Many people say experience is the best teacher. And you have to be prepared to make mistakes in life so you can learn. The problem is, making mistakes in property investment can be very costly – whether that’s buying the wrong property at the wrong price or taking on too much debt.  

The good news is that property investment is a popular way of building wealth in Australia. So there are plenty of inspiring investor stories out there with takeaways you can use from their success. 

Take our director, Alex Veljancevski’s story, for instance. Alongside being a multi-award winning mortgage broker, Alex is also a successful investor with eight income-generating properties in his portfolio.

According to Australian Taxation Office statistics, only 0.9% of property investors have six or more investment properties. So how did Alex do it?  

How Alex started his wealth-building journey 

Alex’s story begins in 2006 when he was just 16. After spotting a gap in the market, he established an online electronics business which quickly became profitable.

Three years later, he’d saved up enough money to put down a 20% deposit on his first investment property. However, Alex was now a full-time university student with a part-time job. So he needed to find a property as close to cashflow positive as possible. After doing his research, he found a three-bedroom apartment in the Sydney suburb of Liverpool, for $342,500.  

The rent was $400 per week– giving him a rental yield of 6%. As the rent covered his principal-and-interest home loan repayments, he was only out of pocket for the utilities, council and strata bills.

Thanks to the strong rental yield and the ongoing success of his online business, Alex was able to buy his second investment property just six months later. This was a three-bed penthouse apartment in the same complex, priced at $361,000.

How Alex grew his portfolio from two properties to eight

In 2014, the two Liverpool properties were valued at $600,000 and $650,000 respectively. Alex refinanced the properties so he could access this increased equity, and add to his burgeoning portfolio. 

However, the Sydney property market was now in a sustained upswing. This meant rental yields had dropped as values shot up. So Alex decided to look further afield. He eventually settled on the Moreton Bay and Logan regions in south-east Queensland, as both areas boasted low vacancy rates and high rental yields. 

Alex bought six freestanding properties ranging from $260,000 to $370,000.

While these Queensland properties had only modest price growth in the initial years, Alex wasn’t worried. He knew from past experience that property is a long-term investment with peaks and troughs.

What’s more, most of his investment properties were cashflow-positive – bringing him in more rental income than they cost to hold. 

Following the recent property boom, Alex had the Queensland properties revalued. All were approximately 30-40% higher than the original purchase price.

The top 7 lessons Alex has learned

 Building a property portfolio is a dream few investors achieve. So what were the key lessons Alex learned along the way?

• Investing in property is a long-term game – so be patient

• It’s almost impossible to time the market – so focus instead on buying when you are in a financially sound position to do so

• Purchase property with strong rental yields – so your holding costs are manageable

• Buy properties in areas with increasing sales activity, and which are close to amenities and infrastructure – so you maximise your chances of capital growth

• Look for suburbs with low vacancy rates and a low supply of rental properties – so you maximise your chances of attracting tenants

• Have a financial safety net for unexpected expenses  – so you can always pay for emergency repairs

• Partner with the right professionals  – so your goals and strategies are aligned from day one

How a good broker can help you build a property portfolio

When you’re a property investor, the support of a good team of professionals is invaluable. And one of the key members of this team should be an expert mortgage broker, ideally with their own investment experience.

That’s because there’s much more to a broker’s job than just comparing interest rates. A good broker will also structure your loans in such a way that they work with, not against, your long-term investment goals.

For example, many lenders prefer it when multiple properties are used as security for an investment loan. This is known as cross-collateralisation and gives the lender greater control over your assets – which is great for the lender but dangerous for you.

A mortgage broker with investment experience like Eventus Financial can make sure all your loans are standalone – rather than linked to properties across your portfolio.

Then there are tax deductions, which you should maximise wherever possible. At Eventus Financial – which has been recognised as one of the best brokers in Sydney – we can work with your accountant to structure your loan in the most tax-efficient way possible. For example, we can create sub-loan accounts allowing your accountant to clearly identify what interest was charged on a particular property.

Schedule a no-obligation consultation with Alex to find out how Eventus Financial can help you with your property investment journey.