Investing with family: The good, the bad and the ugly

But that was exactly what happened. Sharing her experience on a recent episode of the Smart Property Investment Show, Kate recalls how the COVID-19 pandemic left her feeling isolated from her family and community. Having moved to Melbourne to study journalism, and then relocating to the Bega Valley, Kate has gotten used to living a nomadic lifestyle. Nevertheless, the isolation of COVID hit hard.

Few people would choose a joint property venture as a family bonding activity. Mixing personal relationships and business transactions is notoriously messy, and emotions can easily run high.

For Kate, however, financial pressures left her with no other choice. The seven-acre hinterland property in Coffs Harbour that she had fallen in love with cost $350,000, and Kate could only fund a fraction of that herself.

Against the advice of her solicitor, Kate’s struggle in acquiring a loan forced her to turn to her family. Eventually, she managed to secure the support of her mum and sister, and they went into the Coffs Harbour property together.

“At the time,” Kate recalled, “my solicitor said to me, ‘This is complicated and this is messy and this never really goes well.’” But it was her only option at the time if she was to move closer to her loved ones on the Coffs Coast.

Kate was immensely grateful to have the support of her mother and sister. Despite that, she couldn’t help the lingering feeling that part of her property dream was being compromised.

She had always dreamed of constructing a sustainable, earthen home. Ever since watching a documentary on earthships in her youth, Kate had longed for the chance to build one for herself.

The site she had found on the Coffs Coast seemed to fulfil all her wishes. An steep, overgrown block of land on an old banana plantation, Kate’s seven-acre site was the pocket of wilderness of her dreams. When passers-by asked Kate what she was growing on the site, she would jokingly tell them that she was growing Japanese sunflower and lantana.

But when Kate took out the loan with her mum and sister, she set her earthship dreams aside.

“When I had my family involved in the land, I was looking at kit homes,” Kate said. “I didn’t want to do all the blood, sweat and tears on a house if the asset is partly tied to other people.”

But as time passed and Kate’s financial position stabilised, she realised she could buy her family members out. Going back to her solicitor – who wasn’t surprised to see her again – Kate arranged to purchase her mum and sister’s shares of the property.

It was a painful purchase – the COVID-19 property boom had almost doubled the price of the site, and Kate was forced to fork out $300,000 more than she had originally intended. Nevertheless, the freedom Kate felt after the purchase was worth the pain.

Suddenly free to get started on her sustainable property dreams, Kate enrolled in a construction course at a local women’s workshop in the Bega Valley and built her own tiny home. She had zero prior construction experience, and learned everything on the fly with the aid of YouTube tutorials.

When she had finished, and the tiny home travelled the 800-kilometre trip up to Coffs Harbour, Kate was thrilled to have a home on the banana plantation at last.

“It was such an amazing feeling that first night being in the tiny home, glass of red wine, makeshift couch, but just being in this building that I had built which was solid and safe,” she shared.

Now, as Kate gets set for the next stage in her property journey, her family story comes full circle. Over the next few years, she plans to build a three-bedroom freestanding dwelling out of earthen materials – and the tiny home will be a retirement haven for her mum.

“Part of the buyout was that I would have a retirement asset for her, and a tiny home fits that bill perfectly,” explained Kate. “It will be her little safety net into the future.”

“I couldn’t have done it without that support,” Kate reflects gratefully. “I really acknowledge the privilege that I have to be sitting on seven acres,” in a beautiful property that her family helped her secure.

Hear more about Kate’s unconventional journey in property and investing here.