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Stephanie Brennan was only 22 years old when she bought her first property in the Northern Beaches of Sydney. In under four years, she successfully acquired eight more properties and went on to become Australia’s youngest property tycoon. Can today’s millennials follow in her footsteps?
Before she dabbled in real estate, Ms Brennan went through an “elimination mission” to find her purpose. She drove a taxi, explored engineering, marketing and sales, offered professional help in business operations and even served the government of NSW as a policy adviser.
In 2012, she started working for a property management company and, since then, she has not turned her back on real estate. For her 22nd birthday on the same year, she signed the contract for the purchase of her first property in Manly Vale.
Was it hard to enter Australia's property market and keep her head above water amidst unpredictable movements? Not at all, she said.
According to Ms Brennan: “It is hard if you don’t know what you’re doing. There is a lack of knowledge and guidance in the market, I think that’s true, but it’s not hard to do well in property.”
“If you find the right professionals to engage with, then it’s not hard. The expert in anything was once a beginner and that’s important to remember as well,” the avid investor told Smart Property Investment.
At the moment, the self-made property mogul owns nine properties spread across Australia, the United States and Scotland, all amounting to over $3.1 million.
Ms Brennan has since continued growing her multi-property portfolio through different strategies while also working to share her knowledge to her fellow young investors as a property advisor.
“As an avid entrepreneur and investor, I’ve seen all kinds of ups, downs and experienced many moments of self-doubt, but throughout this my vision to build wealth and help others do the same has always remained clear,” she said.
After building a substantial portfolio at a young age, her goal is to own a total of 22 properties and retire by the time she turns 30.
Ms Brennan graduated from the University of Sydney with a certificate in Corporations Law, Criminal Psychology and Forensic Psychology in 2009. She went on to complete business law, management, human resources, accounting and marketing courses in the International College of Management in Sydney before seeking formal education on real estate, finance and mortgage broking.
At the age of 20, she became a policy advisor to Bronwyn Bishop and went on to start her own business consultancy.
Early on, she knew that she wanted to create her own path for wealth-creation, inspired by her family of entrepreneurs, particularly her father who started his own business at 21 and worked as an insurance broker. However, she struggled to find her true passion.
She initially wanted to enter the stock market but after being given the opportunity to work with accomplished property investors, she realised the great potential for good returns in property.
Before buying her first property, Ms Brennan sought to gain a deeper understanding of property investment, so she spent years working in a property management company and a real estate agency. She sold a property for her sister, written business plans and oversaw a 1,400-portfolio.
When it was time to make the purchase, she saved up around $100,000 for the deposit through years of working and saving — from cleaning, working at Pizza Hut and the supermarket and painting houses to keeping her $125-a-month pocket money and birthday money over the years. She also got her parents to act as guarantor for $60,000 using their family home in Belrose.
The then-budding investor was initially turned down for a mortgage, but on her 22nd birthday in October 2012, she was able to finalise the purchase of her first property, a $386,000-property in Manly Vale. After merely four years, the property's value has grown to $700,000.
The first investment lessons she learned: Learn to sacrifice and don’t be afraid to start small.
According to Ms Brennan: “You can’t have it all at the start and you really need to work your way up and build up. There were plenty of things that I went without. I’ve learnt to cut my hair ever since I was 15. Even though I have the money now, I don’t spend money on that because I want to look at paying down and investing more.”
“It’s still easy enough to get into the market if you’re willing to put in the effort. There are still properties that you can find that aren’t ridiculously priced in Sydney, on the northern beaches or on the north shore, or even in Bondi.
“It’s only a matter of being willing enough to put the work in and actually go for it,” she highlighted.
Throughout her investment journey, Ms Brennan continued to marry modesty with ambition, investing in sensibly priced properties located in blue-chip geographies. To date, most of her properties were bought for under $400,000.
Over the past six years that she’s spent investing in property, Ms Brennan has implemented different strategies to get her the best long-term results.
According to her, the goal was always to establish a substantial nestegg for her retirement, which is why she is adamant to take on a long-term perspective when making investment decisions.
Aside from opting for blue-chip locations, Ms Brennan also actively tries to avoid rural areas and so-called ‘property hotspots’ due to higher level of risks.
Rural areas often lack the population growth that builds demand, she said, and an area without demand is an area that will most likely lack price increases.
Instead of going where most investors are flocking, the investor studies where markets are headed in line with where they are not and where they have been in the past. She also takes into account her personal financial situation as well as her long-term investment play when selecting properties to buy.
