The primary objective of investing is capital growth. But the very best property investment strategy respects that cash flow is also an important (secondary) consideration and location diversification is paramount.
Emotions and personal biases must be curtailed when making financial decisions.
That’s certainly the approach 44-year-old Rish took when he looked to branch away from share investment and take the plunge into Australian real estate.
Rish first engaged Propertyology’s services in 2018 and, after a great first experience, he swiftly added two more properties, deliberately in very different locations.
Within just 4-years, the combined asset value had already increased by $740,000 and they are cash flow positive. Very few people could save anywhere near that amount of money in a lifetime let alone 4-years.
As an expat IT professional, Rish likes to apply a textbook approach to his analytical forward-thinking.
Now Singapore-based with his wife and 6-year-old, Rish said he’s excited about setting the financial foundations for his return to Australian shores.
While reflecting back on how his relationship with Propertyology commenced, Rish said “…I was thinking about my future planning, I started thinking about what a good diversification strategy would look like. Australian real estate has always been known to provide that sort of diversification.”
“So, I was working out how to take some of the gains I’d made in the stock market and diversifying those into Australian real estate.”
Rish said, while he found it relatively easy to research a wide range of available stock market options, choosing real estate across Australia’s vast landscape was tough. He wanted expertise.
“I was trying to understand the concept of buyers’ agents in Australia – the different types of them – and Propertyology fit perfectly with what I was looking for.”
“I knew that I could get property reports through CoreLogic and others, but a lot of that is hindsight rather than futuristic.”
“Also, because I’m in Singapore, I wanted to find someone who could offer me end-to-end service in terms of negotiating, purchase and in terms of finding me a property manager and so on.”
After having a close look at several buyer’s agency firms, Rish reduced his shortlisted to two candidates – a Sydney-based buyers’ agent and Propertyology.
“As a first step, I went ahead and purchased a property with each business to really understand the process. The intent was always, depending on the experience, that I would go ahead and purchase a few more with the firm that fitted my criteria better. That ended up being Propertyology,” he said.
“We instantly talked the same language.”
He said Propertyology’s ability to look beyond a limited area appealed greatly.
“The big difference that I found is most buyers’ agents have a list of just two or three locations that they’ve pre-identified. It is not a vast number of areas, and they typically rotate from one to the next of those same areas.”
“What I found with Simon’s team [at Propertyology] is that they do cast the net wide in terms of looking for locations.”
Rish’s portfolio now includes real estate holdings in Queensland, Tasmania, as well as regional Victoria, all purchased with the assistance of the team at Propertyology.
Rish also felt Propertyology’s approach to price point was sound.
Each of the first three purchases [2018/19] were between $350,000 and $450,000.
“One of the reasons the price point was so important to me was the stock market philosophy which says I might hope to be 100 percent right with my research, but I’m better off splitting the money across three or four different stocks for diversifying.”
“That aligns with Simon’s philosophy, too. Instead of putting it all into one property or one location, I diversify it.”
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Rish said Propertyolgy has been an excellent partner achieving his aims.
“They really understand what’s happening in Australia and what the long-term growth drivers are – such as tourism, mining, education, agriculture, government infrastructure spending, etc.”
Rish said he appreciated Propertyology’s methodology in studying these drivers and which areas are set to benefit from their positive influence.
“I love how they quantify their research with the data around investment decisions – looking at the local economy, demographics, population and various other factors and then homing in and saying.”
While cash flow is not the primary goal, the rental returns through following Propertyology’s philosophy are well above national the average.
This is important for investors to be able to cover the annual holding costs and to add scale to a portfolio.
Right from the outset, rental incomes covered Rish’s investment expenses. Over the 4-years since purchasing the first three properties, the rent from each property has increased by a combined $13,000 annually.
Referring to Propertyology’s post-settlement service wherein they provide ongoing market updates, Rish said “…I don’t have enough time and money to invest in all those research tools, but they give me regular updates on what my locations are doing and what’s changing. It is a huge help.”
Rish says there were other key points of difference that elevated Propertyology above other buyer’s agencies.
“They’re a buyer’s agent with no conflict of interest, with data-driven research that identifies opportunities that need to meet a certain set of criteria around market outlook, yield and level of investment etc.”
“They then tie in that particular process with their execution engine. They go and visit the location, they speak to local council, and so on. Then Bryan (Loughnan) will go and execute on that as a buyer’s agent. Then they have a back office that takes care of everything else with Mandie (Young).”
“That made it a seamless process for me. It’s a well-oiled machine where they all know what role they’re playing… I really enjoyed that,” said Rish.
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“If I look at the brand promise of Propertyology, I have an implicit trust that they’re going to secure me the best property for the best price. In all of my dealings with them, I never got any sense that they were not living up to my expectations.”
“The key for me was that purchasing a share stock I can do in 2-seconds on my hand-held device. But purchasing a property involves a very lengthy and onerous process. What Propertyolgy has done for me made that not to be an onerous and lengthy process.”
Now, with $740,000 capital growth accumulated over the last 4-years, Rish is currently working with the Propertyology team to acquire his next investment property.
“I have a lot of friends in Australia who are in the same boat as I am. They can’t know research like Propertyology does, and everyone is time poor. The price point is about right. I do recommend them… I talk about them all the time.”
Propertyology is Australia’s premier property market analyst and award-winning buyer’s agency. Every capital city, every non-capital city, we analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.