Renovating as a couple: two young investors share their story

By Tamikah Bretzke 20 July 2017 | 1 minute read

If a relationship can survive a renovation, it can survive anything – so says recently-engaged couple, Phoebe and Carl.

Millennial investors

In this episode of The Smart Property Investment Show, the young investors outline the long-term process behind renovating their first property, as well as how they found the latest design trends at just a fraction of the cost.

You’ll also hear how the millennial couple balances spending with saving in order to have their cake and eat it too, but why they’re in no rush to become big-time property millionaires.

Tune in now to hear all of this and much, much more in this episode of The Smart Property Investment Show.

Check out the end result of Phoebe and Carl's long-term property renovation here!


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Suburbs mentioned in this episode:

Castle Hill

Related articles of interest:

Housing market status for financial year 2016-17 revealed
Investors say lending restrictions are impacting on property plans
Investor housing finance on downward curve, says REIA


About the author

Full transcript

Phil: Good evening everyone. It's Phil Tarrant here, I'm the host of The Smart Property Investment Show. Thanks for joining us. Couple of people in our studio today. Couple of young people, so we're gonna have a good chat. I have Phoebe Arthur and Carl Smith here. How you doing guys?

Carl: Very well. Glad to be here.

Phoebe: Yeah. Well thank you. How are you?

Phil: So a bit of back story. I'm really good. So we've been sort of chatting with these guys for a while about getting them on the show. Their fans of it, but property investors so starting off in life as property investors and also we just learned recently engaged. So congratulations.

Carl: Yes.

Phil: Well done.

Phoebe: Thank you.

Carl: Yes February.

Phil: One of the most romantic proposals this year I think? Tell us about it? How did it all go?

Carl: Phoebe you want to?

Phoebe: You go.

Carl: So obviously one thing before, well you know girls, they kinda plan their romantic moment in their head. So the one thing she told me when it does happen is it needs to be special.

Phoebe: And I had to have my nails painted.

Carl: Yeah. So I fulfilled both of those. So basically we were in Bora Bora on holiday. On our first overseas holiday.

Phoebe: Together.

Carl: I decided to get one of the guys to, we went on a semi-submersible kinda glass bottom boat thing. One of the guys swam down as we were watching sharks and rays feed on the bottom of the ocean. One of the guys swam down with a sign saying 'Phoebe will you marry me?' For a second she thought the guy was asking her, not me.

Phoebe: Much to my surprise I couldn't even get my words out. I just put my hand out and I didn't say anything. He slid the ring on and then he said, "So is that a yes?" I was like, uh, yeah, yeah, yeah.

Phil: Did people clap and cheer? Hoot and holler?

Phoebe: There were only three people there so. It was pretty intimate.

Carl: It was a nice intimate moment.

Phil: That's cool. So he passed did he? It was an adequate proposal?

Phoebe: Oh yeah. With flying colours. He really threw me off guard because the ring wasn't in the safe. So every time I looked in the safe, cause everyone's like oh, he might propose, like it's been awhile. I kept looking in the safe and it was just our passports and the cash and everything, but no ring.

Phil: So you had a ring in the safe? But knowing that-

Phoebe: No ring. No, he didn't have the ring in the safe.

Carl: I had it in my bag the whole time.

Phoebe: Yeah.

Phil: Okay. So you were snooping around seeing if he put-

Phoebe: Not snooping. Just, you know, I obviously had to put my passport and stuff in there. So every time I looked in there I didn't see a ring so I definitely wasn't expecting it.

Phil: There you go. Well, all right. There you go. But you guys have been seeing each other for, like, ages, right? You're sort of high school sweethearts or something like that?

Carl: About nine years?

Phoebe: Yeah, correct.

Phil: So you're pretty young now right? You're in your mid 20s or so?

Carl: Yeah, 25 and -

Phoebe: 24.

Phil: Okay. So we gotta pretty good picture painted then of people who sort of been together for a long time. But, you're investing in property now right?

Carl: Yeah.

Phil: So tell us a little bit about that. So how many properties do you have now?

Carl: We have one, and we bought it in 2013?

Phoebe: Yep. Well I don't know, I was like 21 or 22.

Carl: End of 2013 I'm pretty sure, yes.

Phoebe: Yep.

Phil: So you guys, you don't live together, you're engaged but you all live together?

Carl: We basically do. I built a kind of loft-garage set up at Phoebe's parents place. So I'm there basically all the time.

Phil: Okay. So it's a cheap accommodation isn't it?

Carl: Yeah.

Phoebe: Yeah.

Phil: So what's the plan then? So you've been together for a long time and you're engaged, that's cool?

Phoebe: I guess we're obviously staying at home, ‘cause it's cheaper and we're trying to save all of our pennies. We were fortunate enough to buy in the Central Coast as Kyle said in like 2013. We picked up a pretty average sort of house for $392k.

Phil: Okay.

Phoebe: Then as Kyle's a builder, he did all the renovations, which ended up taking about, how long?

Carl: It was about two years of weekends.

Phil: To do renos?

Phoebe: Yeah.

Carl: But in between that I had glandular fever. So that kinda threw another six months onto things.

Phil: Sludged you down a bit. So did you live there?

Carl: No.

Phil: No. Okay. So whereabouts in Central Coast did you buy?