In general, she chases high returns that will increase her serviceability. By achieving good returns, she can capitalise off her existing properties, be able to buy more assets and ultimately diversify her portfolio to improve its growth potential.
While there is no one secret to finding the right location, she recommended going for properties within 20 to 30km radius of a major CBD that displays strong population growth.
After her first purchase in Manly Vale, she bought the following assets:
While Ms Brennan is not totally against off-the-plan properties, she advised her fellow investors to do due diligence before committing to a purchase.
She said: “You want to make sure it’s a quality build, make sure it [the purchase price] is in line with the current property market. I would also be looking into the history of the developer.”
The best bet would be to invest in different types of property to increase your wealth-creation opportunities.
“If you are going to have a portfolio, you should have a mixed portfolio, but I wouldn’t have all houses. There are fewer people that can afford to buy expensive houses, so your market decreases,” according to her.
Like many investors, Ms Brennan started her investment journey using the buy-and-hold strategy, but as she moves on to growing her portfolio, she understood the need to adjust her plans accordingly.
Right now, she implements the renovate-and-flip strategy, which allows her to add value to her existing properties through renovation before eventually selling them off.
The investor started with small renovations in her properties in Manly and Manly Vale, which both had good equity.
Ms Brennan shared: “Equity minimises my risk so those two properties are what I trialed first. I’ve done the two, done them pretty well, so I'm looking to get to that next level and start doing bigger scale things.”
Aside from renovating the properties already in her portfolio, she also plans to chase real estate assets with renovation potential and implement the same renovate-and-flip strategy. She believes that un-renovated properties will give her the opportunity to achieve capital growth even in softening markets.
To make the strategy work, Ms Brennan spends time researching the area’s demographics. According to her, it’s critical that the renovated property is made to suit the needs of the population.
She explained: “For example, in Bondi near the beach, that’ll be fine for a one-bedroom. Something Upper North Shore is going to be better suited to a two-bedroom or more because the demographic is simply older.”
“When you’re renovating to move in, it’s a completely different renovation than if you’re renovating to resell or just keep it as an investment. I think that is really the mistake that people make,” the investor added.
At the end of the day, the goal is to increase the livability of the property to be able to manufacture more equity —all without overcapitalising.
“If the property’s worth $200,000 today and you can spend $20,000 on it and it becomes a $250,000-property, that’s a good reason to be renovating. That's capital growth and an increasing yield. You need to make sure that any money that you spend on an investment property actually has a tangible return in immediate cash flow increases as well as a long-term capital value," Ms Brennan highlighted.
As property prices get higher and accessing finance gets harder, property investment seems to become more out of reach, especially for the younger generation who have yet to put a foot on the property ladder.
Ms Brennan does not deny the hardships that she has to go through to build her multi-property portfolio. In fact, she hopes to serve as an inspiration to aspiring investors who have to start from the bottom.
For her, it’s all about your willingness to sacrifice and your determination and persistence to achieve your goals. You may have to temporarily postpone some of life’s pleasures and work harder to save more, but you will definitely reap rewards in the future.
Instead of blaming the generation gap that supposedly put a big dent on the property market, maintain a positive mindset and “just go for it”, the property investor said.
According to her: “I was always hungry to go out and work. I just saved everything I possibly could and then I started to invest it. When I first saw the returns that property could bring in capital growth and rental share, I knew this is what I wanted to invest in. It is something that I can touch and feel. I just kind of fell in love, I guess.”
Ms Brennan shares simple step to beginning a property investment journey:
Start by writing down your goals. From there, work backwards — determine the returns you need and the strategies you could implement to get there.
Set a realistic budget and stick to it as much as you could. Take into account all expenses that you will shoulder prior to beginning your investment journey and set up a buffer to accommodate any unexpected costs. Losing money due to overcapitalising can cause a significant delay on your wealth-creation or, worse, completely derail it.
Understand how property financing works — from mortgages to loans and interest rates — and do your best to plan an investment budget ahead of time.
Seek to understand property investment through self-education and mentorship. There will be a lot of moving parts that will influence the growth of your property and it could be overwhelming at times. Being backed by your own knowledge and the expertise of professionals will help you have an easier time navigating the landscape.
The more you know, the more confident you will be to grab the opportunities present in different markets, even if it means stepping out of your comfort zone.
The information has been sourced from Herald Sun, Rate City, Daily Mail and the Smart Property Investment website.