Completed Projects

My Investment Property Journey: Apprenticeship, Growth, and Strategic Moves

1st Property: Coombabah, Gold Coast – Early Lessons in Trusting the Market

In my 20s, during the 1980s, I was introduced to property investing by a Sydney marketer. The property was located in Coombabah, on the Gold Coast. To entice me further, the marketeer paid to fly my father and me from Sydney to the Gold Coast, where we were driven to Sanctuary Cove, a nearby luxury development. Back then, Sanctuary Cove was a much less developed area compared to today, and it was only about 10 minutes by car from Coombabah, which made the location seem even more appealing.

At the time, I was commuting approximately 1.5 hours each way for work in Sydney, so I bought the investment on emotion. I thought about the appeal of being closer to the coast and living in a newly built, more modern property on the Gold Coast, but I wasn’t actually planning to live there. I later learned the importance of evaluating investments based on return on investment (ROI) rather than personal lifestyle preferences.

The rental return was around 4%.

Unfortunately, I purchased the property in Coombabah for around 40% more than it was worth. Though I eventually moved to the Gold Coast and lived in the property for a while, I eventually sold it for the same price I bought it for, breaking even after over a decade, learning crucial lessons about market research, the importance of understanding property-related costs, and managing expectations for growth.

Key Takeaways:

• Trust but Verify: Always dig deeper and research beyond the surface.
• Market Understanding: This experience taught me the importance of thorough research.
• Body Corporates: I was introduced to the complexities of body corporates and their impact on property investment.
• Long-Term Hold: Despite the mistakes, the property taught me the value of holding for the long term.
• Long-Term Perspective: Even a break-even outcome can offer valuable lessons for future investments.

This early experience in Coombabah, along with others, became a crucial part of my learning process, teaching me to evaluate properties with a more critical eye and helping me understand the real value of location, development potential, and the broader market, and valuing joining property associations and investing in property courses.

2nd Property: Hamilton Heights, Gold Coast – From One Rented to Both Rented

Next, I purchased a duplex pair in Hamilton Heights (now part of Southport), which I bought as a mortgagee in possession. Initially, I rented out one side of the duplex while living in the other. The rental yield was around 4% when only one side was rented, but when I rented both units, the rental return increased to 8%. When I sold, I achieved a 30% return on investment.

Key Takeaways:

• Maximising Rent: Renting out both units in a duplex can significantly boost rental yield.
• Mortgagee in Possession: Distressed properties often present opportunities to buy at a discount, and can yield great returns if managed correctly.
• Security Enhancements: Simple improvements, like a lockable fence, can increase both the rental yield and marketability.
• Strategic Renting: The duplex format provided flexibility in renting out both units separately.

3rd Property: Elanora, Gold Coast – Cosmetic Renovation for Profit

Following a separation from my first husband, when I was granted a domestic violence order, I sold my first two properties and used the proceeds to purchase a house with a granny flat in Elanora, another area on the Gold Coast. I saw the potential to add value through a cosmetic renovation, which included:

• Engaging a Colour Consultant to create a cohesive, appealing design
• Applying fresh paint throughout, including feature walls with textured paint to add interest
• Styling the interior to enhance its appeal to potential buyers or tenants
• Underpinning to ensure the property’s structural integrity, addressing any potential issues

After completing the renovation, the property was sold at auction in rooms for a 12% return. The rental return during the time I held the property was around 4%. This experience reinforced the value of making strategic improvements to increase both the property’s market value and its rental potential.

However, I also learned some valuable lessons during this process. While the property had a granny flat, it was marketed as “dual living” by the real estate agent. I lived in the granny flat while renting out the main house. Later, I received a notice from the Albert Shire with a hefty fine and learned that the zoning in the area didn’t permit dual living, a crucial factor I hadn’t considered. This led me to purchase a fourth property to move into, while renting out the whole property in Elanora.

I implemented learnings from property courses and engaged an independent licensed valuer to provide a change of use valuation when I moved out. This valuation helped to establish a cost base for the property, which provided an offset to future capital gains, mitigating the impact of the market downturn when the property was sold.

Key Takeaways:

• Cosmetic Renovations: Simple improvements, like fresh paint, styling, and underpinning, can significantly increase a property’s market value and rental income potential.
• Granny Flats: Always research zoning regulations before planning for dual living or additional units. I learned the importance of understanding local rules and how they affect rental potential.
• Strategic Selling: A well-timed sale after renovation can lead to profitable returns. Selling at auction in rooms can help achieve strong results in a competitive market, but ensure your improvements align with market expectations and zoning laws.
• Change of Use Valuation: Engaging an independent licensed valuer for a change of use valuation can be a smart strategy to offset future capital gains tax, especially in a fluctuating market.

