At just 28 years old with five properties in his portfolio and plans to buy a sixth, Morgan Harris-Bushell has been quick to realise the financial benefits of property investment.
In our latest episode of the Smart Property Investment Show, Phil Tarrant catches up with Morgan who shares what it was that originally made him realize that property investment was the way that he could create the life which he wanted to after having saved for years with no real long-term plan or intention.
Morgan will share the story of each of his properties and extensive renovations which have taken place on each of them - one being entirely restored following a fire which had destroyed the property to the point that the interior could be seen from the street.
He will also discuss the sacrifices that he has had to make to be at the point that he is at his current age, the importance of mapping out your goals, and why he chooses not to use buyers agents.
If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: Facebook, Twitter and LinkedIn.
If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!
Announcer: Welcome to the Smart Property Investment show with your host Phil Tarrant.
Phil Tarrant: G'day. How you going? Thanks for joining us on the Smart Property Investment show. Today a bit of a power of the property investment community. In the studio I have Morgan Harris-Bushell and before we come on air, we were just having a bit of a chin wag for a couple minutes about ... and I always ask the question because people come onto the show, and they come from all different places, so I try and work out where they come from. There's a big team as I've mentioned beforehand that produce and coordinate this show. I try and keep myself out of it as much as possible, so for me it's as much of a discovery as it is for you, learning about people's property investment journey.
So I said to Morgan how he got here, and he said, "A lot of my mates have actually been on the show before," and I went, "Oh, okay. That's cool. Who are they?" And he rattled off, I don't know, four or five, six different people who've appeared on the show before who've shared their story with Smart Property Investment, and some really good guys who are hungry, and girls, doing lots of things in property.
But I just wanted to use this then as a bit of a self-reflection on me as a host of a podcast. And as you know, none of this is scripted and everything's off the cuff. Morgan, you said that you've listened to most of -
Morgan Harris-Bushell: Or all of them, actually.
Phil Tarrant: All of them.
Morgan Harris-Bushell: Yeah.
Phil Tarrant: What do I do that really annoys you? I wanna get down this path. Let's have a chat about me as a host. Is there stuff when you sit there and go, "Phil, that's a really good line of questioning, but can you just give me a bit more?" What more would you want? How can I improve? How can I, 'cause you're a listener.
Morgan Harris-Bushell: I wouldn't say there's anything that's annoying. It's more, as you kind of mentioned, it's about being curious about the person you're interviewing. And not just figuring out what they're doing, but why they're doing it. And just generally being curious.
Phil Tarrant: And I like curiosity. It's authentic curiosity. You can testament to this. There's no questions here at all, right? It's just us having a chat.
Morgan Harris-Bushell: Yeah, there's no list.
Phil Tarrant: There's no list. And I'm quite keen to learn about what you're doing. But these mates you talk about, so this community, and I know you guys connect in on Property Chat, and there's a lot of sort of forums where property investors get together. And I ask Morgan, whether or not I get any sort of hate mail on that. Whether anyone gives me a hard time. And thankfully no is the answer. I hope the reason why is that I've got no intent or agenda here, I'm just here to share people's story in property.
All these people who are your mates, are they people who you've just met around the grounds who have a common interest in property?
Morgan Harris-Bushell: Yeah, that's right. It's just meeting like-minded people. And that's sort of how I started my journey. Like it's surrounding yourself with people who have done what you wanna do and aspiring to be like them. So that's sort of how I started my pathway along. And meeting people who were doing or had done what I'd already wanted to achieve.
Phil Tarrant: And today we'll have a chat about your pathway and what you're doing in terms of property. But the question is, are you better off learning from other people who are doing it, or better off learning from, and I'll put it in quotation marks, the experts? What's your view of that?
Morgan Harris-Bushell: I think it's a bit of both, to be honest. Because experts are generally people who've already accomplished something and done quite well for themselves. And there's definitely some lessons that you can learn from them. On the flip side, though, people who are doing what you've already, or doing what you're trying to achieve, you can relate to them probably a little bit better. And for me I purposely picked guys who were around the same sort of age as me, going through the same thing, same lifestyles and so on. So for me I kind of found merit in both.
The difference, perhaps, between the experts and yourself and the others is they're a lot more easier to get in contact with. Not saying that experts aren't, but it's just a lot easier to tap one of those guys on the shoulder and say, "Hey, what do you think of this? Would you do something differently?"
Phil Tarrant: Is there good camaraderie then amongst property investors if you are engaged? Are people happy to share their thoughts and visions and the way they see the world?
Morgan Harris-Bushell: Yeah, definitely. I think it gets to a point where, maybe when you've achieved some sort of success, either that's buying one property or multiple, people ... it's just human nature to share, and see or pass on that knowledge to other people so that they can try and achieve perhaps something that you have. 'Cause I think that not too many people that I've met in property investing are very selfish. They generally wanna see success in others that perhaps they've already achieved themselves.
Phil Tarrant: That's a really good point, you know, being a collegial culture like that. And I think people who are passionate and hungry about property investment want to surround themselves with other people who are passionate and hungry about property investment. I think we're fortunate today that ... in the days of old most times to actually get together with other property investors you had to go to one of those big property investment shows and someone would try to sell you off-the-plan apartments, right? It's a lot easier now, right? You've got stuff like this podcast and chat rooms and people do hook up and that. Are you quite conscious or cautious about the advice that you get from your peers, so other property investors? Do you hear other people sprouting bad stuff that you sit there just going, "That's just crap. Don't listen to it."
Morgan Harris-Bushell: Yeah, I think ... look some people do push their agendas, and I think you as a property investor, you need to kind of have a filter. So, whilst it's all good and well to have friends and other people giving you advice, so much information can get pushed at you. The main thing that I've kind of learnt as I've gone along my way is, you need to take a bit of everything, but don't take it as the gold standard. You actually need to go and figure it out yourself. So whilst it's good that someone will give you a property tip or whatever, you need to actually check that what they're saying is correct. I mean do my own research at the end of the day.
Phil Tarrant: Do you identify yourself as being a property investor?
Morgan Harris-Bushell: Yeah, I do actually.
Phil Tarrant: So you're a property investor?
Morgan Harris-Bushell: Yes.
Phil Tarrant: So what do you do for a living?
Morgan Harris-Bushell: I work in professional services.
Phil Tarrant: Okay. Like accounting or law or something like that.
Morgan Harris-Bushell: I work in banking.
Phil Tarrant: Okay. You work in banking. For a bank?
Morgan Harris-Bushell: Yeah, so I work at Commonwealth Bank.
Phil Tarrant: Okay. Cool. What sort of stuff do you do for the Commonwealth Bank?
Morgan Harris-Bushell: At the moment I'm an associate in their private banking division.
Phil Tarrant: Okay. That's cool. So you get to see high net-worth individuals, do you, and how they make wealth?
Morgan Harris-Bushell: Yeah, that's right. I do a lot of the number crunching. So I do a lot of home lending and also business lending applications.
Phil Tarrant: That's pretty cool. What makes high net-worth people wealthy, do you reckon? How do they do it? With an inside view that you've got, you know? Is property the key?
Morgan Harris-Bushell: Look, a lot of our clients, or the clients, I should say, I look after are ... they do have a lot of property assets. Some might be that it's perhaps an inheritance, or it may be that they've had a business and sold that, or it could be self-employed. There's a range of, I guess, people. But I guess the one thing that I've kind of noticed at least ... I've only been there for a year. The one thing I've probably noticed is, there's just the undeniable focus on what it is they are passionate about. And they just do most of what they can to achieve whatever that goal is.
Phil Tarrant: And is that helping you to set your own path as a property investor? And I'll ask you why you invest in property, I imagine you'll say wealth creation. But, is this helping you shape and frame the internal discussion or dialogue that you have to go doing what you're doing right now?
Morgan Harris-Bushell: Yeah, like it's ... there are certain traits that you see and it does make it quite ... it's kind of relatable in a way. Everyone who's driven, it's not just wealthy people, but sportsmen or people who start their own businesses, for example, they all have that relatability of, whether it's something that they're focused on or there's a reason, perhaps, why they're doing it.
Phil Tarrant: So why are you investing in property? What's your why?
Morgan Harris-Bushell: My why is, I'd love to be able to have a comfortable life later on down the track.
Phil Tarrant: How old are you?
Morgan Harris-Bushell: I'm 28.
Phil Tarrant: Okay. You got a long way to go there, anyway. You started early. Anyway, sorry to interrupt you. 'Cause I was going, "You look bloody young."
Morgan Harris-Bushell: No, that's right. Well, just through working in the bank and also seeing with perhaps some family friends of mine as well. I didn't wanna be working until 70 or late-sixties. I wanted to be able to have options later down the line. So for me it was, I need to pick something to give me that lifestyle. I tried different things, I tried shares. For me that didn't work out. Property was always something that I was working towards. Ever since I started working I was saving money. Didn't know what for at the time. But I then slowly figured out that property was for me. And that was just because I'd seen friends, family friends, do generally quite well. And I always knew in the back of my mind that you could do pretty well from property. But it didn't actually really cement to me until a colleague of mine gave me a property investing book.
Phil Tarrant: Which book was it?
Morgan Harris-Bushell: It was actually Steve McKnight's first book.
Phil Tarrant: What was it 200 properties in whatever years it was, yeah.
Morgan Harris-Bushell: Something insane. You can't do that today. But I remember reading that, and I actually read it in one night. And I'm not kidding, I really struggled to go to sleep that night, because I knew, just from reading that, that there was actually a pathway and it was possible to create the life that I was hoping to achieve.
Phil Tarrant: I think it's amazing that you've been able to crystallise this vision at such comparatively a young age, you know? Normally it takes people to get into their thirties and forties to start thinking about this stuff. So the fact that you've done it at a relatively young age gives you so many advantages over every other person who, at a point in time, wants to invest in property. You know, you essentially going to get maybe two market cycles more than everyone else for when you actually sit at that point at 60 or 50 or whenever you choose to retire. So it's good to get started young. Do you think you've missed anything out by going this way, or is this just organically, inherently what you wanted to do?
Morgan Harris-Bushell: Not really. I mean, like, yeah, look I have made sacrifices. Like not going on huge overseas trips every year, or splashing out and buying nice cars. Like, I don't have a car. I cycle my bike around quite a lot. And they're small sacrifices to me, because I'd rather save the money and put that towards my next deposit or whatever it is I'm trying to aim for, whether it's putting money aside for a renovation, for example. No, I don't really see it that way.
Phil Tarrant: And do you have this elusive, magic number that every property investor has that says, at a point in time if and when I choose to retire, whenever that age would be. It's a sliding scale for everyone. You look like you're probably on a earlier end rather a later end. Like, have you worked out how much money you're going to need as passive income so it allows you to stop working?
Morgan Harris-Bushell: My goal, obviously, would be to be able to replace my income. But just to get by, like it'd be a lot less than that. For me it's kind of both. Like I'd love to have enough income coming in to be able to not just worry about bills and stuff, but also have those options where thinking, "Okay, I don't have to worry about spending $10 on my lunch," for example, or whatever. Just like, little things like that would be awesome. But then also on the second side of that, having this kind of like nest egg that's gonna grow in value, and then I have even more options of what I could do down the line, too.
Phil Tarrant: I wanna gt into your property. We'll unpack it and have a look in a sec. But, who helps you in the rationalisation of where you're heading? Your goal setting? Do you do that all by yourself, or what's the process you take to set your goals, to know where you're going?
Morgan Harris-Bushell: I try and keep it as simple as possible, to be honest. 'Cause it's very ... I think it's pretty easy just to over complicate things. It's something that I kinda learnt when I was doing sport in high school and after high school. You really just have to think, "What do I wanna achieve?" And then you put that goal at the top. And then you think, "Okay, well, what do I need to do to get there?" And it's just a simple case of mapping it out and thinking, "Okay, if I just chunk things down, right down to the days. What do I need to do today to get me closer to that goal?" And that's as simple as it is. That's what I ask myself.
Phil Tarrant: And your goals then, we spoke about an income at retirement, but do you know how big your portfolio needs to be at that point in time unencumbered?
Morgan Harris-Bushell: Yes, I do.
Phil Tarrant: Have you set that goal so far?
Morgan Harris-Bushell: Yes, I do know, but with how things have changed in the lending landscape, that actually has made me move the goalposts. So for me I need to either increase my income or consider, perhaps, selling assets, repaying down debt and then going again. Like at this stage it's still something I'm working towards. I think for me, so for example I've got five properties and I'm looking for a sixth one. After that I could possibly go for two more, but then after that it's a case of, well, what do you do from there? And that's kind of a reality that I'm trying to adjust to now.
Phil Tarrant: And I think it's an important point for our listeners in that, it's good to set goals but goals change.
Morgan Harris-Bushell: Exactly.
Phil Tarrant: All the time. And it's okay if your goals have changed as long as you have a process to be able to review and analyse and work out what the next goal is or what the next iteration of that goal is. I guess the good thing for you is that, I imagine your salary is only gonna go up from here, right? You know, you're gonna go into the -
Morgan Harris-Bushell: Let's hope so.
Phil Tarrant: The peak earnings of your life at point in time. Working in financial services, professional services, particularly in private banking, you know, there's lots of different career paths you can do to help make some more money. But it's okay, I guess, for goals to change, as long as you know why those goals are changing. And there are some things that you can manufacture that will change your goals, so it'll be your choice, which will change your goals. And it might be getting married and having a family and stuff. They're choices you get to make. But there's other things which might change your goal setting which you can't control, like banks tightening up on lending or interest rates are increasing or property markets are slowing or the government makes a change to legislation around negative gearing. Things you can't control. So it goes hand in hand.
But the sophistication of your thinking now, where you are in your portfolio building is very mature, I think. And you can see you're getting quite a lot of different influences around it to help you do that, and you're not scared to make decisions, I imagine as well. You happy with change? A lot of people hate it.
Morgan Harris-Bushell: Well, I think it's a great thing. As long as you're flexible. If you get stuck in your ways that's, I think, when you start to go backwards. Not just as an investor but probably as a person as well. You need to kind of, as long as you've got the goal, whatever it is, you just need to flexible with how you move around that.
Phil Tarrant: So, you said, five properties and you're looking for number six at the moment?
Morgan Harris-Bushell: Yes.
Phil Tarrant: So, where are these properties? Let's just quickly run through them, if you're happy to give us some numbers?
Morgan Harris-Bushell: Yeah, let's go through it.
Phil Tarrant: Let's see how good you know, 'cause Morgan hasn't got any notes in front of him.
Morgan Harris-Bushell: I brought nothing.
Phil Tarrant: So I'm gonna test him here on how good his memory is, his portfolio.
Morgan Harris-Bushell: First one is in Wagga Wagga.
Phil Tarrant: Wagga. When did you buy it?
Morgan Harris-Bushell: I bought it in 2013.
Phil Tarrant: How much?
Morgan Harris-Bushell: Bought it at $171,000.
Phil Tarrant: Cool. Valuation now?
Morgan Harris-Bushell: About $200,000.
Phil Tarrant: All right. Cool. What sort of yield you getting? Or rent?
Morgan Harris-Bushell: At the moment it's probably about 7%.
Phil Tarrant: Okay. That's pretty good.
Morgan Harris-Bushell: Yeah.
Phil Tarrant: Is that after all costs or is that gross?
Morgan Harris-Bushell: That's gross.
Phil Tarrant: Okay, cool. All right, Wagga Wagga. What was next?
Morgan Harris-Bushell: Orange.
Phil Tarrant: Okay. Pattern here. When did you buy that?
Morgan Harris-Bushell: I bought that the year after, so 2014.
Phil Tarrant: 2014. How much you pay?
Morgan Harris-Bushell: $80,000.
Phil Tarrant: Okay. What's it worth now?
Morgan Harris-Bushell: About $200,000.
Phil Tarrant: Okay. All right. Well there's a bit of a story there. We'll get back to that. And what sort of yield you getting?
Morgan Harris-Bushell: Gross, 14.
Phil Tarrant: Okay. After Orange, number three?
Morgan Harris-Bushell: Kingston, in Queensland.
Phil Tarrant: Kingston? Logan Shire.
Morgan Harris-Bushell: Mm-hmm (affirmative).
Phil Tarrant: Okay. I've got a place there. When did you buy it?
Morgan Harris-Bushell: I bought that in 2015.
Phil Tarrant: Okay. How much you pay?
Morgan Harris-Bushell: $215,000.
Phil Tarrant: $215,000. Today, what do you reckon?
Morgan Harris-Bushell: Probably $320,000.
Phil Tarrant: And the yield?
Morgan Harris-Bushell: Yield on that, it's probably about 7%.
Phil Tarrant: Seven percent. Okay. Property number four.
Morgan Harris-Bushell: Browns Plains.
Phil Tarrant: Yup. Browns Plains. Purchased in 2016, I imagine.
Morgan Harris-Bushell: Yes.
Phil Tarrant: What did you pay?
Morgan Harris-Bushell: I bought that for $255,000.
Phil Tarrant: Cool. Today valuation?
Morgan Harris-Bushell: $360,000.
Phil Tarrant: And I reckon a yield about 7%.
Morgan Harris-Bushell: Correct.
Phil Tarrant: Okay. All right. Property number five?
Morgan Harris-Bushell: Kippa-Ring.
Phil Tarrant: Kippa-Ring. All right. On Anzac Parade or Anzac Avenue, I imagine. Somewhere around there.
Morgan Harris-Bushell: Close.
Phil Tarrant: Yeah, okay. Kippa-Ring's cool, at the moment, all the new train lines gone in there. Very, very popular. Purchased in 2017?
Morgan Harris-Bushell: Ah, yes.
Phil Tarrant: How much you pay?
Morgan Harris-Bushell: I bought it for $340,000.
Phil Tarrant: Okay. And now?
Morgan Harris-Bushell: Probably say it's $390,000.
Phil Tarrant: Probably getting about 6.5% on that, I imagine.
Morgan Harris-Bushell: It's probably more a five, actually.
Phil Tarrant: Five. Okay, cool. But that's probably zoned.
Morgan Harris-Bushell: It has potential.
Phil Tarrant: Yeah, it has potential. 'Cause the whole new, what is it housing something plan through there?
Morgan Harris-Bushell: Yes.
Phil Tarrant: Okay, five properties in the portfolio. We went through that pretty quickly. What would you say the total value of the property is? Portfolio?
Morgan Harris-Bushell: I would say that the property portfolio is currently worth about $1.5 mil.
Phil Tarrant: Okay. And how much debt do you reckon you're carrying on all of that?
Morgan Harris-Bushell: Probably just shy of about a million, I'd say.
Phil Tarrant: So, you reasonably high LVR. What's your feelings towards that? Do you think it's something that you're comfortable with carrying that much debt against this portfolio?
Morgan Harris-Bushell: Yeah, so when I started out I kind of assessed what my risk tolerance was, and for me I realised that I need to go through an acquisition phase, and that's kind of how I've gone about it methodically. So from a risk perspective, no, it doesn't really bother me too much. And how I've kind of put myself in a position with that is, I've gone after properties that have high yields, and for me that means I'm not taking any money out of my own pocket. So my whole portfolio is averaging bout 6% gross.
Phil Tarrant: So it is a positive portfolio at a gross level?
Morgan Harris-Bushell: Yeah on a gross level.
Phil Tarrant: So after tax it's even better performing. And do you hold all these assets in your own name or did you set up a trust or anything?
Morgan Harris-Bushell: I hold the first one in a trust, so the Wagga property. And then the ones after that are all in my personal name.
Phil Tarrant: Is there any reason why you set that up, the first one? Did you get some advice around it?
Morgan Harris-Bushell: Yes. I was pretty naïve at the time and didn't really know what I was doing, and I really just took advice from my accountant on that. After just being in the property market for a little bit longer I kind of realised that was not really in line with my goals. So it was advice that I unfortunately took.
Phil Tarrant: One of the properties that jumped out at me, and I saw two regional properties, and then you've moved into more metropolitan properties. Your last three are sort of metro based. But this Orange property that you purchased for $80K, now worth $200,000, and you're getting a yield of about 14%. Were you just lucky? Did you find something that no one knew about or the Orange market's gone crazy?
Morgan Harris-Bushell: No, no. It wasn't any luck. It was just looking online, to be honest. So perhaps kind of the backstory to it, if anything, is after I'd bought Wagga, I'd saved a fair bit of money and I'd put a lot into that, and I didn't really have a lot afterwards. And I thought, "Well, geez, I've really shot myself in the foot." And at the time I couldn't really afford things that were going off in western Sydney, once I kind of figured out where to buy. So I was priced out of that market. And I kind of realised, I needed to find something pretty cheap.
So that's when I just started looking regional again, 'cause I figured, Well, I wanna get something in New South Wales. I want something that's cheap, and I actually wanted to get my hands dirty and do a bit of renovating. And this property just came up online.
Phil Tarrant: What is it? Like a house?
Morgan Harris-Bushell: Yeah, it's a house. It's a two bedroom, one bathroom, one car. And I came across it because it just appeared online. It was a fire burnt house, basically. So it was a sell-off by the Housing Commission. I went to look at it the week before and I actually registered for bidding over the phone, 'cause the week after when they had the auction, it was actually my birthday so I couldn't be there.
Anyway, I was successful in the auction. I got the property. And all of a sudden I had property number two. And I had a huge task on my hands.
Phil Tarrant: How fire damaged was it?
Morgan Harris-Bushell: You could see inside the house from the street. Like, the whole front façade was gone.
Phil Tarrant: Is it sort of in the centre of Orange or out in the suburbs?
Morgan Harris-Bushell: It's kind of more out in the suburbs. Like, if you've been to Orange, it's kind of close to Bunnings. But not in like probably one of the really bad suburbs. In the suburb itself it's got a bit of stigma about it, but the actual street itself is not too bad.
Phil Tarrant: Pretty good. So bit of a diamond in the rough. So $80K purchase price. Couple of hundred k valuation now. So you've brought it up to where other properties would be in the market. How much did it cost you to do that?
Morgan Harris-Bushell: It's been my biggest renovation to date. I spent $50,000 on it.
Phil Tarrant: Okay. And is that absolutely everything you had to get redone?
Morgan Harris-Bushell: Everything. Everything. So after I bought it I kind of thought, geez what have I done to myself? And then it just became a reality of, I've gotta get builders lined up to do structural things. Things I didn't have skills in doing. And then I focused on what I could do, which was painting, lots of cleaning, I suppose.
Phil Tarrant: All the sort of non-skill stuff.
Morgan Harris-Bushell: Yeah, non-skills. Like sourcing guys to do carpets, electricians, plumbing, landscaping. The whole works.
Phil Tarrant: How did you manage that with a full-time job? Did you drive up to Orange every weekend?
Morgan Harris-Bushell: No. So what I did was, I took time off work. And at the time I had about four weeks of annual leave accrued, so my dad and I went up and just started working on the property.
Phil Tarrant: That's cool.
Morgan Harris-Bushell: So when the builder was there, we were there. We were kind of project managing it. And it wasn't easy. Like the things that we did just to save a dollar was pretty insane, now that I look back on it. Like we were sleeping on the kitchen floor on inflatable beds.
Phil Tarrant: You actually slept in the property while you were renovating it?
Morgan Harris-Bushell: Yes. You know, we didn't have plumbing, so we'd have to go to the local town pool to shower.
Phil Tarrant: Cool.
Morgan Harris-Bushell: Yeah. We went through the-
Phil Tarrant: Must have been quite nice looking back, you know, good times.
Morgan Harris-Bushell: Oh, it was. Looking back, and we just ... like me and my dad still kinda laugh and shake our heads about it and just think, "Geez that was a good experience and hard work, but it really paid off."
Phil Tarrant: Does your dad have any trades or anything behind him?
Morgan Harris-Bushell: Just self-taught.
Phil Tarrant: Just self-taught.
Morgan Harris-Bushell: Yeah.
Phil Tarrant: Getting stuff done. So I imagine you're pretty reasonable renovator after that. So you've done most jobs.
Morgan Harris-Bushell: From knowing absolutely nothing, like not even knowing how to paint, I definitely learnt a few things. And those kind of things that I learnt helped me with future projects a lot.
Phil Tarrant: As soon as you did the work, did you do another valuation on it?
Morgan Harris-Bushell: Yes.
Phil Tarrant: And did the bank val come in at 200 grand, did it?
Morgan Harris-Bushell: Yes.
Phil Tarrant: Okay. Were you pretty happy with that?
Morgan Harris-Bushell: I was absolutely stoked. I thought, oh, what's the bet it's gonna come in at cost and I'm gonna be overcapitalized and I'm gonna be stuck. But it came back with a market valuation.
Phil Tarrant: So you spent $80,000 plus stamp duty, plus legals, plus whatever. So you're probably in for about $100,000 anyway. And then you dropped another $50,000 on the reno. So $50,000. Which, $50,000 on $80,000 is not a bad return. Or $50,000 on $100,000, at least. That's cool.
Did you have to sell it to the valuer when they come in? Did you meet them there and say, "Here's the photos of how it used to look. Here's how it looks now?" Did you sell them?
Morgan Harris-Bushell: I didn't actually have to do any of that. Luckily, when I was doing the whole process, it was actually just through the bank and them using their valuers.
Phil Tarrant: You've gone through a process of manufacturing equity in that property for a reason. And then subsequent to that, these next three properties, have they all been reno projects?
Morgan Harris-Bushell: Yes.
Phil Tarrant: They have been. So Kingston was the next property. What did you buy up there? What sort of property?
Morgan Harris-Bushell: So it was a highset.
Phil Tarrant: A highset.
Morgan Harris-Bushell: And it was three bedroom, one bathroom, two car.
Phil Tarrant: And was it filled in below, or was this nothing.
Morgan Harris-Bushell: No.
Phil Tarrant: Okay. And what did you do there? Just sort of cosmetic reno?
Morgan Harris-Bushell: Yeah. It's been my cheapest reno. I did a $25K reno on it. Most of it was just clearing the place out. Like, I bought it off a deceased estate, and the place was incredibly dirty.
Phil Tarrant: Just crap everywhere.
Morgan Harris-Bushell: Just crap everywhere, and we had to fill a few skips of just stuff.
Phil Tarrant: Did you do that as well yourself?
Morgan Harris-Bushell: No. So I learnt from Orange that it's sometimes better to use your money to be a smarter property investor. I didn't pick up a paint brush. I think the only thing I really did was go get blinds. And that's because I was up there just inspecting the property with my builder. Yeah, I didn't do anything with this one myself.
Phil Tarrant: And how did you work out how much to spend on that renovation? Was it just enough to get it rented? Was that the idea?
Morgan Harris-Bushell: No. I kind of had gauged how much it needed to be, but to really know for sure I actually lined up a few builders before I'd even bought the property. And that was just through leveraging relationships. And I kind of got a feel, like a gut feel from them, and just said, "Look, is there anything that jumps out to you? How much do you think it would cost?" It was a very cosmetic renovation. Nothing structural needed to be done.
Phil Tarrant: Did you get the local agents involved at all on what work you should be doing there?
Morgan Harris-Bushell: Yeah. So when I was starting out, I didn't know anyone in that market, so I kind of had to rely on I guess, warm referrals from people. So a friend of mine was buying in the area, and I just said, "Look, do you know anyone?" And he didn't, so I then kind of relied on the real estate agent. I just said, "Look, I really need someone who you can recommend. Do you have anyone?" And it just so happened that they did. And that's something that I kind of learnt from working in Orange. You don't just get Yellow Pages and call someone. It's better when you've got that relationship, at least, 'cause then you know for sure that they're gonna do a good job and not do anything dodgy.
Phil Tarrant: Yeah. It's cool. And Browns Plain, was that another reno? Was it a major one or cosmetic?
Morgan Harris-Bushell: So that one was both, yeah. And there was a surprise with that one. When we got into the building and started doing a bit of work, we noticed that there were some internal wires in the roof that needed to be removed, as well as the roof. One of the supporting beams.
Phil Tarrant: Exterior, okay.
Morgan Harris-Bushell: Internally, sorry.
Phil Tarrant: Internally.
Morgan Harris-Bushell: Internally. And that was very weak, water damaged. So we had to fix that, and that cost a little bit.
Phil Tarrant: You never know what you're gonna get. And your pest and building didn't spot it?
Morgan Harris-Bushell: Well, no. Part of my negotiation on that one was, I knew it needed renovating. I didn't need a pest and building to tell me that. And with how well I bought that I kinda knew that it was gonna be, even if there was a blow-out by 10-15 grand, I could still kinda cushion that.
Phil Tarrant: Cop it, yeah.
Morgan Harris-Bushell: And it just so happened that there was. Which was unfortunate, but it was okay because I'd mitigated that.
Phil Tarrant: And your most recent property in Kippa-Ring, is that reno job, or you've done a reno on it?
Morgan Harris-Bushell: Yeah, so that one was more of a cosmetic reno. And I actually went and did a bit of that myself. So from Orange, the two after that I did nothing, and with Kippa-Ring, even though I didn't have to, I kind of wanted to get involved again. So I went up over a weekend and just did some painting, really. And I kind of did the more time-consuming jobs that perhaps my builder would have done, and that's just something that I wanted to do, to be honest. So, that was good.
Phil Tarrant: It's cool. And is anyone helping you buy these properties? How are you choosing where to buy and what to buy? Are you doing all yourself?
Morgan Harris-Bushell: Yeah, good question.
Phil Tarrant: What's your process for doing it?
Morgan Harris-Bushell: I've sourced all these properties myself. And I did dabble in the idea of using buyer's agents or professionals like that, and I even interviewed a few as well. And it got to the point where, they'd tell me what they would do, how it suits me, and what the fee was. For me, I just couldn't get past the fee. I just thought, "If someone's gonna me 4-10 grand to find a property, could I find that for them?" And the answer was always yes, so.
Phil Tarrant: That's fair enough.
Morgan Harris-Bushell: And just for my own development as an investor, like, I wanna be able to find the properties myself. And, who knows, I might be too busy to have the time to do that, so I felt it was a pretty crucial skill to have and develop. So that's how I went about it.
Phil Tarrant: Irrespective of if you use a buyer's agent in the future, you actually know the process yourself in and out now, and you can challenge your buyer's agent more effectively.
Morgan Harris-Bushell: Don't get me wrong, I do think that there is that kind of value for service, and I do know guys that use it for various reasons. But you're right, if I ever go down that path, I know what to look out for and look after my own interests as well.
Phil Tarrant: So, do you reckon you've bought well? Like, have you bought most of these properties under market value, if you think that is buying well?
Morgan Harris-Bushell: Yeah, like that's kind of what I focused on, after I learnt from the Orange property I bought, is looking for properties that were, I guess, below market value. Adding value through renovating and then revaluing after that and then using that equity to then go on to the next one.
Phil Tarrant: I speak to a lot of investors and hear this story of people doing this and then they become a buyer's agent at some point in time. Are you gonna go down that path? Is that what you wanna be, a buyer's agent when you grow up?
Morgan Harris-Bushell: I'm not entirely sure what I wanna do when I get to the end of the lending cap on myself. So, who knows? Maybe that. Maybe mortgage broking, perhaps, given I work in finance. I dunno. I haven't really thought about that yet.
Phil Tarrant: If you choose any of those particular routes you've got the experience, which I think is essential to be good at, whether it's broking or buyer's agent, whatever you choose to do. So what's next? So you obviously wanna get to property number six?
Morgan Harris-Bushell: Yes, that's right. So, I haven't exactly settled on where I wanna go next, but after buying my Kippa-Ring property, I kinda want to go for something that's more of a cash flow play now. And for me, I haven't quite decided which state, whether it's South Australia, Queensland or even Tasmania. At this stage I'm kind of at a macro level where I'll need to do a bit more research.
Phil Tarrant: That's cool. Well, Morgan, we've run out of time. It's like 40 minutes. It's quite a long one, isn't it? Adam, yeah, he's nodding and rolling his eyes at me, our producer here, but he's telling me to wind up. There's so much more I wanna chat to you about. I think it's impressive story and you're obviously backing yourself, and I think it's important thing as a property investor that you do back yourself. The bad property investors I see are those that can't make decision or procrastinators, and I don't think you fall into that basket. You're out there doing your thing and taking control of your future, and I think that's the way it should be.
So when you purchase your next property or so, let's get you back in six months time and you can give us an update. I wanna understand how you're managing all these properties as well. Who's doing it for you and just how you measure your portfolio. Because the point we made is that you're reasonably highly-leveraged, but you are in this acquisition phase, so there is a cycle to every portfolio, and at a point in time I imagine you would stop doing what you're doing.
Morgan Harris-Bushell: That's right.
Phil Tarrant: You'll either look to pay down debt or these properties will go up in value. And the areas that you've bought, you know, Queensland, like Kippa-Ring and Kingston property, I think you can probably do pretty well there, but anyway. I've enjoyed the chat, Morgan. Thanks for sharing your story, mate. How was it coming on the podcast?
Morgan Harris-Bushell: It's not bad at all.
Phil Tarrant: Easy.
Morgan Harris-Bushell: It's just like having a chat with a microphone in your face.
Phil Tarrant: It is, isn't it? So would you recommend everyone else come on, and reach out and get involved and come in and share their story?
Morgan Harris-Bushell: Absolutely.
Phil Tarrant: There you go. You heard it first.
Morgan Harris-Bushell: Great experience.
Phil Tarrant: Nice one, Morgan. But, yep, do keep in touch, mate, let us know how you're getting on.
Morgan Harris-Bushell: Thanks.
Phil Tarrant: That's really good. If you'd like to come on the show, you're more than welcome. Touch base with the team. [email protected] If you email that, they'll hook you up with the right guy to arrange coming on to the show, and we'd love to have you on, whether or not you've got one property or 50 properties. Whether you're 18 years old or 80 years old, you know, everyone's got a story to tell, and we're happy to share that.
If you're not subscribing yet to our daily morning marketing intelligence, so you first know what's going on in property investment, smartpropertyinvestment.com.au/subscribe. And if you like to get your info from social media, just search Smart Property HQ. You can find us, like us, follow us and what we're up to. If you like what we're doing, please keep those reviews coming. Wherever you're listening to this, you can leave five stars there. The team really do appreciate the feedback.
We'll be back again next time. Until then, bye bye.
Announcer: The information featured in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon. Before making any investment, insurance, tax, property or financial planning decision you should consult a licenced professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.
About the Blogger
More from this writer
- PORTFOLIO UPDATE: How we renovate to increase tenant longevity
- Airbnb’s impact and why more investment properties are being sold
- Q&A session with Simon Pressley - The answers you wanted
- Being financially ready for when the unexpected occurs
- INVESTING INSIGHTS WITH RIGHT PROPERTY GROUP: The positives and negatives of diversification