Ever since I was young, from about the age of 10, I’ve always wanted to get into the property market. As someone who grew up in Western Sydney and later in Perth, always living in rentals, it was a goal of mine to get my own property nice and early.
Although being a 1990’s born kid and missing the Australian booms of the early 2000’s and then after the global financial crisis whilst still a University student, I hit the workforce in 2012 geared with my graduate Physiotherapist job and a nice HECs debt. I’d moved to Melbourne where the medium house price close to the city was over $500,000 at the time but went away saving my deposit for the goal of my first property.
Realising the likelihood of me saving >$50,000 for a house deposit would take years, I decided to look at the apartment market and after 12months of very firm savings I had $20,000 and was on the hunt. Now even $20,000, which is a nice bit dough for a 23-year-old, doesn’t seem to go far when you look at property.
I quickly realised if I was to get out of the rental I was in, a nice 2 bedroom place shared in Yarraville (worth close to $400,000 if bought), I would have to re-think my expectations. After being disheartened by the prices of auctions even on 2 bedroom apartments around the area, I looked into more properties.
What I found was there was some good value in picking up an older place especially in apartments, something built in the 1960s, 1970s and even 1980s. The reason is they generally were brick built, complexes of 10 to 14 units (not the 100 unit towers you see today), came with parking and usually in nice streets.
Armed with this and a reality check, I needed to find a property for $250,000 or less, I was back on the hunt. What I found was a run down late 1960’s 1 bedroom apartment in Kingsville, a suburb 9km from Melbourne’s CBD. It was listed for $210,000.
Now, let me be clear this place needed some serious tender love and care. It had stained yellow walls, shoddy curtains; terrible rose pink tiled kitchen and bathroom and needed a thorough clean amongst many other things. But, I had found my gem! For all its drawbacks the building and pest inspection showed exactly what I had learnt. A solid ground floor brick apartment that was structurally good and just needed a serious cosmetic re-lift.
The apartment was passed in at auction and I went to the real estate agent and we were negotiating with the buyer. I said I would not pay more than the $210,000 even though they kept pushing for more and after a bit of to and fro picked up my first property January 2014!
I was gratefully helped out with the first homebuyer stamp duty discount and another $5,000 by my wonderful mother to help with closing costs on a no interest payback terms.
Now, many of my friends thought I was an idiot and now living in a dive the size of a shoebox! I’ll be honest it took some re-adjusting and culling of ‘things’ I didn’t need but the difference was, it was MY dive when they were still renting. Not afraid of hard work I went away renovating the property saving money where ever I could doing things myself, sanding, painting, floors, blinds, cleaning, tiling and using the cash and beer economy for tradie friends to turn the place around.
Fast-forward 12 months and the place was done. I was with a long-term partner by then and we decided to move into a 2-bed rental. I moved out and leased my now new renovated apartment out for $260 a week, which would cover its mortgage and then some, plus I now had an investment underway.
Fast-forward to October 2016 and it’s been a great investment since, comfortably being rented out. We’ve since stayed renting but also picked up a place in rural WA as a positive geared investment and back in talks with the bank, as this little unit has increased well in price, about taking equity out to pick up the 3rd investment property. All less then 3 years from purchasing the unit and starting it’s renovations.
Now, my friends ask me how do they get their first ‘dive’ just to get into the market and I say start small and roll the sleeves up.