When I was sixteen, the last thing I had on my mind was my financial future. Yet, twelve months later I would be a first-time landlord and on my way to building what is now a multimillion-dollar investment property portfolio. Was it due to luck and fortune and something unachievable for most? Not at all. It started with a small down payment and, like fruit on a young tree, it just took time. 

Growing a portfolio on a shoestring budget

In 1990 when my family immigrated from London to Sydney in pursuit of a better life (and better weather!), we were poor. In those early years my mum cleaned houses and my dad went door to door cleaning windows just to get by. They believed in hard work and impressed that value on my two older brothers and me. They eventually secured employment and were able to scrape together enough money for us to never know we were poor. 

In 1998, my grandparents both passed away and my father received a small inheritance, which they used as a down payment to buy their first home in Australia. It was a modest home that needed renovating and was about as close to being underneath electricity power lines as possible, but it was part of a family journey of renovating and selling (and renovating and selling some more) that would help me understand the value of real estate.

My grandparents also set aside inheritance money for each of their grandchildren. I wanted to buy a used car, but my parents convinced me to put the money into something that would increase in value. Following their advice would become one of the best decisions of my life. 

My parents co-signed a small mortgage, and with the help of a local real estate agent, we negotiated a great deal on a studio apartment in North Sydney. It was small, old, dirty and in need of complete renovation. However, what it lacked in aesthetic appeal, it made up for in location. The studio was basically downtown in one of the most popular cities in the world, so we knew its value would only increase. 

With a minimal budget, we were able to make simple and effective improvements to the interior. We gave it a fresh coat of paint and replaced the tile with floating wood floors to enhance the natural light. We replaced the small kitchen with items from IKEA and scrubbed the bathroom within an inch of its life. After two weeks, the apartment was ready for a new tenant. 

Leveraging the experts

To make things easy, we used a real estate agent to find a tenant. They handled everything including listing the property, scheduling showings, screening applicants, collecting security deposits, handing over keys, following up with move-in condition reports, and more. A good agent will make this process smooth and help prevent potentially awful tenants --- trust me, you don’t need that in your life. That same local agency managed our property for more than ten years, and through countless tenants remained a valuable resource for us.

We were never bothered in the middle of the night to call a plumber. We received a monthly summary and could see the rent payments slowly chipping away at the mortgage. When I sold the apartment in 2012 for three times what I paid, it gave my wife and I a cushion of stability that led to our own family home and the ability to buy future investment properties.  

Looking back now, I feel lucky that I didn’t buy myself a car. It would be long gone, but my real estate investment was the rocket ship that launched my real estate journey and career. It not only set me up financially to grow my portfolio, but it also aligned me with the right mentality that helped me recognize opportunities when I saw them.

Is it time to plant your tree?

It's not too late to invest. While you can’t turn back time and buy a house as a teenager, you might be in a position today to put together a small down payment and buy your first investment property. Think about how fast the last ten years has gone by, and think about where you want to be ten years from now. Think about what legacy you'd like to leave for your children or grandchildren. The right investment now could make all the difference in your retirement, your family's future and a lifestyle of more financial ease.

Contact David for more information on how to grow your portfolio, or with any Austin real estate questions.