4th Property: Southport, Gold Coast – Renovation for Strong Return

I purchased a unit in Southport as a mortgagee in possession using cash from the equity in my Elanora property. By doing so, I avoided cross-collateralisation, as the bank holding the loan for Elanora wasn’t aware of the Southport purchase. The unit had always been a rental, tired and dark, and required significant renovations to make it liveable. This project marked the first time I renovated a property for myself to live in rather than for rental or resale—a shift in mindset as I navigated through life’s challenges. As Angry Anderson sings: “Life’s tough, so what? I’m alive, I’ve been down, Seen hard times, But I survived, You know I learned my lessons at the school of hard knocks. I know there’s more to livin’ , Can’t hold me down, Can’t hold me back, ‘Cause I’m bound for glory”

I transformed the unit into a comfortable home with a series of thoughtful upgrades, spending around 10% of the purchase price on renovations:

• Interior Painting: Used lighter colours to brighten the space and make it feel more open.
• New Carpet: Installed carpet in the bedroom and refreshed the living area with laminate flooring for a modern look.
• Kitchen Upgrade: Changed the benchtop and purchased a builder’s pack to save on new appliances. I bought a discounted fridge as a “second” (demo model), achieving savings while still upgrading functionality.
• Mirrors: Used mirrors strategically to create the illusion of more space by reflecting pleasing views within the unit.
• Bathroom Overhaul: Repaired water damage by waterproofing and retiling the shower area. I carefully removed the existing tiles, which were already coming loose, and reused them to save on costs.
• Lighting: Enhanced the overall atmosphere by maximising natural light and adding fixtures with warmer tones.

This renovation was not only about improving the property’s value but also about creating a comfortable and personal space to live in.

Results and Long-Term Vision

I lived in the unit for a time and later sold it privately for a 25% return. The sale proceeds together with those of the Elanora property were used to purchase a home and boat with my current husband, marking a turning point where I began to enjoy the returns on my investments rather than simply reinvesting.

This property reinforced my belief in the power of strategic renovations and aligned with my long-term goal of owning multiple fully-paid-off properties to fund a comfortable retirement.

Key Takeaways:

• Renovation Strategy: Focused, cost-effective upgrades can create significant value while improving liveability.
• Renovating to Live: Personalising a property for yourself can provide not just financial benefits but also emotional satisfaction.
• Leveraging Equity: Using equity from previous properties to fund new investments is a powerful tool, especially when managed to avoid cross-collateralisation.
• DIY Approach: Tackling parts of the renovation yourself, such as removing tiles or sourcing discounted materials, can save money and boost profitability.
• Realistic Retirement Goals: Property investments can be a cornerstone of retirement planning when paired with careful strategy and management.
• Private Sale: Easy to do in a hot market with a basic advertisement in the local newspaper.

This Southport property taught me how to balance creating a home with maximising returns, setting the stage for future investments and a more fulfilling lifestyle.

Other Key Experiences:

• Selling Privately: I have sold properties privately to save on commission fees, particularly in hot markets like when I sold the Southport property. This was also a time-saver and allowed me to manage the sale directly.
• Conveyancing: I’ve handled my own conveyancing for some properties to gain experience and keep costs down.
• Rent-to-Own Agreements: I’ve entered into rent-to-own agreements with tenants, allowing them the option to buy the property after renting, which provides steady cash flow and a future sale option.

Summary of My Property Investment Strategy:

• Cosmetic Renovations: Simple renovations, such as painting and updating flooring, can significantly improve property value and appeal.
• Strategic Buy-and-Develop: Buying distressed properties or using equity from previous properties to fund new purchases or developments is a powerful way to grow a portfolio.
• Owner-Building & DIY: Sourcing discounted materials and handling some of the work personally can reduce costs and increase profitability.
• Maximising Rental Yield: Adding additional living spaces (like ancillary accommodation or granny flats) increases rental yield.
• Refinancing for Growth: Unlocking equity to fund developments or further investments allows for continuous portfolio growth.

Through my property investment journey, I consider my experiences an apprenticeship that helped me learn about the market, renovations, leveraging equity, and building long-term wealth.