My fourth property purchase came eight years after my first.
By that point, I had already bought:
- My first home in Ipswich,
- The home I shared with my mum in East Brisbane,
- And my own home in East Brisbane.
I’d also made an expensive mistake by selling another East Brisbane property too early; a decision that ultimately cost me around $600,000 in missed growth.
In June 2019, I moved into my family home. Six months later, I got engaged.
At the same time:
- My home had grown in value, giving me access to equity,
- My income had increased,
- And my fiancée and I now had two incomes.
For the first time, I had the ability to expand my portfolio significantly. Then Covid hit.
The world was melting down, markets were panicking and the headlines were predicting impending and ongoing disaster.
The Reserve Bank slashed interest rates to 0.25 per cent. Ironically, while fear was everywhere, affordability had never looked better.
If we stretched ourselves – and I mean really stretched – we could buy two properties instead of one.
My mentor was adamant, saying:
“We are on the cusp of one of the biggest property booms you’ll ever see. While everyone else is panicking, there will be opportunities that people look back on for decades.”
I had ignored his advice once before, choosing to sell my East Brisbane property. Instead of holding. That mistake had cost me dearly and I wasn’t going to make another one … so my wife and I went all in.
We bought two properties side-by-side in Pimpama on the Northern Gold Coast, borrowing virtually the maximum the bank would lend us.
At the time, the fundamentals stacked up; one of the fastest population growth rates in the country, land directly opposite a private school and shopping centre, and a future train station planned just across the road.
The two properties cost us a combined $1 million.
Today, six years later, they’re worth more than $2 million combined. Their rental income has grown from roughly $900 per week to around $1,500 per week.
That’s one of the most overlooked drivers of long-term property performance: rental growth.
Looking back, the decision now seems obvious. But at the time, it felt anything but. Every second ‘expert’ was forecasting property prices would collapse.
Economists – the weathermen of property forecasting – were predicting prices would fall 6 to 12 per cent over the following year.
It felt like swimming against the tide.
To be clear: I didn’t predict what would happen next.
I had no idea those properties would perform the way they did. In fact, I’d have been happy if the properties performed half as well as they have. I simply backed the advice of someone who had already walked the path before me.
That’s why today feels strangely familiar. Once again, people are forecasting doom. Once again, fear is dominating headlines.
And once again, my mentor believes we are standing at the beginning of another major property boom.
His words? “This is the second coming of Covid.”
This time, I know exactly what I’ll be doing.
