Serious property investment is no longer the province of more mature investors in their mid-30s to late 40s, looking at other avenues to build their wealth.
Increasingly we’re seeing significantly younger investors enter the arena – people in their 20s who have completed their tertiary education and are determined not to delay their entry into the property investment market.
One such investor is one of our clients, 25 year-of-old Natasha Choi who already has four properties in her fast growing portfolio.
An investment lender with Melbourne based Australian Lending & Investment Centre (ALIC), Natasha embarked on her property investment odyssey in November 2012. She was 22 at the time.
With the help of Property Performance Advisory Director Phillip Almeida, Natasha acquired her first property on the outskirts of Geelong in Victoria. Determined to purchase something ‘closer to home’ and not buy interstate, she settled on a three-bedroomed home on a large block.
At $300,000 it made for a fantastic ‘first’ investment as it didn’t leave her highly geared. Although it didn’t have enormous capital growth prospects, it would provide her with the opportunity for further development down the track. Another big plus was the fact that it would be a solid rental property, allowing for a more than satisfactory yield.
Buoyed by the confidence of her first investment and ready to spread her wings interstate, less than a year later she purchased an apartment near Sydney’s CBD. Given the strong performance of the Sydney market, within eight months of purchase, the property had already grown in value by 8 per cent. Currently it is 21 per cent up on its purchase price.
The equity from this property enabled Natasha to purchase a townhouse within a close radius of Brisbane’s CBD.
In 2014, at the encouragement of PPA she purchased her second Brisbane property – a house very close to the city centre. The latter grew by 10 per cent in just 10 months.
A sound strategy has been key to the successful performance of her property portfolio. This included investing in capital cities enjoying strong capital growth and balancing her portfolio with a mix of houses and apartments across multiple capital cities, avoiding the temptation of investing in the Melbourne market only.
This approach has paid off. On top of continued growth, her properties have also proved to be wonderful rental vehicles given their proximity to cities and the buoyancy of the rental markets in these locations.
Natasha’s advice to other would-be young investors: