Daniel Walsh, who started learning about investment at 16 and bought his first property at 20, shares his story with Smart Property Investment to prove that no one is too young to secure financial freedom.
His secret? The right mindset, a good long term plan and some professional advice.
What do you say to all those naysayers out there that reckon it’s impossible to enter the Sydney property market as a young person?
Well, it’s definitely not as hard as everyone makes it out. I think, if you just start looking at other states, start looking outside your backyard. Too many people live in Sydney and they only look at Sydney. For me, after my second house in Sydney, I had to start looking at other states – Queensland, South Australia, Victoria – just because I couldn’t afford to buy that half a million dollar house anymore. So, I started looking for houses that had cash flow, that had the upside potential for growth, infrastructure coming to the area. Those were the houses that I wanted to invest in, something that didn’t cost me $100 a week to hold, which Sydney does now. I think it’s not as hard as everyone makes out. I think if you just have a correct plan and you execute that plan, which is what I’ve done well in the last six years, that definitely sets you aside from just saying, “I can’t do this.”
You talk about this plan that you have – is it a genuine plan? Can you tell me a little bit about that goal setting?
Everyday I do plan. Six years ago, I planned for today. So, I have pretty much planned my property portfolio out and every asset that I put into that portfolio. I make sure it complements the other houses that I have. So, I may buy a house today that has extremely good cash flow, say 7, 8 per cent yields, which is complementing something that has negative cash flow. Overall, my total portfolio is going to be sort of neutral. I want to be in that neutral cash flow, with a buffer set aside, so that if anything goes wrong, I pretty much have all my bases covered. But, yes, I pretty much have planned out 10 years of what I wanted to do and I’m pretty close to achieving it. My goal is 10 properties and I want to hit $5 million in property portfolio. So, I’ve got about another two years to do that.
Are your workmates aware about this wealth-building strategy? What do they think of it?
Yes. Most of them, because I talk to them a lot about it. I’m always talking about property, wherever I go. So most of them, they do know about my property investing journey. Some of them have even got onboard on one or two of the same. I try, I guess, to change a lot of their mindsets from the way their mum and dad get them to think.
Their mum and dad will say, buy the house in Sydney, pay $600,000, $700,000 dollars for it. They’re in half a million dollars’ worth of debt and then they have to pay it off over the next 30 years. Whereas I say, “Why don’t you go rent that property and why don’t you go buy three or four others that cost you nothing and then, after five or 10 years, you can build that? You might have 10 properties in 10 years and you’ll be able to sell down half that portfolio and then go buy that endgame house that you have.”
Do they get it? Or do they go, “Mate, you’re an idiot. What you’re talking about is bullshit. It doesn’t work that way. It’s all scam.” What’s the negativity around that?
Some do get it. Others take a little longer to get it and then there [are] others that just won’t have a bar of it, pretty much. You can tell them everything and they just can’t fathom renting while doing this.
I think it just stems back down to your mum and dad, [they] all just pretty much want you to buy the family home, pay it off and own it. Everyone wants that Australian dream of owning their own home. To say that you have 10 houses but that you rent them out and then you rent where you want to live, they just don’t like that. They want to live in that house that’s worth a million dollars but they want it now. A lot of the younger generation that I see, they want their mum and dad’s house today; they don’t want it in five to 10 years’ time.
How do you go about managing your properties?
I have a team around me that does everything. So, I even have my own property managers pay for my rates, they pay for my insurances, they pay for my water bills. I don’t want to touch anything. As you grow a large portfolio, having rates and everything like that coming in to you, you’re pretty much paying a bill every day. So, I outsource all of that to my property managers and they deal with everything. I make sure that they work for their money.
Being able to have the time to just invest into learning is what is key to be a successful investor. You need to have the time to be able to do it. If you don’t have the time, outsource it.
What is your best advice for budding investors?
Houses never go down. It’s always cheaper to buy now than it is in 10 years’ time. To many people, think they’ve missed the boat. You’ve never missed the boat. There are so many markets within markets. There are all different states, so start looking abroad, start looking at different states, start looking at those markets that are more affordable.
Tune in to Daniel Walsh’s episode in The Smart Property Investment Show to find out how he managed to acquire seven properties in six years, and why he’s not just done making bigger and better plans for his future.
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