A property investor who had 11 properties by the age of 30, reveals his recipe for success.
Simon Loo told Smart Property Investment that fellow investors with less properties constantly want to know the “secret” to his investment success — but he says it’s actually a multi-step process, rather than one simple action.
“Eleven properties in five years sounds like quite an achievement, as though I’ve cracked onto some magical formula that has just allowed for this carefree accumulation of property,” he says.
“The truth is, there is no secret recipe for investment success. The real truth is, it’s hard work.”
Mr Loo says success in property investments takes man hours and a lot of hard work — something some investors aren’t prepared to do.
“A lot of people that I meet tell me that they want to build a huge portfolio and retire, and all these other crazy ambitions, but at the end of the day they don’t really want to put in the effort,” he says.
“There’s a lot of research and a lot of networking with agents in specific areas that you need to go through before you can comfortably buy properties, make informed decisions on properties and also locate properties that are under value or are good buys. When I was buying in Sydney that meant spending hours driving from suburb to suburb, looking at properties.
“When I turned to Brisbane, I found myself buying from a distance, and the importance of building a network of contacts up there became even more apparent. That meant meeting up with agents when I was there, getting to know them, making sure that they call you first if something does come up, or if a property that needs to sell really quickly they give you an opportunity to do that first.”
Mr Loo says the other truth to property investment is isn’t not always the glitz, glamour, success and smooth-sailing that people are hoping for.
“There are times when things don’t go your way, and it’s easy to get down and lose motivation when that happens. There were times where I had to re-motivate myself. Things happen with properties that can have an impact on your attitude, particularly when things go wrong with tenants and maintenance and things like that, and you’re just like ‘Right, I’m just not going to keep going',” explains Mr Loo.
The property investor says sometimes investing has been a costly exercise — estimating he’s replaced 20 hot water tanks in his time, and citing his miscalculation of financials around one property as examples of his misfortune.
“There was a purchase that I miscalculated in Woodridge, Logan, where the body corporate fees were eating up almost my entire yield. Little things like that stress you out, knock your confidence about, particularly when you’re new to the game, but in the long term those things are so insignificant. You need to keep perspective and stick to your goals,” he says.
“Because in the long term if a property goes up in value by $100,000 or $200,000 you’re not going to care about the $700 you shelled out for a new hot water tank or the few weeks of vacancy that happened in 2012. But when they happen, those are the things that can drag down your morale.”
Mr Loo’s next step is to move into property development to realise his dream of developing his own properties — something that is now within reach because of his dedication and subsequent success.
“That’s why you need a goal to stick to. For me, it was the dream of developing my own properties. If I’d have caved in to those feelings of giving up, I’d be nowhere near that goal. But I didn’t, and I’m now at a stage where I have enough cash to start moving into the development space. That’s not thanks to any secret formula, it's thanks to hard work and staying true to my goals.”
Simon Loo will feature as a guest on an upcoming episode of The Smart Property Investment Show. You can subscribe here, or listen to the latest episode where the team answer all your questions about our portfolio, financing a purchase, buying off-the-plan, buying the wrong property and how to find the best selling agents.