Carl: It's called Horsfield Bay.

Phil: Okay.

Carl: It's basically between Kariong and Woy Woy.

Phil: Okay.

Carl: So it's like the bay community.

Phil: Yep.

Phoebe: Yep.

Carl: So it's a waterfront property.

Phil: Okay so you bought a waterfront lot on the lake there.

Phoebe: Yes.

Carl: Yeah, on the bay.

Phoebe: On 1,300 square metres. The house was pretty dilapidated but Kyle did extensive renovations onto it. We've had it valued recently at $700k.

Phil: What'd you pay for it?

Phoebe: $392k.

Phil: So it went from $390k to $700k in-

Phoebe: Two years.

Phil: Two years or so. So what did you do with the place while you were renovating it?

Carl: So basically it was, it's basically a virgin two bedroom 80s cottage.

Phoebe: Was.

Carl: Yeah, was.

Phil: Was.

Carl: It's still a two bedroom.

Phil: Yeah.

Carl: But it's basically been refreshed throughout. Like the whole insides basically brand new. Like, just stuff like, there was all exposed beams. Which I'm sure a lot of guys are familiar with, basically you sheeted over that with ceiling. Nice shadow moulded ceilings everywhere. Down lights, insulation.

Phoebe: New bathroom.

Carl: Yeah, new bathroom.

Phoebe: New laundry.

Carl: Laundry.

Phoebe: New floors. New decks. New balustrades.

Phil: So that was over two years you renovated.

Carl: Yeah.

Phil: So you just left it there, untended to for two years while you built on it.

Carl: Yeah.

Phil: So how much did it cost you to do the renovation? In terms of hard costs? So I'm not talking about your labour cause that's free obviously. So the hard costs in terms of materials, not time. Then the holding cost to pay the mortgage for that period. What was-

Carl: So I can give you a roughie, we haven't sat down and-

Phoebe: Calculated it.

Carl: Done it to the T. But basically about $50,000 in materials.

Phil: Okay.

Carl: Which is pretty good.

Phil: So that's pretty cheap right?

Carl: Yeah.

Phil: So new bathroom, new kitchen, decks, sheet-

Carl: Yeah, well you know the bathroom you allow normally $20G for, laundry maybe $10-15 depending how big. Deck’s $20-30k.

Phil: So you say you dropped $50,000 in materials?

Carl: Yeah.

Phil: And then-

Phoebe: We also ended up out sourcing the painting.

Carl: Yeah, I did everything except the painting.

Phil: Cause you just found it hard to be bothered with doing it?

Carl: That's right, yeah.

Phil: That's a miserable job.

Carl: Yeah. That's it. Well I did one room as a template. Then I said to the painter, that's, copy it.

Phil: Copy that.

Phoebe: And I got on the jack hammer.

Carl: Did a bit of demo in the bathroom.

Phoebe: Yep. I tried to help as much as I could.

Phil: So was that every weekend pretty much? Two years you were up there?

Carl: Yeah just about.

Phil: So that's gotta suck.

Carl: It was tough. You know when you're on something like that for so long, especially by yourself most of the time.

Phoebe: I was there.

Carl: Some of the time.

Phoebe: Most of the time.

Carl: Yeah, seven till five or whatever hours I was working.

Phil: So you'd just sneak up on Friday after?

Carl: No, I'd go up on Saturday morning?

Phil: Yeah.

Carl: It's literally a 25-30 minute drive just up the freeway.

Phoebe: From Ponsfield.

Phil: And just stay there overnight and-

Carl: I didn't actually because everything, I would have liked to but just everything was just gutted and just a mess. I figured it's easier, it was nice to get away and just get back to civility for a while.

Phil: So you guys, so you had an investment property that you paid 392 for, and for two years it sat there without any income coming in from it, right?

Carl: Yeah.

Phil: From it. Did that worry you at all? Did you thing, oh we should sort of speed it up or go faster or -

Phoebe: We actually butted heads on a few things. Like I was very much of the impression like, let’s just do a quick reno and get it tenanted and make some money. But Kyle's a bit of a perfectionist, so he wanted to make it absolutely immaculate and then get it to a point that we could move in if we ever chose to down the track. So yeah, then you know I eventually compromised and obviously it's paid off.

Phil: I think the problem is with tradesmen or craftsman, you know, to do a job, you want to do it properly right?

Carl: Yeah.

Phil: Take a lot of pride in it. Which I get.

Carl: That's right.

Phil: It's cool, but the things it how do you weigh out those two sides. Of that argument, and they both have merit right?

Phoebe: I think like at the end of the day we've seen, obviously, how taxing that was and we've both agreed that next time we go to do that again, we wouldn't put as much into the renovation. It'd be more of like a quick tidy up with just a lick of paint and maybe some new floors or something. But I think we both now agree that obviously we wouldn't do that in every single property cause it wouldn't be worth it.

Carl: Yeah. If I can touch on that. Sorry.

Phoebe: Yeah.

Carl: So basically, yeah, like Phoebe said. It started off we bought it basically purely as investment to start with.

Phil: Mm-hmm.

Carl: As we started working there and visiting more we really grew to love it. Which is probably the golden rule not to do. But I kinda said to Pheebs I'm like, I really like this place I could actually live here.

