Gen Y couple ‘rentvested’ their way from $15K to $10m

Yes it does get easier ....you have done the hardest yards already!
The first $100k took a long time then the first M about the same time as the first $100k looking at maybe 4-5 years for the second M

 

I agree... I just have to start buying commercial!

 

Scott, well done to you.

Do you self manage or outsource to a number of property managers, or a bit of both?

And, either way, what has been your experience?

Further, do you think @Simon Hampel has a bandwidth and/or hosting bill that could do with a bit of help on his frugal endeavour to educate us ever knowledge-hungry PChat souls on our journey to income nirvana?

Merry Xmas and well done to you and your better half.

TV.

 

Great thread.

 

@Scott O'Neill
Congratulations on your achievements so far. A large asset base with a solid amount of equity which makes a nice change.

What really impressed me was the way you handled Koshie when he was carrying on like a d*%k. Your strategy and advice were sound despite Koshie's attempts to derail you with the mind-numbing idea that debt is bad and the usual housing bubble bla bla....

Love your work.

 

I don't like Koshie at all.

 

I didn't see the interview. By the sounds of it, I am glad I didn't.

 

Hello everyone,

Thank you for your questions and interest in our investing story. It’s great to be surrounded by like-minded investors who love what we do as much as we do.

A few points below to help answer your questions:

Property Management – We used to self-manage 15 of our properties when we were living in Port Macquarie. At the same time, I was doing an MBA, driving from Port Macquarie to Sydney about 40 weekends a year and I was undertaking most of my own maintenance, whilst maintaining a full-time job. The pros were that we were saving a lot of money and gaining valuable experience with people and trades. The cons were that we were especially myself, extremely time poor. We spent weekends sanding floorboards, replacing kitchens, painting walls and dealing with tenant issues. These frugal days offered great experiences, but as the workload grew it was not viable to continue down this path. In fact, it nearly killed my passion for property investing. Passing on all our rental management back to the professionals was the best thing we ever did, because it allowed me to spend more time doing what I was best at – searching non-stop for the next perfect property.

Serviceability – Yes, it is harder now as we all know. What has helped us keep going is firstly, keeping the LVR lower, secondly not having kids or a PPOR debt and finally, our $660,000 rental income. Having a $660,000 income on a $6 million debt is healthy. The banks have always been impressed with the numbers, thus granting us the loans. Having said that, one in five loans we ever applied for has been knocked back. The lesson is never accepting the banks answer. Go and find another bank or work out another angle (e.g. Citibank didn't want to lend me money on a house over the age of 40 years lol!!).


Strategy – I have always found it difficult to avoid the temptation of chasing the next capital growth hotspot with poor yields attached. Thankfully, I have remained true to my old minimum 6% yield requirements for every property (other than Maroubra, which was a PPOR at the time & Clontarf, which we are converting to dual occ). Sticking to higher yields, meant we could buy more properties compared to others who went for the sub 4% yield route. The way I see things is property doubles every 12 years in Australia (well it has for the last 30 years at least). So, if I can buy a $500,000 property and hold it for 24 years, that property will be worth $2 million. So, following this simplistic trend, I think it’s wise to position yourself in the market for the long term, never be forced to sell and having high yields will improve the chances of you holding for the long term.


Next Steps – Mina and I plan to keep building our portfolio, but also slowly reducing our LVR. We have no serviceability walls on the horizon yet, but we are not looking to expand blindly or as fast as possible. It might sound a little corny, but we much prefer helping others find great properties. Therefore, our business will be the priority for 2017.


Thank you for your time in reading about our story and I hope you all have a merry Xmas and a successful 2017!


Scott O’Neill

 

Awesome work @Scott O'Neill and thanks for taking the time to share. It's always valuable to have insights into how people have developed their strategies over time.

 

Only one word for it @Scott O'Neill ... WOW!!!

I have only just started on the journey, at the opposite end of life to yourselves, and can only wish I had the foresight you and Mina have had.

Cheers,
Scott

 

Hey Scott, don't you find it ironic that one day you'll be able to drive from Port up Point Plomer Road to retire in God's Country at Crescent Head?

TV

 

You have a great net rent to interest cover Scott !

2.1 ratio (Net rent Approx $510k interest approx $240k)

The banks like over 2 times cover