From rookie to confident owner: How new investors build lasting portfolios

“Financially, it started to make sense,” Messina said.

“I had some strong stability in my job, which gave me the confidence to go ‘alright, now it's time to pull the trigger.’”

Despite experiencing an up-and-down journey when buying his first property, Messina said that he was already looking forward to making a second investment.

“I’d like to go again tomorrow if i could, but we are just going to have to be a bit patient on that one.”

Getting started

According to Messina, one of the first obstacles he faced when starting his investment journey was overcoming a fear of the unknown.

“So the biggest fear was knowing I had to invest outside of the state and not knowing what those markets look like or what areas to look into.”

To counter his fears, Messina decided to overcome his own knowledge gap by going through the process with the help of a buyer's agency.

Clifford said that many first-time investors have to overcome fears and doubts when starting their portfolio.

“At the end of the day, you are making one of the biggest financial decisions that you’re going to make in your life,” he said.

“You want to make sure the decision you make isn’t going to turn into a mistake.”

Location is key

When considering buying a property in an unfamiliar location, the experts emphasises the need for investors to understand the local area and various data sets before making a decision.

Messina said that while he was worried about investing in an area he wasn't familiar with, he became more confident after seeing the area reports prepared by his buyer’s agency team.

He said that the report's in-depth nature made him feel the decision he made was correct.

“There was just so much there that I was like, I wouldn't have even thought about even considering that as information to take on board before purchasing a property.“

Vidler said that an in-depth analysis around the property can alleviate some of the pressure on making sure it will see growth in the long run.

“One of the most important things is you want to be in the right location, because that is going to drive performance,” he said.

Slow down

While buying a first property can be exhilarating, Messina urged investors to remain patient.

He said that throughout the process, he had to learn how to be patient and maintain communication with his buyer's agency to alleviate his concerns when things took longer than he expected.

“There were challenges, but that came from me not really understanding how long it could take to finalise a deal and get responses back.”

“Not just from you guys, because I started to realise that you guys were also waiting to hear back”

“I needed to go ‘alright, take a breather’, don’t be so impatient with it.”

Additionally, Messina said a key advantage for investors having a professional team to help was their experience in handling issues as they come up.

“Think about the worst-case scenario when purchasing the property and then what you do next and where you go from there.”

“If you don't have an answer for that, then you have to find someone that's going to give you those answers.”

First landlord’s nightmare

After finding and purchasing a property, Messina was confronted with his first landlord nightmare when tenants moved out of the property the day the sale had settled.

He said that instead of panicking, he asked for professional help to figure out what was the appropriate course of action.

“Considering it’s in another state, I wouldn’t have known where to start,” Messina said

“It wouldn’t have been smooth, I guarantee that.”

According to Vidler said that investors should have a plan in place for how to handle when their property is unoccupied.

“At the end of the day, tenants are people and they can up and leave,” he said.

“There are certain things that are flow on effects from that, but ultimately, it’s their choice,”

Time and dedication

Having completed the journey to his first property, Messina said that he now has a greater understanding of investing.

He said that he had initially underestimated how much of his free time the process would take up.

“I felt that I was going home and spending hours in front of my computer just figuring out what I needed to do on my end to make sure that we could purchase a property without having to find the property and do all the due diligence.”

“If you don't think you have the time, the effort and the answers, you're going to need someone to help you to get into the market for sure.”

In Australia, there are a lot of ‘property enthusiasts’ who, Clifford said, can confuse investors as they hear conflicting ideas and strategies.

He said that being supported by a buyer’s agency can help investors cut through the noise.

“I speak to dozens of people every week, and there are so many that are kind of on the fence,” he said.

“They get to a position where they’ve got ‘analysis paralysis.’”

Despite the challenges he faced throughout his journey, Messina said that the result made it all worth it.

“We are property owners now.”

“I think that is more rewarding than anything else,”

Keeping the ball rolling

When building a portfolio, Vidler said that most successful investors maintain the momentum from their first investment property rather than “taking their foot off the gas” resting on their single purchase.

Similarly, Clifford said that investor momentum tends to wane when purchases aren’t set up properly to allow flexibility in the long run.

“If they've structured things in a way where you can't really tap into it, even though you've seen that grow, there's other things that you potentially could do from a restructuring perspective.”

“But a lot of people get stuck, and then they lose the motivation, and then that's where the drive dies off,” Clifford concluded.

You can listen to the whole episode here.

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