Adrian started investing at the age of 19. Nine properties later, what advice does he have for others wishing to follow in his footsteps?
“I’ve learnt a lot since I started investing in property, but if I had to whittle it down to a short list, it would probably go something like this.
1. You don’t need a high income to start investing, you just need to start by purchasing property that suits your income. When my brother and I started investing, I was just 19 and we both had low-income jobs. We couldn’t afford to purchase anything in close proximity to the Melbourne CBD, so we chose to target a townhouse in Frankston, a suburb with a rough reputation but with solid fundamentals in place that allowed us to enter the market for under $250,000 and see sustainable gains over time.
2. It’s not about timing the market, but time in the market. The sooner you can start investing comfortably with a view to holding long term, the better. By the time I was 24 and started really focusing on investment, I was already able to reap the benefits of equity resulting from a six-year hold.
3. Joint ventures help you get started, but they’re not necessarily a sustainable investment plan. If I hadn’t had my brother to motivate me to save and invest, and to go halves with me on each deposit, I probably still wouldn’t have any properties to my name. But joint ownership has the potential to significantly limit your lending capacity in the eyes of the banks, a major factor behind my decision to finally go it alone.
4. You don’t get to purchase property without sacrifice. Much of my twenties was spent sacrificing the luxuries that my mates would enjoy. I didn’t holiday overseas, I didn’t get personal loans, I didn’t finance a new car purchase. If I’d done those things I never would have made it to where I am today, but at the time sacrificing those luxuries felt like a lot of hard work. In hindsight though, things definitely get easier if you put the hard work in early.
5. Make sure you’ve always got a good buffer in the bank. There’s no use working hard to buy property if an unexpected event puts your entire portfolio at risk. Luckily the worst we’ve had to encounter thus far is replacing a leaky roof, but investing without savings in the bank is a risk I’m just not willing to take.
6. Hiring the right people is essential to the success of your portfolio, regardless of the short term-cost. Just because you’ve saved the funds to invest, it doesn’t mean you’re an expert. A good property manager and a good mortgage broker are a must, for example. But you should also consider enlisting professional help to assist in finding a property.
By the time I was ready to go it alone and purchase without my brother, I was looking at properties worth a lot more than my initial purchases, and it finally dawned on me just how much was at risk. When I was going to invest $750,000 on a property in Moonee Ponds, I wanted to really make sure I was making the right decision. I wasn’t prepared to go into a purchase hoping that good luck would prevail, so I interviewed a lot of buyer’s advocates and eventually settled on someone who really felt right and helped ensure all the boxes were ticked.”