Instead of doing a quick reno where things still aren't gonna be done and having to most definitely come back throughout the tenancy stage and fix things up. Why don't we just do this properly, we both get more value from the property, which gives us more equity. Also the fact that at any time we could move into it and be happy to live in it. Also it's more appeal to tenants.

Phil: So did you get any advice on that? It's a good point you make. So you spent 392 plus all your other costs. Then you dropped 50 on it in terms of a reno. Plus the holding cost from mortgage on, that's $400-odd grand. That's a fair bit of money that to hold onto that property. Did you go to a real estate agent and say, "Hey if I just put a lick of paint on this what could I get for rent, versus, or the evaluation, versus we spend time and effort and attention on it?" Did you do that? Did you go through that process?

Carl: When we bought the place we obviously asked what that current, cause it was being rented when we bought it. So we asked to see what they were getting. Do you remember what it was?

Phoebe: It was fetching about $320.

Phil: Okay.

Phoebe: Yeah.

Phil: At the point on when you purchased it?

Phoebe: Correct.

Phil: Yeah. And now what have you got it rented at?

Carl: $450 a week.

Phil: Okay. So you raised it up by about $130k, which ain't too bad.

Carl: Yeah. So they even said that between $450 to $500. I said you know what I'm happy with $450 because it's more appetising I guess.

Phoebe: We could easily cover the repayments on that. We've got an awesome tenants.

Phil: So do you manage it yourself? Do you get a -

Carl: Well the real estate does.

Phil: Real estate guys do it. So if you guys had to pay rent where you live, I don't know if you pay, you probably pay-

Carl: No.

Phil: No you don't pay any rent?

Carl: No.

Phoebe: Nothing. We're very lucky.

Phil: If you had to pay, and I kinda like having this conversation because on Smart Property Investment on The Smart Property Investment show we often talk about the challenges millennials have and you guys are millennials right?

Phoebe: Yeah.

Carl: Yeah.

Phil: I'm a Gen X you guys are Gen Y. The challenges of how the dream of home ownerships impossible. No one’s ever gonna be able to own a property and it's all gone right? But you guys are obviously bucking that trend saying that it is possible to do this stuff.

Carl: It's very tough, yes.

Phil: You go on holidays to-

Phoebe: Bora Bora.

Phil: Bora Bora and you're buying property so you got a bit of cake in it as well, right?

Phoebe: Yeah well-

Phil: But you're making some sacrifices?

Phoebe: Correct, yeah. Like we're still living at home. We don't go out every weekend like we're not spending copious amounts of money on alcohol and those sorts of things. But we still have a really good time and I think after eight years we're still very much so in love. On the weekend Kyle just took me out for a picnic, which is what $20 but still such a romantic and beautiful thing to do on a weekend.

Carl: It doesn't happen all the time though.

Phoebe: Yeah, but to be able to.

Phil: Could be a lot a blokes going, oh god.

Phoebe: To be able to enjoy Sydney for what it is on a weekend for $20 like that's a lot better than spending $200 on a night out in my opinion.

Phil: Yeah.

Phoebe: So, I think it's just being careful and frugal.

Phil: So how focused are you guys on sort of budget? Who sort of controls the budget out of you guys?

Carl: Both really.

Phil: So it's like an organic thing. It's not like you've got $20 to spend and that's it. Or is it like, so is there a conscious decision for you guys not to spend too much money so you can save money? Is that the head space you're in?

Carl: Yeah. I don't like to spend money unless I've got it.

Phoebe: Yep. So like-

Carl: Which is kind of-

Phoebe: We're pretty against credit cards and stuff. But we obviously both have our own weaknesses. Like Carl has three cars. I've got-

Phil: You need three cars come on.

Phoebe: Yeah. Okay. I've got a bit of a shopping addiction. So, I mean like manage I guess our own funds but we save together.

Phil: That's good. So you've got one investment property obviously, you want to go again?

Carl: Yeah definitely.

Phoebe: Yeah.

Phil: So have you got a war chest ready to roll in terms of cash so you can buy? Or are you gonna draw down on somebody and say can we do that created?

Carl: I think we're kinda mostly looking equity.

Phil: Okay.

Carl: Well we can get a fair bit of cash behind us. Like we'd like to go ideally next year sometime. So we've got a good six months or so to get a bit of cash on top of what we've already got.

Phoebe: We started looking again like on just just to get a feel for the market. I think we're both just sort of like, and there's a lot of talk at the moment in the media that there might be a bit of a drop. So we're just trying to wait and see if that's true or not. Also, just see what happens with interest rates. Cause we don't want to bite off more than we can chew either.

Phil: Has anyone given you any advice on your borrowing capacity? Like do you know how much you can borrow, comfortably borrow?

Carl: No we haven't-

Phoebe: Seen our bank manager in a while.

Carl: Yeah we haven't seen our banker for a year or so to ask that question. But-

Phoebe: When we open up NetBank you can see that we've got quite a bit in equity.

Phil: It'll actually tell you what sort of equity?

Phoebe: Yeah. In the com bank app.

Carl: If you add your stuff into your portfolio. In the Commwealth app it kind of gives you a net worth.

Phil: And it tells you this is what we reckon what your evaluation is, here's your debt on it, here's your net worth.

