Continued from Part 1:
IP 3 - Kingston QLD - 2015
Property Type: House with 3 bdrm, 1 bath and 2 car.
Price: $215K
Reno cost: $20K
Reval at the time was $280K. Worth today $350K
Rent: $330 pw
1. Property Forums
I took to the property investing forums and read so much content. I took stock of what people were saying, where they were buying and I then went off to do my own research.
Learning:
I quickly learnt that people on these forums were generally ahead of the curve when it came to property investing.
Also, a lot of the members were either seasoned investors with huge portfolios or professionals who had serviced the industry over many years.
Everyone had so much knowledge and what I loved most about it all, as they were willing to share it all!
2. Buying an interstate
This was a real mental challenge. I owned two properties in my own state, which I could drive to if I really had to. However, buying in another state, some 900kms away was next level.
Learning:
After speaking with my broker about this, he asked me what would be the worst-case scenario?
I then answered it myself by saying “well, I guess the worst case would be I fly to Queensland and do whatever needs to be done”.
He then asked if I had good property managers, would I still need to do that?
My answer was no.
I came to realise that if I ‘rinsed and repeated’ the learnings from my Orange property, then I would have nothing to worry about.
3. QLD contracts
What I really liked about buying in QLD, was the way that their contracts are set up to favour purchaser more. This was very different to NSW because those tend to favour the vendor.
Learning:
In QLD, depending on the conditions, you can have a second go at reducing the originally accepted price or use a condition to exit the contract without losing your cash.
Some common conditions include subject to finance approval, building and pest report, strata report, pre-settlement inspection etc.
This is why QLD contracts generally give more power to the buyer - there is more flexibility.
IP 4 - Browns Plains QLD - 2016
Property Type: House with 3 bdrm, 1 bath and 2 car.
Price: $250K
Reno cost was $50K
Reval at the time was $330K - Worth today $350K.
Rent: $330 pw
1. Material issues whilst renovating
I hired a sole trader builder who operated by himself. During the renovation, he told me that one of the rooms had a lot of loose electrical cables stored in the roof from the original build. These had to be removed he told me because it was dangerous.
Learning:
I naively took his word at face value, never questioned it and never asked for photo evidence of it.
In hindsight, I wish I had now asked for evidence of it because to this day I don't know if that really existed or not.
2. Renovations: New or second-hand appliances?
Through renovating the 4 properties, there were a number of times I bought second-hand appliances.
Learning:
If you can afford it, it is just way better to buy brand new appliances whilst renovating.
Don't cheap out and buy second-hand.
The risk with buying second-hand is it you don't know what the previous owner has done with it and the shelf life of the appliance won't be as long...plus it's not covered by warranty.
Since all the renovations, I've had a few occasions where I had to replace second-hand purchases, which just cost more money…It’s not worth it!
IP 5 - Kippa-Ring QLD - 2017
Property Type: House with 2 bdrm, 1 bath and 2 car.
Price: $328K
Reno cost was $15K
Reval at the time - never did it. Worth today: $375K
Rent: $330 pw
1. Long Term Value Add
One of the reasons I bought this place was because the large garage was legal height and had the potential for another bedroom making it a three-bedroom house. I never had the plans to convert this with my immediate reno but it was more a long-term plan.
Learning:
My learning here was, to look for options to add value when inspecting properties.
You may be surprised by the number of people that overlook these things and it's always good to keep this in mind when inspecting.
2. Limited floor plan in the kitchen
This house had a small-sized kitchen to work with and I wanted to make it bigger.
Learning:
To his credit, my builder and I came up with a strategy to split the cabinets by bolting some into the ceiling and the remainder into the floor (after demolishing the old kitchen).
This maximised space and didn't interrupt the view into or from the kitchen either.
My three biggest learnings
Throughout this journey, I've learnt way more than what I've shared here...however, these are my biggest three learnings.
1. Education and taking action
It's all good and well to educate yourself and know the ins and outs of buying property. However, nothing truly starts, until you decide to take action.
My recommendation is to speak to as many people as you possibly can.
Speak to those who weren't successful, those who were successful and learn from their experiences.
Speak to as many people as possible.
2. Relationships are keys to success
Part of having a lot of success in anything is having good relationships (as they say, ‘it’s not what you know but who you know’).
This transfers to property investing too. I cannot stress enough how important it is to have a ‘good team’ around you. Select an accountant, solicitor, builder, mortgage broker who all have a vested interest at heart.
I personally went out of my way to make sure that I hired these professionals on the basis that they were property investors and they are also good at their core job too.
This means I could lean on them for property advice but also their main job.
3. Meeting like-minded people face to face.
The biggest learning and message that I have for anyone reading this is, you have to meet like-minded people face to face!
When I discovered the forums, I would direct message the people who had done what I was wanting to do and asked for their time over a coffee.
Why? So I could glean information. Online has its word limits, missed details (like this post) and emotion.
Everyone has their own experiences and I was determined to find those pearls of wisdom.
If anyone is serious about learning or building a property portfolio, I’d recommend doing this!
Finally, I’d like to take this opportunity to thank my mortgage broker and mentor. Without his guidance, wisdom and patience, I can’t imagine where I’d be today without it. Thank you so much!
Thanks everyone and if you have questions, feel free to ask in this thread and I will do my best to get back to you.
Cheers,
Morgan.
