After acquiring her first investment property, investor Katarina Taurian plans to remain low-risk throughout her wealth-creation journey. Can investors maximise their earning potential while being averse to risks?
Knowing that property investment entails a lot of considerations—from finances to asset management—the budding investor immediately sought the guidance of property professionals as she transitioned from being a homeowner to becoming a rentvestor.
Apart from helping her understand the ins and outs of the venture, Ms Taurian also used the guidance of multiple professionals to help her make investment decisions that are within her risk appetite.
For instance, instead of using the large deposit she has to purchase a few separate properties as advised by one financial adviser, she decided to settle on just one property for now. While multiple purchases sound more lucrative, the budding investor deemed the strategy too risky for her at this particular point in her journey.
According to her: “I'm particularly pleased that I didn't go down that path. I learned that, with my first mortgage, the sleep test is so important. I'm gradually becoming a lot more steady and a lot more comfortable with the level of debt that I'm in. I think that strategy will be a lot more useful in the years to come.”
Like most property investors, Ms Taurian plans to grow her asset base and hold them for the long-term to achieve a good balance between cash flow and capital growth.
After sorting out her finances and doing minor cosmetic renovations to her property, the budding investor set out to find a tenant.
True to her low-risk profile, Ms Taurian remains keen to have professionals by her side as she moves forward in her property investment journey. Similarly, she wants every choice to pass her ‘comfort test’.
She said: “I got a property manager. Paid possibly above market rate for because I wanted someone that passed the comfort test for me and I wanted someone very local as well.”
“It remains to be seen whether that was necessarily a good investment choice, but they're doing a great job so far. Their reporting is really good for tax purposes, so I'm really pleased with that. Ultimately, they got me the tenant that I wanted.”
The process of finding tenants for Ms Taurian’s property was saved from being arduous—thanks to her property managers.
“They had quite a few applicants but they said, ‘Here's two out of 20 that we think is going to pass your test.’ That was how they approached it,” according to the budding investor.
Much like the decisions she made prior to putting the property up on the market—from sorting out her finances to engaging professionals—Ms Taurian was also adamant that her tenants pass her comfort test.
In fact, as smooth as the process became because of her property managers, it took quite some time before the place was filled.
She said: “If I was less fussy I would have been able to fill the place immediately. I didn't want students and I didn't want anyone with dogs, so that immediately sort of crossed off half the list.
“But once there was someone who met my specs, very smooth from there. Someone else took care of it for me and they're in and they're taking care of the place.
“Again, it remains to be seen if I necessarily made the right moves for my portfolio and if I was more just acting on my own sort of anxieties there. But it's working and it is washing its own face, as you say. So, yeah, it suits me at the minute,” Ms Taurian added.
Despite the extra time and costs that she had to deal with, the budding investor believes that doing away with anxieties is a huge part of property investment success.
After all, investing in property is bound to be a long-term commitment and, above everything else, she wants to be able to hold her current and future assets for as long as she could in order to truly maximise their earning potential.
“It’s important to me that someone was going to take care of it. It’s about preserving the asset as well,” she highlighted.
As she goes on to grow her wealth through investment properties, Ms Taurian will continue to do due diligence, seek the guidance of industry experts and professionals and ultimately factor in her risk appetite in her decision-making.
As she tends to be a little too anxious, having her team of professionals throughout her journey will help her balance opportunities and manage risks.
For instance, disregarding her initial choice to wait almost 10 years before purchasing her next property, her accountant made her realise that expanding her portfolio could be easier than most people think.
According to Ms Taurian: “Originally, I went to my accountant and said, ‘I'd like another property by the time I'm 40’. He laughed in my face and said, ‘I'm pretty sure we can do it before then.’”
Still, she wants all of her decisions throughout her investment journey to be within her risk appetite, considering her current status and the possibility of life changes in the near future, such as having her own family.
“I do want to expand my portfolio, but I'm certainly not looking to have dozens under my belt. I'm considering that I could possibly have time out of the workforce and, just knowing my personality, I'm keen for anything I own to have significant equity behind it. Definitely not big on risk,” the budding investor highlighted.
The budding investor is currently focusing on paying down as much of the mortgage as she can and saving for her next purchase. Before making her next major move, she’s keen to see where the property market goes, particularly in Sydney.
According to her: “The comfort zone, I’m just getting back into it. My ideal is to buy again in Sydney because that's familiar to me and the properties and areas here I understand. But I'm not sure what that market is going to look like within the next five years, so we'll see, really. I'll start genuinely considering it within the next three years
At the end of the day, instead of having a grand, billion dollar-portfolio to her name, being able to grow a substantial nest egg suited to her lifestyle is the ultimate goal.
For Ms Taurian, property investment is not necessarily about taking big risks.
“I think there's a million different ways that you can buy property and there's a million different ways that you can accumulate wealth through property. This is just mine. Just go with whatever suits your risk appetite,” she concluded.
Tune in to Katarina Taurian's episode on The Smart Property Investment Show to find out more about how she has plans to move forward in her property investment journey.