Hyde Park, Townsville, is now pending settlement, and he is looking forward to it.
Robert’s Way to Property Investment
How did he accomplish all this at an early age, and how can his process help you start investing? Robert imparts seven useful tips based on his experience and growing expertise in the world of property investment:
Tip # 1: Get family assistance
Asking financial support from your family can help you jumpstart your investment property aspirations. At age 18, Robert bought his first property when his mother gave him $60,000 so he can start investing. It was a three-bedroom house located in Elizabeth East, South Australia, which he got for $237,500. This may not be everyone, but saving up for a substantial deposit can take some time and for an 18 year old investor, if the situation allows it, asking for some help is a great idea.
Tip # 2: Find guidance from a trusted investor, but trust your research as well.
Robert credits his success to his mother, an experienced property investor who has been constantly buying and selling homes since Robert’s childhood days. “My mum was big on investing when I was a kid,” Robert says. “I changed schools a lot as we’d always be moving somewhere new.”
As a result, his mother’s passion and penchant for property investment paved the way for Robert’s own interest in the real estate industry at a very young age. With the guidance of his mother, his knowledge grew. In addition to that, his years of living in a suburb also made him confident in growing his property portfolio despite rapid redevelopment in certain areas.
Robert didn’t stop with his first property. “When I understood how everything worked I was ready for the next one,” he says. Just five months after his first purchase, Robert bought another house on a huge parcel of land, also located in Elizabeth East.
Tip # 3: Develop the habit of saving and working hard
To fund his second property, Robert used a portion of the equity he received from his first house. He bought his second property at the price of $222,000.
As for his third investment, he chose Queensland to take advantage of the lower price of available investment property for sale. He bought an apartment for $95,000, a price considered under market value. It was a good investment despite the cheap price; the property has amazing ocean views and the weekly rental appraisal is $180.
In addition to that, he also works in the hospitality industry. His job as a cook in Perth earns him around $65,000 annually, providing a steady flow of money to support his expenses and savings. He says, “I feel confident about my investments and I’ll work long hours to come up with the money if necessary. I don’t go out as much as other people.”
The lesson to be learned from this is that hard work is necessary to achieve your investment property dreams. While family assistance is a huge help when you are just starting, it is up to you to save as much as you can to get the financial freedom you need to fund your future investments. Look for affordable properties too; just because they are cheap, it doesn’t mean they can’t be great investments.
Tip # 4: Explore beyond your backyard
Another reason Robert chose Queensland for his third property is to diversify. He recognises that there are great opportunities outside the usual places, and he wants to capitalise on properties and areas that have been underutilised as they are found “at the bottom of the real estate cycle.” After all, Australia is home to a plethora of suburbs; it pays to look into your options across the country. With housing affordability being out of reach for many in Sydney, investing interstate is a great idea for many. In Victoria or Queensland you can purchase a similar investment property for sometimes less than half the price in New South Wales.
Tip # 5: Make use of the Lenders Mortgage Insurance.
Do your research and take advantage of the Lenders Mortgage Insurance (LMI) when you can. It lets you purchase properties in less time, and it can also be tax-deductible.
Tip # 6: Plan every aspect and examine worst-case scenarios.
Robert recommends designing a plan for your property portfolio. This includes thinking about worst-case scenarios, and figuring out ways to overcome them, should the situation arise.
Tip # 7: Dare to push boundaries and be creative.
What sets Robert apart from other investors is that he didn’t take the traditional way to property investment. Instead of aspiring to buy a home for himself first, he chose to make his first house an investment property. This is becoming a very popular trend as younger people want to still invest in property but are not willing to sacrifice their inner city lifestyle quite yet.
Robert also dreams big, and he has huge plans for his investments, considering development possibilities in the future. Additionally, Robert gets creative by renting out individual rooms to further grow his income, rather than choosing only to rent out the property. This mindset helps Robert have a positive outlook for his growing property portfolio.
How We Can Help You
Inspired by Robert’s story? If you want to start your own property portfolio, iBuildNew can help you seek out ideal real estate properties for investment in Australia. Browse our wide selection of house and land packages, home designs, and investment options to compare properties and find the right one for you. If you would like to talk to an expert about how to get started, call us on 1800 184 284 or book a call online.
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