Carl: Yeah.

Phil: Yeah. That's pretty cool.

Carl: So it gives you a rough idea, but.

Phil: Yeah.

Carl: Yeah. No we don't have a definite borrowing capacity but.

Phil: So you both employed sort of. You're at Uni aren't you? Well you've got a bit of a mixed.

Phoebe: I am. Well I'm doing part-time Uni but I'm studying, I mean I'm working full-time. So I do like a 7.6 hour day but I'm fortunate to do it over a broken shift.

Phil: Okay.

Phoebe: Which means I have the middle of the day to go to my lecture or my tutorial. Then come back to finish off my day. So yeah I'm very lucky in that respect. Like it's a very flexibly job around Uni.

Phil: So you guys are pretty balance, right, you've thought about this.

Phoebe: Yeah.

Carl: Yeah. It's not much planning, it just kinda fell-

Phil: So it sort of happened.

Carl: Yeah.

Phil: What sort of hours do you do? You do like full-time-

Carl: Well I work seven till three basically Monday to Friday for my boss who I did my apprenticeship with. So I'm still with him.

Phil: Are you a residential builder?

Carl: Yeah.

Phil: Okay.

Carl: Yeah we do a lot of main, major renos and stuff like that.

Phil: So you're learning all the skills at work to apply it in your own thing.

Carl: Yeah.

Phil: Yeah.

Carl: So and yeah on weekends I normally do my own jobs. So yeah it's busy, like I'm putting in the long hours and hard yards now. Just like with the two years on the property. But I think it's worth it in the long run. So that's my justification.

Phil: Yeah. What sort of property do you think you'll buy next? Have you got any ideas on sort of the strategies you're gonna be, a unit house, something to renovate, something not?

Carl: I think house.

Phoebe: Yeah.

Carl: While we were thinking unit.

Phoebe: Yeah.

Carl: But there's too many associated fees.

Phoebe: Like strata fees.

Carl: I can do more with a house in my opinion.

Phil: So what you're saying then is that because you've got an ability to manufacture equity by renovating that's the sort of properties you're gonna find attractive. Because get bigger bang for your buck. It's just whether or not you want to spend your weekends sort of on the tools doing it.

Carl: Well that's it.

Phil: When you do it all day every day sort of.

Carl: Yeah. I suppose now that we've got the equity. Depending on how much we can actually borrow, we might have a bit more free play to kind of sub-contract out a bit more, which would be nice. So obviously with the first house we didn't have the money to, we had next to nothing. We were scrapping the barrel to finish that job so.

Phil: So would you guys say, are you happy with the outcome of this first investment property.

Carl: Oh yeah, hundred per cent.

Phil: Like do you reckon you've done it well?

Phoebe: Yeah.

Carl: Yeah definitely.

Phoebe: Like obviously it took longer than we expected. But the overall like, benefits definitely outweigh the costs.

Carl: Yeah. When you, cause Phoebe'd come up most weekends and, you know, you've probably seen yourself in renovations, you might have guys there for weeks on end, and you come in looks like nothings been done. Then all of a sudden, you know, something’s -

Phil: Something happens.

Carl: Yeah. So it was a lot like that. Phoebe was like oh, when are you done this weekend. Then all of a sudden the whole decks done and nice glass balustrades up.

Phoebe: But yeah, if your relationship can survive a renovation then I think it can survive anything.

Phil: So you stress tested getting ready for marriage.

Phoebe: Yeah. Hundred per cent.

Carl: Pulled out all the big guns.

Phil: Has anything kicked off between you guys? Like have you ever sort of fundamentally disagreed on something and gone-

Phoebe: Oh my god, hundred per cent. I always joke and say we should enter The Block, because I think it would be so entertaining. Like, just like little things that we disagreed on. Like, it was just silly.

Carl: Yeah, even with the house up the Coast. Like, Phoebe originally didn't want to fully reno the bathroom. Then we ended up doing it, cause it was just trashed.

Phoebe: Yeah and then like-

Carl: We couldn't make it look good. To match the rest of the house.

Phoebe: The first thing I said was like, can I have a shower in the shower? Cause it was this beautiful rain, what's it called, like a rainfall?

Carl: Yeah, rain water.

Phoebe: Yeah. Shower head and it was just the most beautiful bathroom.

Phil: So you reckon you've over capitalised the property though? Like you've obviously gone about it, you're a tradesman. And that's cool, I find that commendable. But is also sometimes you go too much. So do you think you could have got this same result with less time, cost and effort in terms of evaluation of $700k? Like have you sort of tried to work that out?

Carl: I've thought about it yes. I don't, at that day and time, on that property, probably not. The property prices are starting to really peak up on that street though. Over the last, well since we've even tenanted it end of last year.

Phoebe: To be fair as well, with like the rainfall shower, like it was a $50 head from Bunnings. Like it looks beautiful, but it's not like top of the line sort of materials. Like we very much so got cheap materials. Like the toilet was like one of those modern looking toilets but it was like $120 from Bunnings. So it's just, I guess, finding the latest trend but at a fraction of the cost.

Phil: Yeah.

Phoebe: Yeah.

Phil: ‘Cause you can get the same look from, I always say, you can get the same look as like, that things $1,000 and that things $100.

