Read the Prequel: Getting the Experts in: Empower Wealth Review – a detailed description of my experience using empower wealth and purchasing my first investment property.
Do I Regret Buying Property as an Investment: the First Six Months
Just over 6 months I finally took the scary leap buying property for investment purposes. I say finally, because I have had a vague plan to invest in property for over 15 years, but never felt I was financially ready or knowledgeable enough before last year. Six months later, it’s time to consider whether I regret investing in property like I was worried I would be.
I spent a long time weighing up the pros and cons of property vs shares. Then spent hundreds of hours reading property investment book, listening to The Property Couch podcast, analysing data from Your Investment Property Magazine and walking the streets before finally deciding to use a professional buyers agent.
The looming election in 2019 helped me bite the bullet – labour intended to end negative gearing (apart from on new properties).
I wanted to get in to the property market before any changes occurred.
Labour lost that election, and negative gearing is probably safe for another few years. But I thank Labour for creating the urgency needed to end my analysis paralysis.
I had, based on another medic’s recommendation, started listening to the Property Couch podcast.
Over many episodes, I had developed a sense of trust in Bryce and Ben, the friendly duo imparting free wisdom every week.
I reached out to their company, Empower Wealth for help in selecting a great quality property investment. My detailed review of Empower Wealth is here.
Closure of the property went very smoothly, Empower Wealth walked me through each step with clear instructions and great organisation.
They helped me select a property manager who started viewings for rent before exchange and I had multiple tenants applying to rent the property – outbidding each other to secure the home.
This level of competition was not expected but encouraging. I had been pretty nervous so was reassured the potential tenants obviously thought it was a great property.
Buying Property for Investment: Teething Problems
My new property agent helped me pick through applications and weigh up pros and cons of each potential tenant.
I ended up signing a contract with the most reliable and trustworthy sounding tenants. This was all made easy by the property manager.
There were a number of phone calls in the first two weeks, and I found myself concerned this property investment deal was going to be a big hassle.
There were minor unforeseen issues, like the oven not working and needing to be replaced, tenants having difficulty finding plumbing to attach a washing machine.
None of this was especially cumbersome, but if it was a weekly occurrence going forward, I would have resented the hassle. I was looking for a passive (ish) investment, not a weekly commitment.
Things settled down though. The initial issues were fixed, the rent arrived regularly on time, and the property manager organised payment of all bills, taken from the rent.
It should be pretty easy at tax time to have all the property income and expenses (apart from interest) recorded on the property manager’s online platform.
The property manager communicates regularly by email, which suits me well. They also have an online portal I can log on to view expenses and rental income. The net rent is transferred to my offset account every fortnight, to put towards mortgage payments.
So far my calculations on affordability have proven conservative, and I am having no issue with covering the mortgage payments.
I accompanied the property manager for the first inspection, which went well. The tenants have extended their lease, which I’m thrilled about.
For now, things are pretty easy. The repairs required have been very reasonably priced .
I’m grateful to the property manager for having a network of proven reliable and fair priced tradespeople. I haven’t got a similar list for my own home where I have lived for over a decade.
So far, I’m really happy with my 1st experience buying property for investment. I am realistic that there will be times (particularly around change of tenants) that it will be a bit of a hassle – making decisions, choosing tenants and following up on damage after tenants have vacated. Having a property manager has shielded me from most of the work involved.
We’re saving hard again, with the rent coming in being more than we had planned for, and further drops in interest rates we are already saving for our next property deposit.
It’s too early to know whether the property is performing as predicted, I’ll update when I have a new valuation.