From Apprehension to Personal Property Investment Success – (Julie MacKenzie MELBOURNE)


Yes I'll share my property investment story shortly but, firstly I would like to personally thank you Tom, if it was not for your support, encouragement, patience and knowledge with my millions of questions I would not be in the great financial position that I am today.

I am a 30 year old woman and although interested in my financial future, investing for me only started with a bit of outside encouragement from a partner that I had at the time.

I purchased my first investment property 10 years ago with my then boyfriend, Chris. I was 20 years old back then and my priorities in life were pretty much not directed to planning for my future. However, Chris’s parents mentioned to us that a property next door to the one that they had bought was available.

With some good reasoning and a little encouragement we got our finances together and proceeded to get our investment feet wet. We bought in a suburban housing estate in the suburb of Sydenham. This was about 45 minutes from the Melbourne CBD in Victoria.

We purchased that place for $74,000. The relationship was to end but we kept anyway for another couple of years.

After 5 years of ownership we decided to sell it in 1998 for $95,000.

During this time I also purchased another home that I lived in with my new partner.

This was not the usual 50/50 financial arrangement because his earnings were substantially higher than mine. However, this enabled us to buy a house that was more in his price range not mine.

We bought this place for $345,000 in 1997. I put my savings and eventually the proceeds from the sale of the Sydenham home into this home and my partner covered the balance. The same arrangement happened with the mortgage payments.

My partner also had an investment portfolio and I would speak with him about this for hours. We even went to see his financial adviser to see what my options were as to investing in managed funds.

Through my interest to get ahead and the knowledge that I was picking up, I started to become less apprehensive about borrowing money for investment purposes.

In 1996 I took the leap and invested $25,000 of my own money and borrowed a further $25,000 for a portfolio of shares worth $50,000. I was ecstatic.

In 1997 it was time to amicably pursue my single ways again and my partner paid me back the money that I had originally invested in our property.

I was unsure what I was going to do with this money but I knew this time I wanted to do it by myself. After some thought, I decided to build up my portfolio of shares. The money from the bricke and mortar plus the growth in my shares gave me more equity to borrow against so I took the opportunity to do so.

My portfolio was now $230,000.

After a short time I began to wonder what is my next investment step?

This is where Tom and my million questions come in.

I was not happy with just being in managed funds and would pester Tom about an investment property.

My goal was to buy my own home to live in and to also one day get some wealth building bricks and mortar and have some tennants help me pay it off. I also wanted to keep my portfolio which I have always thought would be the asset that would make me money.

Once I realized the many benefits of bricks and mortar compared to shares I thought, ok this is the way to go first. Then when l get on top of the loan, I can think about buying my own home.

Well I am at that point now, all because I listened to Tom with a very good piece of advice. That advice was that you don’t have to buy in your own neighborhood to make money in property.

I am a Melbourne girl through and through and had thought that this was the place I should buy. Unfortunately, Melbourne prices had gone beyond my reach. Thinking further about Tom’s advice I turned my attention to Brisbane.

This was still in my price range and the other draw card was that my Farther lived there. Dad loves looking at property and with this local knowledge and experience knew a good buy when he saw one. One day he rang me and I flew to Brisbane to have a look at what he had found.

With some intensive research and many miles covered in the car I had chosen my next property.

To afford this piece of real estate I had to sell some shares. This was a huge deal for me. My share portfolio was the only investment that I’d done by myself. However, my shares were not making a profit, and this made me even more apprehensive to sell down and buy property.

After lots of questions and reassurance I bit the bullet and sold some shares. I made a huge loss and questioned myself over it for a couple of months.

The short story is that I sold $30,000 worth of shares and I brought the property for $145,000. That was just over a year ago now and I had to get it valued recently as I am refinancing. To my surprise it was valued by the new mortgagee’s at $260,000!

Boy am I now glad I sold $30,000 worth of shares as I have nearly doubled my money. To make matters even better I have managed to reduce my loan to $109,000

I kick myself I didn’t buy two places now!!!!

I suppose that is always the way though. It is not until I got my feet wet and actually saw some financial gain that I became comfortable. I do wish that I had bought two though!! However, I am well and truly on my way to getting my next property and intend to repeat the process much sooner next time.

In parting I would just like to say for anybody looking at property investment that it does work and all it takes is to learn as much about it as you can to build your confidence. From there it is just a matter of doing it.

Regards Julie.

Toms comment:

It has been particularly pleasing to me (as it has been for many that I have personally been able to help) to see Julie achieve what she has for two main reasons.

One was that she made a decision that it really was up to her to look after herself, so do it she did!

The other is that although nervous and I think at times engulfed with fear, she found out what she needed to know for herself.

Yes, when she stated “a million questions”, she wasn’t kidding!

Frankly though, if she has a million more I am always happy to talk property. I will say too that I don’t give financial advice as that is a financial advisers job, but in reference to Julie I think I was able to pose relevant questions that she tracked down her own answers to.

(Ultimately any purchase in the end must be your own responsibility.)

When she told me that she had bought her first property, not only was she excited but also confidant and I think that was simply due to having done the necessary homework to justify her purchase. At the time of writing Julie is lining up for property investment number two.

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