Phoebe: Yeah.

Phil: Unless you know about that, you know, you don't know.

Carl: And often the quality these days, I see it all the time, like for instance the kitchens and stuff you can buy from Bunnings, the Kaboodle stuff. Like it's, I would do my kitchen out of that. Because it looks good, and as far as I've seen it's pretty durable.

Phoebe: Yeah and like even like our bench-

Carl: I'm not being paid to say that though.

Phoebe: Our bench shot for the laundry was like a recycled piece of tile. So yeah, it was-

Phil: So you've been pretty smart about it. So you said it was like a water front property right? On the, is it the Lake that goes out at the entrance, is that the Lake you're on?

Carl: So what we back onto is called Korea Bay.

Phil: Okay.

Phoebe: It's like next to Fagon's Bay.

Carl: Next to Fagon's Bay, Woy Woy Bay. There's a group of Bays along that-

Phil: Along there, yeah.

Phoebe: So it's like as you first turn of the M1, there's an exit for Kariong and Gosford. Then if you come down that, it's actually quite a beautiful road. It's like a windy road and there's a National Park, Bouddi National Park.

Phil: Okay. I like one lake up to high I'm thinking.

Phoebe: We're a little bit further in. So it's really close to Sydney and I think the train takes about 50 minutes, like, from Woy Woy station to the Sea Bay Day so we were like, we looked at that as well. The train stations like a five minute drive, and then there's a bus stop out the front. There's shops nearby, like the schools nearby. I think we looked at all those things as well.

Phil: So it is waterfront. Is the water usable? It's just like a, like is it weedy and stuff?

Carl: Not particularly at the moment.

Phil: It can be up there.

Carl: Yeah, like if we were living there I would dedicate some serious time to making it usable.

Phoebe: But like the neighbours have boats and stuff. We obviously don't have a boat.

Carl: They've got like walkways down there and, yeah. It's a bit of work.

Phil: It's a good feature to have though.

Carl: Yeah.

Phoebe: It's beautiful. You can also see the ocean. Like you've got ocean glimpses from the deck as well. So it's a pretty picturesque sort of location.

Phil: Yeah, sounds like a good house.

Carl: I'd, both of us had never heard of it before.

Phoebe: Yeah.

Carl: Before Phoebe found it on Real Estate.

Phoebe: I think that was part of the appeal as well. Like cause it's not heard of.

Phil: So you want to buy again, and that's cool. So the overall goal is what? You want to buy, have you got like a strategy?

Carl: If we could buy, like obviously-

Phoebe: We spoke about interstate.

Carl: Yeah. I don't think we can use my-

Phoebe: Skills.

Carl: Skills there. Which I think kinda differentiates us from your average buyer.

Phil: Yeah.

Phoebe: But then like, I'm of the opinion that because we will have more equity and more money to play with then we should just sub-contract it out and then, getting a flight to Melbourne or Queensland's like what, $50? Like, it's doable.

Carl: Maybe not for the second place, but.

Phoebe:  Yeah. So I, yeah.

Phil: So is the goal to build like some massive portfolio? Is that what you want to do?

Carl: Not, like we're not greedy people. We don't want to just buy up everything we can. We can't anyway, but-

Phoebe: We have a friend that has got quite a few properties in Logan.

Phil: Okay.

Phoebe: And they've all been flooded with the recent floods up there. So I think like, it's all well and good to buy lots of properties. But if you can't sustain the repayments, like if interest rates rise, like dramatically, I think that would put you in a pretty sticky situation. So I think like we just want to buy like a few and make sure we're not biting off more than we can chew. And something that will quick sell.

Phil: If you need to.

Carl: Something that is, I think something that's in a half decent state to basically, maybe even just a lick of paint.

Phoebe: Yeah.

Carl: And some new lights or something, then get tenants straight in. We found a couple in, like, North Gosford and that kind of area. Six months or so ago, obviously we weren't ready then, but keeping an eye on the market. There's stuff out there.

Phoebe: Our little trick was to like, see where we live, and then do a bit of a radius around where we live. Then see how long it would take to commute to that place every weekend. Cause we're located like north of Sydney.

Phil: So you're Hornsby, right near the freeway.

Phoebe: Yeah. So Central Coast is a lot quicker to get to than say the Western Suburbs for us. We're more looking like, towards the Coast for that reason. Just like as a radius around where you live. But, I mean that's not the same for everyone. Like Carl’s like a builder so.

Phil: Probably travels all the time. So you guys are only like, 25 years old, right? You've got 40 plus years of work ahead of you.

Carl: I hope. Can you sign off on that?

Phil: It's probably gonna be longer by the time you get older. I'm not that much older than you, but I'm a fair bit more older than you guys. But, so you've got a head start in terms of time in building a portfolio.

Carl: Yeah.

Phil: You've got a head start in terms of a skill set where you can manufacture equity. At least understand the building process so if you don't want to do the work some guy is gonna come in but he's not gonna rip you off.

Carl: Yeah, I can still project manage or whatever.

Phil: You can project, so you got a lot of advantages. You're both employed, you're at University. You got a career sort of going. So do you want to get wealthy or rich off property investment? Or is it just gonna be a nice thing that you, you obviously enjoy doing it. But, you know, do you want to sort of be retired at 40? Or what's the game plan.

Carl: It would be nice.

Phoebe: It would be nice to have passive income coming in from more than a few rental properties. I think that would be the ideal goal.

Carl: Just being comfortable. That's all-

Phoebe: But we don't want to be like multimillionaires or anything.

Phil: You're comfort level changes quite a lot between like 24 and 40.

Carl: Yeah, that's it.

Phil: Like the more money you need, it just changes you-

Carl: The markets riding.

Phil: But, you know, if you're building a property portfolio, it's gonna give you a choice to actually dictate your level of comfortable, right?

Carl: Yeah. Like, I have to work. I get bored just doing nothing. So no matter whether I've got $10 million dollars, or $10,000 I'm still gonna be working.

Phil: Yeah.

Phoebe: But, Carl also spoke about eventually getting to the point where he could just renovate houses and then sell them for a profit as a career.

Carl: Yeah, that would be amazing.

Phoebe: Instead of working for someone else, or even for himself in like a building capacity. Like doing a renovation, hopefully a quick one.

Carl: A spec-y is what they're called.

Phoebe: Yeah, and then selling it for a profit, and then moving on and then living off that. That's like the end goal.

Phil: I know a lot of guys like, some of the wealthiest people I know are builders, right. They start doing what you are, they get a good trade and-

Carl: Honestly that's it.

Phil: Become property developers. You never know what might happen in the future.

Carl: Well that's it, that's one of my biggest out looks on life. You just never know what's around the corner.

Phil: Yeah.

Carl: So, I'm a strong believer in that. You just play your cards right, and you just hopefully get opportunities in life.

Phil: You know, guys in your age year, you're getting engaged, gonna get married, and all that sort of stuff. You haven't got any of these sort of inherent ideas or pressures to say I know we need to get a principle place of residence. We need a home.

Carl: Well that's it, yeah.

Phil: We need to have a home, we need to pay it off. The greatest grand dream. Before you start investing in properties.

Carl: That would be nice.

Phil: Yeah. But how does that work? Do you want a house, do you want a home? Like-

Carl: Definitely, yeah.

Phil: You do?

Carl: That's the, in my mind, I don't know about you Phoebe, I think we're pretty much the same. But, I honestly, it'd be good to have a home to be our principle residence before we get married. But, because, basically all my works in Sydney, and I've got a lot of it. Like with my boss both from my clients as well. If I had work up near our place up the Central Coast I'd be up there living there. Because we both love that place. But, it's just, it's all down to work.

So it's whether I take the risk and put myself out, out there and not get any income for a while. Or I'm honestly, normally I've got most things planned out. Like Phoebe, but that's the one thing that's kinda playing in the back of my mind.

Phil: You just don't know. But sometimes you just gotta take a deep breath and go.

Phoebe: But also we've got is so good at the moment. Like, we've got a great relationship with both of our parents. Both sets of parents, and we're not paying board, we're not paying rent, we're not paying anything. We have separate, like, self-contained.

Phil: Do you get food and stuff? Like do they feed you?

Phoebe: Yeah, and like, still does my laundry. Thanks mum. But like, you know, I think we're in a really lucky situation to be able to do that. We have no pressure from either set of parents saying you need to move out. You need to move out. Like our parents are very much saying save as much money as you can. Buy as many properties as you can and then move out. Like, I don't think we have that pressure, so we're fortunate.

Phil: So you think you'll eventually have to make the plunge of sort of going, okay well I'm gonna stop buying investment properties and get a house, which is a home? Or, you've got the option where you can actually turn one of your investment properties into your home if you chose to do that?

Carl: I think ideally if we could find a place in Sydney somewhere that's kinda central to most of my work, you know, we could obviously buy that and just have that, even tenant it out just to have it.

Phoebe: But we're in no rush.

Carl: Yeah.

Phil: Yeah. So who would you say is the biggest influencer on the way you're going about approaching building wealth through property? Do you have a really good accountant?

Phoebe: My dad.

Phil: Your dad is it?

Phoebe: Yeah.

Phil: So he's an advocate, he sort of flies the flag saying go and do it?

Phoebe: Yeah, dad's bought and sold properties all his life. Like, I was fortunate enough to be raised by one of the smartest men I know. He's an accountant by trade, funnily enough. And he is just very like, switched on. Like, I was lucky enough to live in Melbourne for a bit, Queensland for a bit, like Sydney for most of my life. But, and even Canberra. Yeah, I think for me, I've just grown up with seeing what you can do with a property and transforming homes. Dad's not a tradesman by any stretch of the imagination. Like he couldn't nail a nail in the bloody wall. But he has transformed a lot of properties and sold them. Yeah, I think you get a lot of your advice from dad as well?

Carl: Yeah.

Phoebe: Yeah.

Phil: Yeah. It's good to have people who can help shape the way you go about doing stuff. You know, you're fortunate you've got someone who is your dad, you know. I pay people, to sort of say hey, what do I do? You know. I'm happy to pay for that advice. Because it's good advice, right? But, I also get to chat with people like you every day where, you know, I go oh, that’s a good idea.

Phoebe: I think everyone's got their own take on it too. Like no two people have the same vision.

Carl: Yeah well there's no, nothings set in stone really is there?

