Single mum Orsolya has netted some big profits over her 20-year plus property investing journey, but she’s learned some tough lessons along the way, too.
A mother to two children, Orsolya has bought, sold and developed a number of properties since she started in the real estate game in 1995.
Back then, she bought a property in Adelaide for $65,000, but a divorce meant it didn’t stay in her portfolio.
A few years later, she was in Darwin where she built a property that she intended to be her home.
But a change in circumstances meant it soon became a rental and it was an experience that also made her rethink traditional home ownership.
“The rent I was paying was less than keeping this property over my head, so it made sense to keep renting,” she says.
“This is when I realised that having a PPOR is a liability, as well as I could rent in the place I wanted to live, but not necessarily buy a property in the same suburb.”
It’s fair to say that the results from that 2002 purchase are extraordinary. Even though the Darwin market has taken a hit recently, that property has increased in value by a staggering 380 per cent!
She says her next two purchases were valuable lessons as she invested in land in the Northern Territory and Queensland but didn’t end up building on either due to feasibility concerns.
Even though she’d experienced less than stellar results from her land purchases, Orsolya pressed ahead with her property investment dreams.
She says she’s long believed in real estate as a vehicle to create wealth as well as a solid financial future.
“Property is an asset class that I find I enjoy and understand,” she says.
“You can also be very creative with the way you utilise property for your wealth creation journey and can have a diversified portfolio using the same asset class.
“I also feel that property is something people will always need, no matter what happens, as such it is an asset class that will stay around for the long-term.”
As she neared 15 years’ experience as a property investor, Orsolya bought a property in Perth with a view to developing it in the future.
Alas, the numbers didn’t add up so she sold it in 2011, which was around the same time that she bought a rundown cottage on 1,011 square metres in Perth’s Bayswater.
She subdivided the block, built on the back, and soon realised an impressive $300,000 in equity from the project.
She added two more cash flow positive Perth properties to her portfolio and also got involved in joint venture renovation, subdivision and development projects that have netted her returns of between 11.25 to 47 per cent over six to nine month timelines.
She’s certainly come a long way from that original $65,000 Adelaide purchase and is also currently involved in unit trust developments in Melbourne.
Orsolya planned to take a gap year in 2015, but soon found that she missed working with people so when the opportunity arose to join a construction project in South Korea she jumped at it.
When she is overseas working, her children live with her parents which she says serves a number of purposes.
“I used to think that being 38 and living with my parents was embarrassing, but it actually makes financial sense,” she says.
“They have their own place so I pay board to them, with that I also get live-in babysitters, which comes especially handy at the moment as I don’t bring my kids with me on deployment.”
She has no accommodation costs in South Korea as its part of her employment contract and she says the board she pays her parents is less than half what it would cost if she was maintaining a home in Australia.
“So any money that I save gets divided between a rainy day fund and an investment bucket. I feel free to do whatever I want without having the liability of a PPOR,” she says.
“Personally I choose to rentvest because I like the flexibility it gives. I can go wherever whenever and not have to worry about maintenance and upkeep of a property.
“I can live in a place I like, but wouldn’t necessarily be able to afford to live in if I had to buy it.”
Orsolya is continuing to build her portfolio by completing joint ventures that can help finance investment in buy and hold properties.
And she says her long-term goal is to have a balanced portfolio that produces a $100,000 net cash flow per annum.
“Property is a great asset class,” she says.
“When investing you need to create a long-term focus and don’t let yourself be taken off the path to get there.
“There will be challenges, but don’t be afraid to find out of the box results. The biggest risk will always be your knowledge, so ensure that you keep on learning.”
Peter MastroianniPeter Mastroianni is a property finance expert and the co-founder of Loans Only, specialising in investment lending. He is the author of two top-selling real estate books and host of The Rentvesting Podcast. Peter is passionate about supporting the next generation of investors rethink the traditional home ownership model. He does this by championing the ‘Rentvesting’ strategy through www.rentvesting.com.au.
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