How this investor made a nine-property portfolio in 10 years

Soon enough, he realised how he could make money work for him by building a property portfolio.

According to the property investor: “Sometimes you do your best thinking in the shower … and I thought to myself, ‘If I was to move out and go and rent somewhere and then get someone to rent this, it was going to cost me $30 a week.’ I thought, ‘I could probably do that.’ "

“Then, it dawned on me ... ‘Imagine if I had 10 of these … ’ Obviously, they go up in value and [ultimately build wealth]—so, that's how it all started,” he added.

2. Blacktown

Four years after their first purchase, Geoff and his wife went on to refinance their first property to be able to buy a second one in Blacktown.

Many property investors were wary of the area back then. “They said … ‘Make sure you get your insurance for your renters,’ ” Geoff shared.

“Lo and behold … I've had a tenant in there, the same tenant, from the day I bought it,” he added. Since then, he has pushed the rent up to an average of $12 per year.

3, 4 and 5. Kingston, Logan and Woodridge

After a bad back injury, Geoff spent six months educating himself by reading magazines and watching shows about the business of creating wealth through real estate while, at the same time, looking at areas with good potential for growth—based on historical data.

Some of the locations that caught his attention were Kingston, Logan Central, and Woodridge, where he eventually bought one house each.

Geoff said: “In terms of [earning] capital growth … they've done pretty good … They're relatively close together [and], I guess ... in terms of train lines and block size, it works itself out.”

Up to this day, the property investor and his wife are holding on to these properties.

6. Nerang

According to Geoff, he proceeded to buy a property in Nerang in the Gold Coast partly because it reminded him of his Blacktown purchase.

The property investor explained: “I was watching [a show] ... one night and they were talking about … these areas in the Gold Coast where the rents were low, [where] it's so hard to get rent, [that] it's too hard to rent places.”

“It reminded me of Blacktown in 2012. [Properties were] hard to rent and … obviously, that [demand for properties] was driving the prices of the rent [up], but also, there was a low amount of supply to buy as well,” he added.

He ended up buying a three-bedroom townhouse in a block of 11 properties with “no pool, tennis courts, or any of that stuff” for $280,000. Despite his random decision-making for this one property, the asset eventually saw good growth over the years.

“The one in the complex, a year ago, sold for $360,000 … [and] I thought to myself, ‘Well, that's not too bad in terms of capital growth,’ ” Geoff said.

It also does not cost too much to hold while making around $25 to $30 every week—which a good sign for his property portfolio’s cash flow. The Gold Coast may not appeal that much to some property investors, but Geoff believes that what matters is not just the location of the property but also the type of property that one is going to purchase.

He said: “It depends on what you're buying, too … I would never buy in a high-rise unit complex there—that's just ludicrous [because], at the end of the day, it's a family area where we are.”

7 and 8. Boronia Heights

After taking a break for a while, Geoff and his wife were then lead by their former buyer’s agent to another suburb in Logan called Boronia Heights where there was a three-bedroom house on a big block ready to be sold. However, the property was unkempt to the point that grass grew to around a meter-and-a-half high.

“There was [also] an older guy that lived there [who has] been smoking bongs on the bench out there,” the property investor shared.

Despite the condition of the property, as a season property investor, Geoff knows the opportunity that lies within poorly-marketed properties.

According to him: “This one wasn't on realestate.com or anything … It was on a real estate agent's … own website, so I knew that we'd be able to come in pretty low because … no one would be sniffing around for it.”

In the end, Geoff and his team spent around $15,000 to have the whole place cleaned up and improved from the backyard, to the carpet, paints, blinds, and air conditioning. Then, they eventually bought the property for $275,000—a good deal considering that properties in Boronia Heights usually cost around $350,000.

A week after they settled the property, Geoff’s buyer’s agent called him up to say that the property next door has been put on sale. Upon further inspection, he realised the potential to develop and ultimately create more wealth.

He shared: “I made some phone calls, spoke to the ... Logan council … [and said], ‘Look, basically, what can I do with this?’ And … they said, if I wanted to down the track ... the blocks would be combined … which would enable me … to split … the block.”

“600-square block with a driveway down the side or [something like that], and then, [I can] put a four-bedroom house or even one of those dual-key things.

“I thought, at the end of the day … I thought, ‘You can't really pass that up.’ [Thanks to my buyer’s agent because] if I hadn't used [him] … I would never have even known or I wouldn't have even looked at it,” Geoff shared further.

For the second Boronia Heights property, Geoff paid $315,000 for a larger block, even though there were offers in the $305,000-range.

Smart Property Investment’s Phil Tarrant believes this was a smart move, and he said, “You might pay 10 [times] over … but the upside [is], in 10 years’ time, or if you choose to stick them together in 5 years’ time, [you will get more value]."

“The value of something isn't always the price, right … ? A lot of investors get caught up and they think, ‘No, no. I'm not going to pay that extra $10,000,’ but then you miss that opportunity,” he added.

Both of the properties are neutrally geared, so whether or not Geoff will be able to grab the opportunity to split the block depending on changes in zoning and the like, they will remain good for his portfolio as standalone assets.

9. Coomera

For their last investment property, Geoff and his wife bought a two-bedroom townhouse in Coomera, up in the Gold Coast.

According to the property investor: “I almost forget about that one, because … there's different rules with self-managed superannuation. We can't really do anything to it, we can't pull any money out of it and all that sort of thing.

“That became more of a cash flow thing to be able to hold its own in super,” he added.

The greater risk

Geoff and his wife’s property portfolio is currently worth $2.95 million with about $2.1 million worth of debt. After taxes and other expenses, the property portfolio costs them about $5,000 per year to hold.

The property investor said: “From what it's done, essentially … if I work out what the equity is over the last 10 years, it's about 3 per cent [growth in value] every year.”

“It's not the greatest, it's not the worst. I see it as ... around $100,000 a year,” he added.

Aside from the wealth generated from his property portfolio, Geoff also saves up money through his stable job as a policeman. At the end of the day, what he wants is to avoid being “a slave to the wage”.

Having to work 40 hours a week for the next 40 years is an even greater risk for him than working through the unpredictable property markets.

He said: "You always see, ‘Oh, the market's going to crash’ and all these sorts of things. Well … if the worst that's going to happen is we sell everything and we don't lose any money, [then we’re going to be fine].”

“If we don't do anything, we don't get anything anyway,” the property investor concluded. 

Tune in to Geoff’s episode on The Smart Property Investment Show to know more about the challenges he and his wife faced early on by rentvesting after they received a termination letter right before their baby was born and how they managed to overcome this situation and achieve their goals.