Phil: No. There's not.

Carl: There's the, obviously I guess the loosely written rules that everyone tends to follow-

Phil: But there pretty basic stuff, right. Don't bite off more than you can chew. Always have a buffer. Understand the absolute worst that can happen and have all the ways you can mitigate it. But you know, plan for the worst, hope for the best.

Phoebe: Exactly.

Phil: I love people that don't do that. They just jump in, a blind-

Carl: That's very risky.

Phil: They're the guys who find themselves in trouble. But the stuff you're doing, like, you know, you bought a place for under $400 grand, and it's worth $700 grand now. You know, if things fall off the ranks, it's not a bad result to be fair. You're not sort of eating, two minute noodles and baked beans every night.

Phoebe: No.

Phil: You know, you're going to Bora Bora for a bit.

Phoebe: Yeah, exactly. Yeah, we had two weeks in Bora Bora too. It wasn't like three days. Like, but we save hard and we work really hard.

Carl: It was our first proper holiday.

Phil:  Yeah.

Phoebe: We've had together, yeah.

Phil: Well you gotta know what you want, it's all about priorities. But, well what do your mates reckon? Do they sort of, is anyone else sort of emulating you? Or are they going, oh it's too hard?

Carl: One of my good mates, Andrew, he's a bit older than me.

Phoebe: How old is Andrew?

Carl: He's 39. So he basically bought a place in Castle Hill about 10 years ago. And he's recently sold that for a decent profit.

Phil: Yeah.

Carl: He lives at Kenhurst. So, he's all for it. He's a big believer in basically what we do.

Phoebe: People sort of like, our age, though that we're friends with, yeah no not really.

Phil: Do they think it's easy, or do they just can't get beyond just sort of starting?

Carl: A lot of people are spooked. Even I'm spooked about Sydney. We've got a place up the Central Coast, but-

Phil: You know they've been saying for the last few years, three years now, there's a big property bubbles gonna burst. You know, if you go looking for negative news you can find it in a heartbeat.

Carl: Yeah.

Phil: You just gotta try and work out whether or not there's any-

Phoebe: Do you think that house prices will continue to rise though?

Phil: Over time, absolutely.

Phoebe: Yeah.

Phil: It's what property does.

Phoebe: But do you think in like a short term?

Phil: That's why I invested in it. Are you talking about the Sydney market?

Phoebe: Yeah.

Phil: I think the Sydney market is slowing and will continue to slow.

Phoebe: Yeah.

Phil: But you're talking about slowing and growth, rather than completely going backwards, you know.

Phoebe: Yeah.

Phil: Is Sydney property prices gonna drop by 20-30 per cent, no it's not. Like, there's so many inherent fundamental factors, which are gonna put positive pressure on Sydney prices moving forward into the future.

Phoebe: Yeah.

Phil: You know, look at the size. A beautiful place to leave, everyone's the same, migrations high. You've got a stronger aggressive economy. We've got a government whose focused on growth and creating job growth. This whole idea that properties gonna half in value because it's, from a global perspective, is overpriced. I just don't buy into it.

Phoebe: Yeah, okay.

Phil: Maybe famous last words. But, they've been saying it for years, and years, and years. All property markets move in cycles. It's up, it's down, it's left, it's right. That's what property does.

Phoebe: Correct.

Phil: The idea is about timing. The right time to get into a market, and how long you want to stay in that market before you choose to exit that market.

Phoebe:  Yeah.

Phil: You guys are starting pretty young, right. If you can buy and hold for your whole life you guys'll be pretty well set up moving forward.

Phoebe: I think that's the plan. Like we don't want to sell.

Carl: Well yeah, talking about that, like we definitely discussed flipping the place that we bought to make a quick profit.

Phoebe: It was tempting.

Phil: But what are you gonna do with the money, right? You've gotta replace that asset.

Phoebe: Then, I mean, at the end of the day we still have equity.

Phil: Yeah, you can use equity. Probably one of the biggest sort of, you know, enlightening moments for people that invest in property, is when they sit there realise wait a second I've got all this growth, I can actually use that to keep going.

Carl: That's it.

Phoebe: Yeah.

Phil: That's like a big moment for a lot of people. They don't really understand it, and they get it and they go for it. But, you know, yeah just keep doing what you're doing. One of the biggest problems I think you're gonna have is that one of your strongest points could potentially become one of your weakest points. Your strongest point being, yes I can do all that work myself, and therefore that's gonna limit the type of properties I'm gonna look at. I just only want to travel for 30 minutes on a Saturday morning to get to a job site for me to do the work myself.

You should keep that in the back of your mind. Because you don't want that to dictate where you invest in property. Because, you know, we're talking about the Sydney market right now. Is this the best time to get in the Sydney market? Probably not.

Phoebe: Probably not.

Carl: No. Definitely not.

Phil: It would be depending on your circumstances, but is there better markets right now with the money that you have that's gonna give you a better return on investment in terms of growth and yield. Probably is.

Carl: Well I'm not just set by that. I'm open to travelling, I mean if I have to take a week of work for, one week per month or something, and go out there. Not do such a major reno, but you know, whether I have to stay there for a week, or go there every day, or you just gotta adapt to make it work.

