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MARCH 2014 API
ever come across and I can’t get out of the
contract. The house was trashed – I mean
the sort of trashing you see on the current
affairs shows – and they took so long
organising the repairs and insurance that
I nearly went broke. It was very stressful.
“We got past it but it was a lesson for
everyone that you must have a good
property manager and a financial buffer
for these situations.”
Terri has never entertained the thought
of managing any of their properties. She
recognises property management is a
highly specialised area and says that
“as a property manager I make a really
By the same token, she also has found
out very quickly the difference between
an effective property manager who’s
working for the owner and one who’s
simply collecting their percentage and not
looking after the property.
// BUYING MORE PROPERTIES –
The remaining investments went a lot
smoother. With Seaford Rise providing
encouragement, Terri went forward
and quickly purchased a four-bedroom
Queenslander in Mackay, a couple of
units in Moree in outback New South
Wales and a three-bedroom Bendigo
house before the end of 2012. Houses
in Cessnock and Redbank Plains near
Ipswich would follow the next year.
“I guess my philosophy, which was
reinforced through the course, was to
balance risk with reward,” she says.
“I gained a real appetite for looking at
risk and mitigating it so you can keep
your long-term goals. I realised by the
time I was ready to buy our first property
that you need to have long-term goals and
the nerve to follow through on them and
I think I have the right approach to deal
with it. I’m a worst-case scenario sort of
person so, while there may have been
what appeared to be risks, I would always
look at them carefully and make certain
that any risk was minimised.
“The research is all done on the internet,
I’ve never set foot in any of the properties.
When you think about it logically, what
difference does to make? If I walk through
a house, I’m looking at superficial things,
I’m not getting into the crawl space or
climbing into the roof.
“Whenever we look at houses in an open
inspection, we allow our emotions to take
over. I research the area and look at the local
market, knowing whether it’s a good buy
for that area, then I have a pest and building
inspector investigate and, of course, the
sale is subject to a satisfactory report.
> Educate yourself. Learn about each market, from property values to tenant demand
and likely rents to plans for the area that could impact in both a positive and
> Talk to people. Find like-minded people for support, build a network of investors.
> Cover yourself. Make certain you have the necessary insurance. This isn’t just building
and landlord’s insurance but income protection, trauma and disability insurance. It’s
not cheap but it covers you against losing everything in hard times.
> Read the fine print. Before signing any contract, including the engagement of a
property manager, read the fine print carefully.
> Investigate your financial options. We probably could have set this up better with a
line of credit and using deposit bonds so we’d advise people to consider all options.
TERRY AND WALLY’S TOP TIPS FOR INVESTORS
The Mackay investment
When it’s time to buy, I start by throwing
a really wide net on realestate.com – say
three-bedroom houses under $200,000 –
and slog through the list until a couple of
candidate areas come up.
“Another thing is to research an area
other people are looking at – you don’t
have to reinvent the wheel but you must
do your own research.”
¿ GETTING THE STRUCTURE RIGHT
Finding the right property, Terri says,
is just part of the trick to developing
a successful property portfolio. It’s
also important to have finances and
ownership structures in place.
“I set up a self-managed superannuation
fund with two houses linked to it, which
was something I learned through a
Property Women seminar,” she recalls.
“It’s just a different ownership structure
and provides flexibility.
“I went flat out for a while, which was
fine, and it put us well ahead of schedule
for our 15-property goal but I had to slow
down because I ran out of equity.
“We’re waiting for the market to grow
so our values increase but, meanwhile,
they’re all paying their way.”
They may all be paying their way but
Terri is keeping one eye on the possibility
of expanding into development when the
Three of the purchases, at Davoren
Park, Moree and Cessnock, measured
almost 1000 square metres each and were
bought with a view to their development
potential down the track.
“Right now, I’m just waiting for a while
to consolidate,” she says.
“We had to do renovations on the
Cessnock property and one of the Davoren
Park duplexes was trashed by a tenant so
this all ate into our buffer.
“It’s all a learning experience but I don’t
have a bad view about the area. Most
tenants in areas like Davoren Park pay
their rent on time and do the right thing.
“We’ve slowed down but I’m always
watching and I still run my searches most
days of the week, in case something
comes up that’s too good to pass up.
“I recently saw five units in country
Victoria for $165,000, returning $100 a
week rent each and I was so tempted.
But I accepted advice from people who
know better than me that they may have
provided cash flow but there was no
potential for capital growth.
“I want both. So I’ll just keep looking
harder, there’s no hurry, and wait for the
right opportunity before expanding the
portfolio again.” API
TERRI AND WALLY HARTWEGER \\ INVESTOR PROFILE
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