Expert In Focus - Lloyd Edge
Seasoned investor, Lloyd Edge quickly realised that if he was to continue to work his regular job, he was never going to be able to afford his dream home and would struggle financially in retirement. He now helps others achieve their goals in his work as a buyers agent.
hile Lloyd Edge always had a passion for property, it wasn’t until he came to the realisation that he wanted to live well, that he actually made the leap into property investment. Since that moment, Lloyd has gone on to purchase multiple properties and currently owns 16 in his portfolio.
""I decided that I really need to be able to create equity going into any property purchase. I need to be able to add value to a property, rather than just waiting for growth. That was really the beginning of my 'aha' moment.""
Prior to his first property purchase, Lloyd was a teacher and musician. And while he loved his career, he was worried about having enough money when he ultimately retired. At that point, he decided the time was right to invest in his first property.
However, his early foray into investing wasn’t what he hoped it would be. His timing and buy and hold strategy wasn’t the ideal combination for that moment in the property cycle.
“When I first started investing it was completely different to what I’m doing now. Initially, I didn’t really have a strategy like a lot of people. Essentially I was buying property in Sydney. Sydney’s generally not a bad place to be buying property, but I bought just after the boom of the Sydney Olympics. So I was actually buying not only without a strategy but at the wrong time of the cycle because I’d actually missed out on the growth.”
“Sydney was quite flat for about four or five years and I found myself getting into debt, with the rent not really covering what I had in terms of the mortgage so I was a bit negatively geared. And that was a little bit of a struggle with my teaching income.
“I was lucky to some extent because in hindsight most of those properties I still own today. Over the years they’ve grown in value a lot, but for the first few years that was a bit of a struggle and that’s when I then decided that I needed to have a strategy because there needed to be a better way of doing things.”
While it was a tough time and Lloyd missed out on the capital growth during those years, he was able to turn it around to a positive for him as he realised he needed a strategy that would actually allow him to add value to the property on top of whatever growth he was able to achieve.
“I decided that I really need to be able to create equity going into any property purchase. I need to be able to add value to a property, rather than just waiting for growth. That was really the beginning of my ‘aha’ moment.”
From that point, Lloyd began looking at subdivision and small-scale developments as a way to manufacture equity, allowing him to grow his portfolio faster at the same time.
“When I built my first duplex and sub-divided that, the amount of equity I made was twice as much as what I was earning in a whole year from teaching. So that was the moment where I realised that I can do something with this and I thought, “Why am I getting up every day and slaving away doing a job when I could just do this and repeat the process through property and create equity and grow my wealth much quicker?”
Adding value through subdivisions has also been advantageous when looking to scale up his portfolio. As lending conditions have continued to tighten, the strategy has been a positive when trying to access lenders.
“Investors generally reach a limit where the banks won’t lend you any more money, but by building duplexes that actually assisted with that side of it because it was creating equity so the banks could see that as rent-favourable and it was also dual cashflow.”
“And instead of just buying a property and waiting for some growth before I could buy another one, I started to be able to do what became several properties a year just using equity and manufacturing capital growth instead of waiting for capital growth organically.”
Using this type of investment strategy allowed Lloyd to continue to grow his equity and helped him purchase his dream home. All thanks to having a clear strategy in place.
“I first lived in a one bedroom apartment and built it up from there to now owning a large waterfront property.”
As his friends and family saw his portfolio growing by the year, many started asking for his help in beginning their own property investment strategies. Lloyd loved being able to help others achieve financial success of their own and thought that it might be something he wanted to do more of going forward. From there Lloyd started the process of becoming a buyers agent.
“I was exceptionally passionate about property and the vehicle that it is for creating financial independence. I wanted to impart that knowledge onto other people and help people.
“Initially, it wasn’t my original plan to become a buyers agent or to have a property business at all. But because I was doing quite well with my own investing, I had family and friends asking me for some investing advice and then I ended up getting my real estate licence and then started my business so I could help other people.”
“When I started out investing, I realised that there are so many real estate agents out there just selling a property and I feel that the buyer is under-represented.”
“I knew that I really wanted to be able to go out there and represent the buyer and help people really negotiate good deals on properties because in my early days I found it a bit nerve-wracking talking with real estate agents and trying to negotiate a price. And I’m sure sometimes I paid too much for a property because I was too scared to hold firm on what I believed in. And I know these days a lot of my clients are in the same situation. They don’t have the confidence or they’re time poor. So I just want to be able to assist people to be able to do that.”
A key aspect of the work Lloyd does with clients is developing strategies that will help them achieve their financial goals as quickly as possible. Whether that is being financially free in retirement, or owning a dream home like Lloyd and his wife now do.
“It’s all about that strategy. Every single client that I work with, the first thing we’ll talk about is strategy and what they’re trying to achieve because I’ve been very fortunate with what property’s done for me. I feel very lucky with that and I want to try to impart my knowledge onto clients and really find out what they’re looking to achieve, what their goals are, what their dreams are, and then we can talk about how a property portfolio can assist them to achieve that.”
Despite the state of the Sydney property market at the moment, Lloyd still believes there are good opportunities out there for savvy buyers.
“I always believe that now is always the best time to buy. So people shouldn’t be procrastinating thinking that the market’s going to fall further or they should be waiting or worried about the election or anything like that.”
“Particularly in Sydney and even other areas like Melbourne, there are great opportunities to buy at the moment because the market is down. So having good opportunities to play with, better prices, fewer buyers in the market, so you’re not going to pay too much. Whereas during boom periods, you actually end up paying a bit too much and there’s more competition and you’re probably buying at the wrong part of the cycle.”
“But for me, it still comes back to my strategy that I still use these days, which is just adding value. So whatever you’re looking to do with a property, you should be trying to add value. And if you can add value, and that can be through a cosmetic reno, it could be through a small type of development, or it could be through adding a granny flat, any of those things add value to a property.”
“That means you’re actually manufacturing some growth regardless of what the market does. And I think that’s important in the current markets that people feel what the market’s doing and whether it’s going to get any growth or anything like that. What you need do is take control and add your own value to it.”