Phoebe: But I think the point that Phil's trying to make, correct me if I'm wrong, is you could probably sub-contract some of that stuff.

Carl: Oh yeah, definitely.

Phoebe: Yeah.

Carl: If we can afford it, yeah. I would love to do that.

Phoebe: Yeah.

Carl: Because it's the smarter way to do it.

Phil: It's easy. I've done renovations in Queensland. On houses I've never ever seen. You know, and a lot of people say, well you should really see the house. But, you know, use a buyer’s agent, and videos the home and shows it all to me and stuff. So I am still involved and connected, but you know. I like doing stuff to sort of, not renovating, to get a lot of personal satisfaction out of it. I like the outcome, yeah that's pretty good, I did that. Which I don't get to do with my day job, all I do with my day job is talk.

Carl: Yeah.

Phil: And go out for lunches and stuff. It sounds hard, but. Then I get a lot of satisfaction out of doing stuff.

Phoebe: Do you have any positions going?

Phil: But, you know, like sometimes you're better off just detaching yourself and just paying to get a job done.

Carl: Yeah.

Phil: Anyway, you'll sort it out you know, so.

Carl: I think the main thing with our first place is because we both kinda said that we would like to live there. So that's what kinda changed-

Phil: It sort of dictated that. That's okay, that's cool.

Carl: Now that we've got that, we can-

Phoebe: We won't do that again. I don't think we'd make the same mistake again. To invest two years of time into-

Carl: No definitely not. That's why I did it. Purely for that reason.

Phil: But you've learned from it right?

Carl: Yeah.

Phoebe: Correct.

Phil: It's opened your mind and given you a different paradigm to base your next step from.

Carl: Exactly.

Phoebe: And as hard as it was, like we are still standing here today, going to Bora Bora, so we didn't lose too much money. From an-

Phil: So hang in there.

Carl: It was a small mortgage, it was manageable.

Phil: Yeah.

Carl: Without having the income from the house, so.

Phil: So how you gonna go now? And we'll finish up on this. But we've got the big challenge now of working out how much you're gonna spend on your wedding versus, I imagine we could probably buy a property for that. You know.

Carl: No, we've discussed that.

Phoebe: We've spoken about that.

Carl: Definitely.

Phoebe: But, I think, like once again, I know it sounds bad. But our parents have been very supportive of also us getting engaged. They've both said they'd like to contribute some money towards our wedding. Which is fantastic because that means we can then save on investing a property, rather than putting all this money towards a wedding cause-

Carl: We've both agreed that we don't need some extravagant-

Phoebe: Yeah.

Carl: Hugely expensive wedding. Like, it's just a day.

Phoebe: Yeah. I've said a few times now, like let’s just elope. Cause they just seem like a bit of a waste of money.

Phil: Weddings aren't a waste of money. Weddings are good fun. Best of my life, I had a really good time at my wedding. Actually, we had a weekend wedding anyhow. Went away, I won't bore you with the details.

Phoebe: Oh wow, where?

Phil: It was pretty cool. But, you know, there's this whole big thing about how parents can help their kids into the property market, right. A lot of the times, they're very financially related saying, oh, become a guarantor for them so they've got the borrowing capacity and stuff. But, one of the really good ways that parents can help their kids in houses is doing what? What you're parents are doing, just giving you somewhere to live, right?

Phoebe: Correct.

Phil: That's a big leg up in life, not having to dole out rent.

Phoebe: No.

Phil: It's a compromise, and you gotta hang out with your parents and all this sort of stuff. But, you know, get your washing done, and-

Phoebe: I know it's awesome. Like, realistically if you've got a good relationship with your parents, its-

Phil: It's a really good way for parents to help out.

Phoebe: Yeah. And we never wanted our parents to go into, we just wanted to do it on our own, and stand on our own two feet. So, we didn't want to be, you know, owing money to them or owing anything to them.

Phil: Whatever works, but it's a shout out to all the parents of Australia who throw their kids out -

Carl: Toughest time in their lives.

Phil: Stop complaining about kids living at home. Anyway, we're gonna have to finish up guys. Phoebe and Carl.

Phoebe: Thank you.

Phil: All the best.

Phoebe: Great. Thanks.

Phil: Let's keep engaged, let us know how you're getting on.

Carl: Definitely.

Phil: We'll profile the next thing and yeah, good luck with sort of, the wedding and all that happens after that.

Carl: Yeah.

Phoebe: Yeah.

Phil: That's cool. That's good. Thanks for coming in.

Phoebe: Thank you.

Carl: Thank you for having us.

Phil: Remember to check out We've got everything there around property investment. There's heaps of stories like Phoebe and Carl as well, so go and check them out. Remember to follow us on all the social media, Facebook, Twitter, LinkedIn. Follow me if you like @PhillipTarrant.

Any questions for us, or Phoebe and Carl they'll be happy to answer I imagine, yeah?

Phoebe: Yeah, go for it.

Carl: Hundred per cent.

Phil: Email the team [email protected] and also a favour, please, please keep those reviews coming on iTunes. Just give it a nice five start if you like what we chat about. Some comments if you like. I'd really appreciate it. So, we'll be back again next week, until then. See you later. Bye bye.

Disclaimer: 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 appear on this podcast may have a commercial relationship with the companies mentioned.


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