Decades of success provides lessons for aspiring property investors
Whether forming Hong Kong's first Aussie rules football team or creating wealth through a significant property portfolio, Melbourne-based Ray Wood has been kicking goals on and off the field.
With significant wealth built on the back of 12 property purchases over several decades and a respected career as property valuer, consultant and vendors advocate in Victoria, 68-year-old Ray Wood is close to retirement but his advice to younger investors is as salient as ever.
Choosing properties with potential for improvement and creating a diversified portfolio is the ultimate goal but hard work and sacrifice is the central pillar to success, according to the experienced investor whose properties range from traditional three-bed Melbourne homes to large regional vacant blocks, a Surfers Paradise penthouse and southeast Queensland properties.
His advice to those trying to secure their own financial future centres on starting early and capitalising on a lifetime of growth potential in a range of asset classes.
“Property has, is and should always be an integral part of anyone's wealth creation strategy, so work as hard as you can, including second or third jobs, save hard and borrow sensibly for long-term appreciating assets such as property, and not depreciating assets like cars, household items or holidays,” Mr Wood said.
“It is also especially important to recognise the long-term importance and compounding effect of low fee superannuation funds early and the creation of a blue-chip franked share portfolio in due course.
“The huge tax advantage benefits of upgrading your family home throughout life, including paying no capital gains tax on your principal residence, and also with superannuation, should always be a major consideration.”
The omnipresent debate in property circles revolves around whether investors should be timing the market or purchasing with a view to a perceived longer-term certainty that prices will rise, even if the gains take time to materialise.
The Principal of Ray Wood Property Consultant and Vendors Advocate believes timing is important but emphasises that quality locations will always perform well over time.
He has reduced his own portfolio to two properties, including his luxurious six-bedroom home near the beach, shops and train station in Parkdale, Melbourne, where he lives with his wife and one of his two adult children.
Ray Wood's property journey
|Oakleigh, VIC||Vacant 2-unit development site||Feb 1977: $13,000||Aug 1977: $20,000|
|Beaumaris, VIC||1950s 3-bed dwelling on 650m2||Feb 1979: $41,000||June 1982: $83,000|
|Cheltenham, VIC||New 90% complete 3-bed dwelling on 550m2||March 1981: $42,000||July 1982: $68,000|
|Mentone, VIC||1960s 4-bed dwelling on 700m2||July 1982: $84,000||Nov 1987: $173,000|
|Parkdale, VIC||3-bed weatherboard dwelling on 640m2||Jan 1980: $42,000||June 1985: $139,000 House
April 2005: $465,000 Unit
|Surfers Paradise, QLD||Older 2-bed unit 150m from beach on development site||Feb 1979: $125,000||May 1999: $171,000|
|Surfers Paradise, QLD||Original 3-bed penthouse in same complex as above||May 1999: $195,000||April 2022: $1 million|
|Surfers Paradise, QLD||Older 2-bed unit 160m from beach on development site||April 2002: $170,000||Current value: $1 million|
|Arundel, QLD||Golf course Frontage residential land on 830m2||March 1993: $123,000||April 2005: $680,000|
|Parkwood, QLD||4-bed brick dwelling, zoned park residential, on 8,900m2||Aug 1997: $290,000||July 2003: $1.5 million|
|Robina, QLD||Vacant golf course frontage of 1214m2||June 2005: $435,000||Oct 2015: $680,000|
|Parkdale, VIC||Beachside 1950s 3-bed weatherboard dwelling on 680m2||April 2005: $578, 000||Current Value: $4 million|
He’s offloaded a couple of properties in the past few years and has positioned himself to capitalise on any price falls that may come over the next couple of years.
“I think Blind Freddy could predict what is currently happening to the property market throughout Australia and I've seen it happen many times before but the market will recover in due course as per usual and I'll be in a cashed-up position to take advantage of that, probably towards the end of 2023.
“I'll be looking at absolute beachfront apartments on the Gold Coast, downsizing our large family home to something smaller in Sandringham or Parkdale in Melbourne and considering commercial-industrial opportunities, also in Melbourne,” Mr Wood said.
Residential rent yields have only ever been a secondary consideration in his planning.
“For residential properties it’s all about a superior location with capital growth potential that will always lease easily but the yield may not be that high, say 2 to 3 per cent.
“It’s a little different with commercial/industrial properties, where location is still a vital factor but yield and rental growth is equally important.”
Investments within reach
His penchant for southeast Queensland and Victorian properties stems from a philosophy of buying where you know and where you can personally inspect or manage the property.
Mr Wood’s career has spanned continents and states, including stints as a valuer in Melbourne, contract valuation surveyor in Hong Kong, real estate director in Surfers Paradise, property consultant in Broadbeach on the Gold Coast, a retirement community sales manager on the Mornington Peninsula in Victoria, to his current role as a property consultant and vendors advocate in Melbourne.
Asked if he had ever bought internationally, Mr Wood expressed a mix of regret and pragmatism.
“I lived and worked as a property valuer in what was then the British Colony of Hong Kong for just over three years for the Hong Kong Government but it was just after the Beijing Tiananmen Square Massacre in 1989, so no Australian expats purchased property in Hong Kong as it was feared the Red Army would cross the border and take over, which it has effectively finally done now.
“I wish I had purchased back then though, as I could have purchased the luxury apartment I lived in for about A$300,000 in 1989, which when I left it was worth A$3 million and subject to no capital gains tax.
“Having said that, I firmly believe that any property owner should reside in relatively close proximity to their investments or have the ability to regularly inspect their asset in any regional or interstate location in which they own, otherwise it can turn out to be a can of worms.”
“I wouldn’t recommend buying in a foreign country unless you are fully aware of all property and taxation laws inside out.”
While buying and selling property has been integral to his financial success, superannuation has also been a core component of his strategy, with property profits frequently funnelled into this long-term savings tool.
“I have owned up to seven properties at any one time in Victoria and southeast Queensland but I also firmly believe in diversification, so my superannuation portfolio was built up commencing back in 1973, at first through employment income and in due course with property sale profits.
“It is now spread throughout a number of industry super funds and our SMSF (self-managed superannuation fund) across all asset classes in higher risk options.”
Getting a kick
His own upbringing was typical Australian suburban working class, growing up with his parents and two older brothers in Mckinnon, in southeast Melbourne, in a three bedroom weatherboard home his father built after returning from serving overseas in the army during World War II.
“I didn't specifically know what I wanted to do growing up but I knew it would mean being able to work in the private and public sectors, with the ability to be employed within Australia and internationally, to be able to become financially independent at a young age, use my initiative and, very importantly, enjoy my career.
“The various streams of the property industry have allowed me to achieve these goals.
“I worked in Hong Kong as a Senior Contract Valuer with the Hong Kong Government from September 1989 to December 1992, responsible for half the Kowloon Peninsula with a team of local assistants, an interpreter and chauffeur, which was a great experience.
Outside of his reputation within the property sector - in which his business eschews websites and self-promotion and operates solely on word-of-mouth and referrals - Mr Wood is regarded as no less than the father of Australian Rules Football in Hong Kong, and even Asia.
It may at first appear a niche claim to fame, but since he established the Hong Kong Dragons Football Club in 1991, the game has spread to 20 countries and territories throughout Asia.
There are an estimated 18,000 registered players, including kids’ Auskick, women’s teams and an annual Asian Championships competition.
“I consider Aussie Rules in Asia to be one of my greatest achievements in life,” Mr Wood said.
It’s no small claim for an investor and property professional who is still kicking goals off the field in the investment arena and helping others to do the same.