I started my journey as a part time property investor three years ago with the support of my wife.
Prior to this point in time, where I decided to invest in the Australian property market. I spent a lot of time researching property investment.
I read books, listened to podcasts, went to seminars, researched the internet and attended loads of open homes.
The Australian property market has really been something that has excited me and it’s the passion I have developed that drives me. In this short three-year period. I have purchased the following properties:
1 Residential House in Dean Park NSW (Rental)
1 Residential House in Lalor Park NSW (Owner Occupied)
1 Residential House with a detached Granny Flat in Eagleby QLD (Both Rented)
My approach to purchasing these properties has been quite simple. I have gravitated to more of a neutral or positive geared setup from day one and I have created a team of professionals that assist me in the purchasing of properties.
What is Positive Geared?
Positive geared property is where the property you have as an investment, generates a return after all expenses are paid for. This profit generated is subject to your nominal tax rate.
A simple example:
You take a rental income of $25,000 for the year and your expenses including things like rates, agency fees, repairs, investment loan interest, total $20,000. You then have a positive income of $5,000 for the year.
Why do I Prefer Positive Geared Property?
After extensive research I decided that my approach was to hold for the long term. The long term in my case being forever. With this being the case it is a strong belief of mine that the property purchased, should not be sold and turn into a passive cash generating machine. What I mean by this, is that after the property debt is paid down I will have multiple income streams for life. These income streams will replace the need to work.
I have adopted this strategy because in my opinion it carries very little risk. I only buy properties in capital cities which ensures vacancy rates are low. I need not contribute cash from my pocket each month to hold the property. I actually have an increase in my yearly takings as from day one any additional profit from the property is an addition to my income.
Will I Continue To Buy Properties?
Yes, most certainly. I’m actually in the process of purchasing another property at the time of writing this article. It is a strong belief of mine, that I will be saying in 20 years I’m glad I bought that property. At age 31 I have seen so many people in an older age bracket say: If only I had bought that property, held on to that property or bought some more property. I live in Sydney and am yet to hear of anyone who has bought in a capital city 20 to 30 years ago, say I wish I hadn’t bought that house. With that being said, I am hedging my bets on in 20 to 30 years, saying I’m glad I bought those properties.
Biggest Words Of Encouragement
The biggest words of encouragement I can offer is: Don’t wait for too long, the perfect property or right time may never come. Buying investment property requires making a purchase whilst removing all of the emotion. When you buy property you want to go into it with an open, creative mind and know that it all comes down to the numbers.
One last thing to note is, get yourself a well-paying job. I am very biased towards the sales and marketing industry as it has served me very well. In every purchase I have made I have saved the 10% deposit and stamp duty costs. Though if your wage does not sustain this ability.
You should either look for ways to increase your annual income or use your current property and the banks to leverage into each property.
Blake Hooper is an entrepreneur, sales and marketing coach, with a love for part time property investing.
What can be learnt from Blake’s journey?
Dean Mico summarises what can be learnt knowing Blake and his “better-half” Peta…
1. Blake made a decision to get into property investing
2. Blake educated himself and still does
3. Blake took action after making a decision
4. Blake built a team of trusted advisers around him
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.