Educator provides a lesson in making an early start in property
Educator provides a lesson in making an early start in property
At an age when many are finding their professional feet and more focused on parties than property, Jack Stevens has chalked up a $2 million profit on six houses.
With a focus on his hometown Geelong and a couple of other regional Victorian towns, the 30-year-old primary school teacher has transformed a modest parental inheritance and hard-earned savings into a lucrative portfolio.
Mr Stevens was a teenager when his father was lost to cancer at just 58 years-of-age. His modest assets were divided among the family, giving Jack a small head start in life.
“He was very property savvy and I think that’s where I get my passion for property from,” Mr Stevens said.
At just 23, Jack already owned his own property in Geelong West outright.
The two-bedroom cottage purchased for $365,000 using the inheritance and a big chunk of savings was paid off in just two years, creating a solid equity base for his subsequent investing.
With an eye on early semi-retirement and a comfortable life for himself and his fiancé Jordan, Mr Stevens is now focused on broadening and building his portfolio.
“We are currently looking at properties in the northern Brisbane area to diversify our portfolio beyond Victoria,” he said.
“My current strategy is to continue to grow our current portfolio with at least one good quality property per year.
“I would love to move into short-term flips once I have a really solid portfolio of properties.”
He has so far purchased six properties in nine years at a cost of $2,722,000. They are today valued at around $4.75 million.
|Property location (suburb)||Purchase year||Price paid||Now worth||Rent yield (or income)||Rental Type|
|Geelong West, VIC||2012||$365,000||$800,000||Averaging
$1,000 per week
|Geelong West, VIC||2014||$385,000||$810,000||Averaging $1,000 per week||Short-term|
|Herne Hill, VIC||2015||$157,000||SOLD 2018
|$220 per week||Long-term
|Moolap, VIC||2016||$620,000||$1,100,000||Principal residence|
|Daylesford, VIC||2019||$430,000||$800,000||Averaging $1500 per week||Short-term|
|Ocean Grove, VIC||2021||House and land
|$1,000,000 (Due for completion mid-2022)||$600 per week||Long-term|
Willpower, determination and a goal-oriented character ensured Mr Stevens made some youthful sacrifices to reach his longer-term goal of financial independence.
“Early on I always was very frugal when shopping and going out, but this has loosened over the past couple of years.
“I now have regular holidays and buy nice things as a reward for the hard work and determination.”
His interest in property investment is evidenced by his recitation of his hobbies and interests, which he declares are, “reading about property, property renovations and property podcasts.”
Like many investors, his first forays into expanding his portfolio focused on his home town. After paying off the first property in Geelong West, another one followed in the same area and then others in family-friendly Herne Hill and the residential-industrial Moolap, both suburbs of Greater Geelong.
“The appeal was that I was familiar with the areas I was purchasing in and had a thorough knowledge of good pockets of streets and desirable areas,” Mr Stevens said.
“I was able to attend regular open homes to see what properties were in demand, what buyers were looking for and have a greater understanding of what the market value was of properties.
“I also got to know some real estate agents in the area who I would call on for advice.”
As one of Australia’s few spa towns, Daylesford is a notable tourist destination. The town’s numerous spas, restaurants and galleries are popular alongside the many gardens and country-house-conversion styled bed and breakfasts. Ocean Grove is a small seaside town on the Bellarine Peninsula
“Buying in Daylesford in December 2019 was a bit of an unexpected location; we actually found the property first and I knew the short-term rental market was very strong," Mr Stevens said.
“The property and location ticked lots of boxed, such as a good 10-year median growth, good rental yield, a great block size of 732sq metres, a street that had achieved great sales results, a house that was structurally sound and would benefit greatly from a cosmetic renovation, so we put an offer in and secured the property for the asking price.”
Values for his earlier purchases have more than doubled and the portfolio shows little sign of losing steam.
The Geelong market has been booming since Christmas, proving to be a popular market for home buyers due its proximity to Melbourne, access to beaches and the availability of quality education facilities.
In Ocean Grove, scene of his newest addition, increases of almost 10 percent have been recorded in 2021.
“I took 12 months leave from work last year to have a personal break and also used the opportunity to renovate the Daylesford property and oversee the jobs I didn't have the experience in," Mr Stevens said.
“It was a full cosmetic renovation, with a new kitchen, bathroom, interior and exterior paint job, update of all lighting and hardware and polishing the concrete floors under the old tiles.”
Yielding to short-term rentals
Despite the imposition of COVID-19 on travel and mobility, three of the four rental properties are short term rentals.
Although more labour intensive than a long-term renter, Mr Stevens uses a popular short-term accommodation service and, impressively, manages his properties while juggling full-time employment.
“I am still using Airbnb — the returns are much healthier but also carry a higher risk and are much less passive than long-term tenants," he said.
“I manage all of the bookings, communication, reviews, cleaning schedules and property maintenance myself.
“Last year was tough but I adapted and got some six-month renters in to cover the extended lockdown periods.”
As lending regulations tightened, finance became a little more challenging but his latest two purchases have been made with his partner, making the process less onerous.
“I was always using fixed term loans, however, now with some savings, I have one loan split between fixed and variable and the rest are fixed for four years," Mr Stevens said.
“I have always stayed with Commonwealth Bank for all of my lending.”
When asked what advice he could offer other young investors looking to make a start on the property investment path, Mr Stevens’ emphasised the importance of being well informed.
“Do your research and read as much as possible, listen to successful investors for advice and not people who have no experience in the property investing game, listen to property podcasts, and attend free workshops and seminars," he said.
“And I also love the flexibility that houses offer, over units, without having to go through approval with body corporates.”