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How to own multiple investment properties for $500 a month

How to own multiple investment properties for $500 a month
January 23, 2018 Propertyology

Brisbane couple, Leigh and Hayley, admit– just like many Generation Xers – they didn’t know much about property investment growing up, let alone owning multiple investment properties.

They say they both grew up in “normal working-class families” where the mantra was buy a home, pay it off over 20 or 30 years, and then pretty much retire on the pension.

Thankfully a chance meeting in a pub in Albury, New South Wales, was to change the course of both of their personal and investment lives.

Doing what they knew

The couple married and then decided that the sensible thing to do was to buy a house in Albury and perhaps undertake a renovation. That was back in 2002 and they say they just did what they had learned from previous generations.

“It was just a house to live in. We were really just following the blueprint that everyone else does – save a deposit, buy a house,” Leigh says.

“We just thought, ‘Oh, this is what you do and you then pay it off as fast you can. Try to have a holiday each year with what’s left if you can.’ That was how it went.”

They were following the same path as many before them, but then they were both offered positions in Brisbane so moved north – and then they kind of did the same thing again.

“We bought an apartment in Brisbane and had the same plan of just paying it off,” Leigh says.

“We weren’t even thinking about property investment at that time. Then the kids came along and the apartment wasn’t very kid-friendly.”

Leigh and Hayley sold up and bought a block of land so they could build a house to live in. Their suburb selection simply involved it being close to the schools of their choice as well as close to their professional jobs.

They were parents to two boys by this time and their financial plans involved paying off the house and then, well, retiring at some stage.

In the space of 10 years, the couple had sold two homes and now owned one house that they’d built themselves.

Investment inspiration

Then, at the airport one day, Leigh bought a property investment magazine and his thinking started to change.

“I had been thinking about – and other people had mentioned – that they had an investment property. I thought, ‘We’ve got some equity, what are we doing and what’s the plan?'” Leigh says.

“I thought we should start doing something a little more proactive to make sure that we were OK and looked after. I also thought, ‘Oh, well, this doesn’t look too hard – you just go out, get some equity and you buy a place and everything goes up in value and you make a fortune – because that’s what everyone is doing. No problem’.”

So the couple was soon the owner of an apartment in Brisbane, which they financed via leveraging against the equity in their family home.

But the couple was also reading about a firm called Propertyology, which seemed to use a more scientific investment strategy than they had been. Thankfully, just before they bought their second investment property under their own steam, they reached out to the Propertyology team.

“I work at the university and we’re heavily into research so I understand the importance of research and data,” Leigh says.

“After looking at the performance of our first one I’m thinking what am I doing? I know nothing. Surely there must be expertise out there that can give me less risk. I saw a couple things written by Simon Pressley [Propertyology’s Head of Market Research] that was about using data and a more scientific approach. All the different factors that play into whether prices go up, which really resonated with us, because I’ve been a bit of a nerd in that sense.”

“For me, that was this light bulb moment of, “Oh, someone else can do all that analysis and actually find the properties using comprehensive research instead of just picking where it looks like it’s going to grow because it did last year”.

Leigh and Hayley initially met with Propertyology in 2014 and started considering their retirement plans for the first time.

Hayley soon accepted that just because her and Leigh both had good jobs that didn’t necessarily mean they’d wind up being wealthy retirees.

“What I loved when we sat down with Propertyology is that they got out the excel spreadsheets that had all of our formulas about our costs of living and where we wanted to get to,” Hayley says.

“In my work I often do costings around government programs so that just really struck a chord with me. I had real confidence in the process. It was really precise and well researched.

“That’s what won me over and the discussion also around the level of risk tailored to whatever our comfort level is, but it’s also pre-determined that the risk is low.”

Property prowess

Even though the couple believed in research, they soon realised that Propertyology’s research was far superior to the level they’d undertaken in their previous investments. Although a little embarrassed, the couple were just happy to have met a firm that believed in the importance of research as much as they did.

The couple soon had a comprehensive investment plan developed which they are currently ahead of, having bought three (3) properties in different states in the past three years using equity in their home.

The first property – a three-bedroom house in a major regional city – was bought in 2014 for $340,000 and attracted a weekly rent of $340.

Within a year, they’d also become the proud owners of a low maintenance townhouse in a capital city, which was bought for a very affordable $304,900. Their rental income on this property has recently increased to $330 per week. Even though they’ve essentially borrowed 100 per cent of the purchase cost, the property is cash flow neutral. And, within the space of only two years, the property has increased in value by around 20 per cent.

Towards the end of 2017, they also settled on a third property in a different regional city. Paying only $224,000 for a very tidy 3-bedroom house, the outlook for this city’s economy and infrastructure investment is quite exciting. This location is one that most DIY investors wouldn’t even think of yet it is a great example of the benefits of tapping in to the extensive knowledge of professionals. The rent on this third property is an attractive $270 per week.

Leigh and Hayley are currently in the midst of working with Propertyology for their fourth property.

“We were playing catch-up a little bit because obviously, if we had started and realised this 10 years ago, we would’ve been in a really good position,” Leigh says.

“We don’t have much time to muck around. We have a 15-year plan. It involves getting properties pretty quickly using the equity that we already had in our family home.”
Ideally, over the next 15 years, the couple would like to own eight properties in their portfolio.

In the meantime, even though they have bought three properties in quick succession, their lifestyle has not been impacted.

In fact, the couple estimates their out of pocket expenses every month is just $500. So, within the space of just three years, they’ve acquired three solid property assets in three completely different cities and a fourth property just around the corner. That’s a fantastic achievement by these everyday Gen Xers!

A new retirement plan

The couple are now in their mid-40s and hope to be able to choose whether they want to work or not by the time they’re 60.

If they had their time again, they would have engaged the services of property investment experts earlier, but since they can’t turn back time they’ll at least educate their own children about it.

“With the two boys, that’s why we do talk about property a lot, and not just property but why you need to look after yourself and your future. Hopefully they get a bit out of what we’ve learned,” Leigh says.

The couple’s life has already improved with this interview taking place while they were driving for a family holiday in the Whitsundays.

Back in the old days, they say they would’ve been too scared to spend money on such a trip.

Today, however, they know their retirement planning is on track.

Leigh says he still marvels at crossing paths with Propertyology and how that has changed their financial futures.

“It’s like having a research unit at your disposal that will go out and find the best possible investments for you. I just think that’s worth paying for,” he said.

“When you look at the amount of money you’re putting into these investment properties, it’s crazy to think that you’ll get a plumber around to fix your tap, but then you’ll go off and spend $500,000 on an investment property and think you can do it yourself.”

“Once you’ve jumped in a couple of times and worked with Propertyology to do it, the process is very easy. You can buy 20 houses and not be stressed too much at all.”

If Leigh and Hayley’s story has resonated with you and you’d like to know more about Propertyology’s services, here’s how you contact them.