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Analysts align to create diversified portfolio

Analysts align to create diversified portfolio
January 29, 2019 Propertyology

You can’t discount the credentials of this duo who were quick to realise investing in Australian property has a lot to do with numbers, but different sets of numbers than what you think.

Mike and Phoebe’s smarts cannot be denied. Phoebe’s background as a medical professional involved years of training while Mike brings over 20 years as an investment advisor to the table.

With that sort of background, you know they’re starting with a great knowledge base.

The couple settled on Queensland’s Sunshine Coast a couple of years ago after spending most of their married life in the café capital of Melbourne.

“We recently relocated from Victoria up to Queensland – my health wasn’t great – and it caused me to shift career,” Mike says.

The couple were on holiday when a job offer compelled them to reassess their future.

“Phoebe popped into one of the hospitals up here on the Sunshine Coast and came back half an hour later and said, ‘I’ve just been offered a job.’ We were in the throes of planning our next move any way – we’d outgrown the house (in Melbourne) and wondering where we might live.”

Mike already had extended family on the coast so the decision to move was fairly easy in the end.

When it comes to investing in property, Mike’s first venture was before he met Phoebe and came about when he realised it was time to diversify away from the share market.

“I’ve always been predisposed to investing in shares – but I bought my first property in 2000 at the height of the tech boom when I realised something was wrong with the (securities) market.”

It obviously proved a smart move after he acquired a property in Brisbane. He did take one learning away though – stay in for as long as possible.

“Three years later, the property had value had gone up substantially so we I sold it… which was one of my biggest mistakes given how far the [Brisbane] market continued to move. In hindsight, it was a really good lesson,” he says.

This experience prompted Mike to keep having a hand in the real estate field.

“In 2005, I ended up buying a little house in South Melbourne… it became my principal place of residence and we’ve still got it. Recently, since I’ve transitioned away from shares in my professional life, I’ve become more interested in property.”

Mike says that he and Phoebe’s approach to real estate investment was sound, but a touch undisciplined.

“My strategy tended to be a little ad hoc although it has always centred around diversification. As our careers took us to various parts of Australia we’d invest in each location. And Phoebe works in the medical field, so we’d buy properties near medical infrastructure – they tend to have a solid rental pool,” he says.

Upon moving back to Queensland a couple of years ago, the couple began looking for a property in Brisbane once more, but realised buyer competition was tough.

“What we found when we started looking is that a lot of properties were being listed and then were getting snapped up. We really didn’t get a look in.”

Mike said they became frustrated and wanted a solution.

“That prompted us to think perhaps we should look at using a buyers’ agent who knows the market better than we do and might get a look in at properties given their relationships with agents.”

Mike began his research by looking through a variety of online and published resources, which led him to Propertyology.

He said Propertyology’s approach to analysis really appealed to him.

“I read a Propertyology article and saw Simon talk about the way they go about researching and it struck a chord with me – it resonated. Given my background in securities research, they were doing pretty much the same thing in property research – I didn’t see too many other buyers’ agents who were doing it to that extent.”

Mike spoke to Simon about his investment philosophies and quickly realised their approach to investment aligned.

He says Simon’s position that ‘there is no single Australian market’ was definitely appealing.

“Particularly with all the fear mongering that goes on – particularly with Sydney and Melbourne at the moment. People are saying, ‘The Australian property market is stuffed!’, but it’s like saying the Australian share market is stuffed. If you took the Big Four banks, Telstra, BHP and Rio Tinto out of the Australian share market, there’s still 1200 other companies to look at.”

“With the property market, there’s so many other locations in Australia. As Simon keeps saying – hundreds of other regions – yet people and the media are fixated on Sydney and Melbourne.”

Mike says he and Phoebe had also invested in regional markets previously, so they knew they could do well with Propertyology’s help.

“We engaged their services, they recommended a location and within a couple of months they’d identified a good property and signed contract.”

They paid $365,000 for a solid brick three-bedroom home in regional New South Wales. “That’s worked out well – our new tenants have moved in at $375 per week.”

A few months later, Mike and Phoebe were back in touch with Propertyology to invest again.

Already with a sizeable portfolio that invariably leads to, among other things, land tax considerations, Propertyology introduced them to a location in a completely different state and with an economic profile that complimented those of the locations that they’d already invested in.

Propertyology’s Head of Property Acquisitions, Bryan Loughnan, successfully negotiated the purchase of a low maintenance house, on a large block, with city views for only $408,000. The property was already rented and had a solid lease in place.

Mike says that with these two additional investment properties now under their belts, they’re keen to look at buying more as part of a long-term strategy.

“We’ve had a busy 12 months. The plan is to build up some equity and do something through Propertyology again, hopefully this year,” he says.

“The way that they identify locations and do their research – I really like it. Also, in terms of the manner in which the transaction is managed is very professional.”

“The negotiation skills of Bryan (Loughnan) – it really took that away from us and let the process run its course. Communication, the negotiations, and the background administration all went seamlessly. You give that to these guys and pay them and with that comes outstanding service!”

Mike also likes how well the company is networked across the nation.

“I think their broader view gives them an advantage over other buyers’ agents as they have more connections around the country as opposed to one or two markets.”

Mike says while there might be plenty of buyers’ agents around, Propertyology has his seal of approval.

I like the way they think.”

Propertyology is Australia’s premier property market analyst. Every capital city, every non-capital city, we analyse fundamentals in every market, every day. Our multi-award-winning buyer’s agents use this valuable research to help everyday to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.