I have a long-term property investment plan, but it doesn’t necessarily mean it’s a time-consuming plan. Small consistent efforts over a long period of time add up to big results.
In his early 20s, Will was in a career that left him uninspired, and as he set to the task of considering different options, he started reading about property, having always had an interest from a young age. After consuming a significant number of books in a very short period of time, he realised this was something he was truly engaged with. So, he studied a Masters of Property Development, secured his first job in the industry, and started saving towards his first investment. This journey eventually led him to Ironfish.
“The Ironfish culture is incredibly supportive. It’s fantastic to be surrounded by a group of colleagues who are passionate about what they do and most of whom are active investors or working towards their first purchase. Investing does have its challenges and everyone questions their investments from time to time; whether the hot water system needs replacing or a tenant moves out – there’s always a reason to want to get rid of an investment. But having the positive reinforcement and encouragement from people around me is quite powerful and acts as a strong reminder to hold onto property long term. Consistent and ongoing education is so important too; as a group, we’re constantly exposed to education on the markets along with long term investment strategies. Having this consistent messaging is very motivating.”
Once Will decided to make a start as an investor, he was committed to saving to achieve his goal. He was fortunate enough to be living at home, and by making some compromises and saving hard, over a 2-year period, he managed to save enough for his first deposit.
“I think for many people there’s always going to be a reason not to invest. A perceived time in the future when you’ll have a bigger salary to afford your preferred suburb, or build your deposit faster, or think that prices will be cheaper in the future somehow, but the time to act is now. The longer you leave it the harder it will become and the sooner you act the more benefit you will gain over time. The first investment is definitely hardest, but it is not something you will regret in the future.”
Will’s investment journey began with the purchase of an apartment in the Sydney suburb of Lane Cove, which he lived in initially, but has since rented out.
“Lane Cove is a great investment opportunity, but for me personally it wasn’t where I wanted to live, so I decided to become a rent-vestor – investing in areas I decided would outperform the market while renting in a suburb I wanted to live in. I think there’s a lot of people who don’t understand the concept of rent-vesting and this limits their investing potential. It’s really about education and understanding that my tenants pay the bulk of my mortgage, therefore my personal cashflow contribution to hold the investments are minimal, allowing me to also pay rent. One of the best benefits of rent-vesting is the flexibility it gives me. Since becoming a rent-vestor, I have lived in different areas and properties that suited my lifestyle at that stage in my life.”
For his second purchase, Will again started looking around Sydney, because it’s what he knew and was comfortable with, but after many months of looking, he realised it was simply unaffordable for his budget.
“One day it clicked – I had to look elsewhere. Emotionally, I wanted Sydney because it was familiar. But when I realised I couldn’t afford it, it was suddenly very simple. Within a month I had identified South East Queensland as a great area to invest and subsequently bought in the following months. Buying interstate is a hard concept to grasp initially, but once you’ve made the decision to invest somewhere that isn’t your backyard, it’s easy. This is a key step, and is crucial to ensure a diversified portfolio.”
Will says it’s important to understand that property is a long-term wealth strategy; it’s not something that happens overnight.
“I actually have a 30-year plan, which I put together as a direct result of being at Ironfish and going to (Ironfish CEO) Joseph’s workshops. It’s all well and good to be saving and investing but you need to have a clear idea of what your end goal is and it’s important to put a time frame on it. This helps to keep you motivated, knowing one day you will enjoy the fruits of your labour. The 30-year plan sounds intimidating but it’s really pretty simple: it’s just about making regular efforts over the long-term. And of course, everybody’s goals are different and can be achieved in different time-frames. It’s important to write your goals down and determine when you can achieve them by – it may be only 5 or 10 years.”
Investing in property gets much easier over time, explains Will. You may need to make an adjustment to your lifestyle to save up for your first deposit, but that creates positive habits around saving. Plus, there’s also what he describes as the “snowball effect”.
“If you buy your first property and it grows in value, it will give you the capability to buy your second by refinancing. If both properties perform you can potentially refinance again and buy another 2 properties, so you will then own 4. This is a simplistic demonstration, but it illustrates that investing in property can get easier over time and the effects compound and become much more dramatic.”
Will’s property investment tips:
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