At 25 years of age Natasha Choi is one of Australia’s youngest female investors, already boasting four properties in her fast growing portfolio.
The daughter of emigrants, who settled in Australia in the 1980s, Natasha’s decision to invest, grew out her desire to one day own her dream home. Wealth accrued from an effective property investment strategy would provide that pathway.
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.
ALIC is a financial brokerage specialises in assisting investor clients structure their loans correctly.
Although Natasha shares her property portfolio with her long-time partner, she is very much the one driving the investment decisions.
With the help of Property Performance Advisory, Natasha acquired her first property on the outskirts of Geelong. Determined to purchase something ‘closer to home’ and not buy interstate, she settled on a three-bedroomed home on a large block.
Say Natasha: “At $300,000 it made for a fantastic ‘first’ investment as it didn’t leave me highly geared. Although it didn’t have enormous capital growth prospects, it would provide me 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 5km from 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. Brisbane is currently one of Australia’s top capital city performers.
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.
Natasha strongly believes that a sound strategy has been key to the successful performance of her property portfolio. “PPA has not only encouraged me to invest in capital cities enjoying strong capital growth but also to balance my portfolio, selecting a mix of houses and apartments across multiple capital cities, avoiding the temptation of investing in the Melbourne market only.
“Their recommendations have truly paid off. On top of continued growth, my properties have also proved to be wonderful rental vehicles given their proximity to cities and the buoyancy of the rental markets in these locations.”
What is her advice to other young women?
“Get in early,” she says. “Don’t wait until you’re married or have children. Ideally start thinking about investing as soon as you draw your first pay check. Being young gives an extended horizon and time to ride out any risks.
“However don’t just jump in wildly. Do your research, know what you’re buying and find out where the growth markets are because gone are the days when you grew your wealth by buying any old property, hoping it would go up in value.”
She says taking on some debt to buy assets is not a bad thing, provided you understand and manage your cash flows effectively.
“This comes down to understanding how much risk you are prepared to take and implementing risk minimisation strategies such as locking away a portion of your loans at a known rate, knowing exactly where your money is going from the moment it hits your bank account, setting a minimum rental yield when starting your property search and understanding the running costs of your properties.
“If you manage these things effectively, you will quickly discover that having an investment portfolio does not require you to forego nights out and that holiday overseas. You can absolutely have fun and grow your wealth at the same time. I do.”
Natasha also strongly advocates working closely with a professional in the industry and not going it alone. “For me, it’s been PPA which has been by my side every step of the way – advising me, helping me select and purchase the best properties, then regularly reviewing the performance of these properties, ensuring they continue to perform.
“Get over the fact that you will need to pay advisers a fee. In the scheme of things it will be money well spent when a few years from now you your portfolio adds another $200,000 to your personal wealth.”
Finally, she says, view investing as purely a business transaction. “Don’t allow emotion or attachment to get in the way. Treat it as a business, run it like a business!”
She also recommends that women investing – be it with a partner or on their own – remain involved in the decision making process. “Don’t devolve all responsibility to your partner or your adviser. Remain a critical part of the process: meet with your lender or buyers’ advocate, ask questions, challenge advice and most of all, build up your knowledge base – you will only be a whole lot wiser for it.”
Women increasingly driving property investment decisions
Gone are the days when women took a back-seat to building wealth by investing in property.
According to nationally based property investment advisory service, Performance Property Advisory, the profile of its burgeoning customer base (over 2,000 investment clients) has changed considerably over the past two years, with the number of women taking the drivers’ seat on the investment front increasing by a remarkable 40 per cent.
This equates to a quarter of PPA’s client base.
Performance Property Advisory is a nationally based advisory service dedicated to helping time-poor professionals, business owners and entrepreneurs develop and manage high-performance residential property portfolios.
According to Principal and Director Acquisitions, David McMillan, this growing cohort of female investors is an equal mix of single professional women looking to build their wealth and safeguard their futures and women with time-poor partners.
They are typically aged in their mid 30s to mid 40s, are tertiary educated and understand the challenges of maintaining a budget.
“These women are the ones managing all investment decisions. They’re researching their investment strategies, arranging meetings with us (often dragging their partners along with them) and driving the creation of their investment portfolios.
“They’re also the ones who are working closely with us – providing input into how their property portfolio will be managed, how their investments can be maximised and whether or not sell. They’re with us every step of the way.”
Mr McMillan says those with partners are generally the spouses of time-poor professionals – surgeons and doctors, with long and unorthodox hours and business owners or executives spending long hours at the office, with little time to manage their investments.
“In the majority of instances they have been more than happy to cede total control to their wives.”
Mr McMillan says the one thing these women investors have in common is their diligence and preparedness to do the hard-yards where research is concerned. “By the time they come to us, they are already extremely savvy and well informed. They know precisely what their goals are and who they can trust to help them achieve these goals.
“They’re also quick to come to grips with the advice we give them, are good at visualising the potential of an investment property and have a pretty shrewd idea of what to pay for it.”
From his experience, women are also the better decision-makers under pressure.
“Because of the often stressful nature of securing quality properties with high growth potential, decisions to buy often have to be made in a short time frame – sometimes less than 24 hours. In our experience, our female clients are less likely to be overwhelmed by this pressure and are able to think and communicate clearly and coherently.”
Does this mean that women are better investors than men?
“In some instances, yes,” says Mr McMillan. “Not only are they more methodical and thorough in their decision-making than men, they’re more receptive to advice and tend to consult at length, which means their financial decisions are usually guided by expertise, rather than gut instinct.
“Men on the other hand men are more prone to trust what feels right to them.”
This media release featured in the AFR story: http://www.afr.com/personal-finance/shares/female-investors-are-taking-the-reins-20150518-gh41vq
More about ……. Performance Property Advisory is a nationally based property investment advisory service assisting mid to high income earners build and grow their property portfolio. Its focus is blue chip residential property and homes in Melbourne, Sydney and Brisbane. As a comprehensive outsource property investment advisory service, PPA selects and acquires property, manages property portfolios, reviews property’s performance and facilitates the sales process.
For more media information contact:
Wendy Parker PR on 0422 694 503