Taking control: Q&A with Helen Collier-Kogtevs

Helen Collier-Kogtevs

Taking control: Q&A with Helen Collier-Kogtevs

By Reporter | 07 September 2015

Q. When and why did you decide to take care of your own financial future?

My husband (her then-fiancé) and I had an epiphany one day whilst camping in Barmah Forest. We were having one of those discussions about life's bigger questions, such as when we would get married, where we would live and what we would do with our superannuation funds. One strategy that emerged that day was adding our superannuation funds together for a compound interest figure of about eight per cent.

Even though this figure was ambitious, it meant that we would still have to retire on a shared budget of only about $28,000 per year. That was the moment we realised we had to find other ways to financially support ourselves. We considered getting involved with share trading or setting up a business, but discounted these approaches because we had good corporate jobs. Property investment was appealing because it allowed both of us to continue working full-time.

Q. What was your first investment property purchase?

Our first investment property was a three-bedroom townhouse. Moving in to this property was perhaps the biggest mistake we never made.

Prior to this purchase, we had been living in a small bungalow that dated back to 1925. With an open-plan kitchen, a spa bath and great views of the city, the investment property had the space that we so desperately wanted and more. I spent thousands on curtains for the living room, bathroom fittings and kitchen appliances, and almost convinced my husband to move in.

Cash-flow positive properties aren't only found in mining towns 

Looking back, I realise that I made the mistake of getting emotionally attached to the property without fully considering how it would factor in to my wider portfolio ambitions. However, my husband reviewed the numbers and discovered that moving in to the property would massively limit our borrowing power for future investments. It was a hard decision, but we opted to stay in the bungalow until our financial situation improved.

Q. What are the biggest property investment myths that investors should ignore?

There is a prevailing belief within the Australian property market that cash flow-positive properties only exist in mining towns. I find that a lot of investors give up trying to find these properties elsewhere, simply because their searches on property websites yield no results.

The truth is that such properties can be found throughout the country – investors just need to be a little bit smarter and a little more creative.

One way to achieve positive cash flow is to renovate a run-down property in a sought-after area. This may only require minor changes like a new painting scheme, updated carpets and a rental increase. Investors with some spare capital could build a separate unit on the property and rent it out to another tenant.

When it comes to purchasing the property, remember that you can create cash flow through a negotiated discount. Most sellers are flexible on the price of a property, even if they won’t readily admit it.

I also see a lot of properties where the yields are low because the landlords are not renting their properties effectively. Always consider how other properties in the area are performing and make sure that your investment is bringing you the best possible rental return.

Q. What questions should investors ask when consulting a property expert?

It is important for investors to make sure that their expert owns more than one property. An individual with a large portfolio is more likely to understand how best to release your equity and maximise your portfolio.

I like any property expert I deal with – be they a broker or an accountant – to be involved with property themselves. For example, an accountant who invests in real estate will make sure that their clients get a credible depreciation schedule from a quantity surveyor. An accountant who doesn’t invest in property might simply depreciate the building and not the chattels, short-changing the investor.

Most sellers are flexible on the price of a property, even if they won’t readily admit it

It is also important to make sure that the expert specialises in your chosen area of investment. For instance, an individual who deals exclusively with off-the-plan properties is unlikely to be the best option for pursuing a property renovation strategy.

Real estate investment is usually the biggest financial commitment of our lives – therefore, we should ask the kind of questions that allow us to get a complete image of the property expert. Good questions include, what is their success rate? How many investors do they deal with? How many properties do they own?

After meeting with the expert, carry out your own background checks and make sure that the numbers the expert is forecasting are tangible.

Taking control: Q&A with Helen Collier-Kogtevs
Helen Collier-Kogtevs
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