Expert In Focus - Melinda Jennison
t was her family that ultimately got Melinda Jennison started on her journey from first home buyer to investor and finally property professional. Like many young couples in Australia, Melinda and her husband wanted to get started by owning their own home from day one and were prepared to jump straight into the market as property owners instead of tenants.
""I bought my first home at a young age because my dad was a property investor and he always said to me that rent is 'dead money'.""
So, I had this thing in my head that I shouldn’t rent. Instead, when I decided to move out of home, and that was at the same time I met my now husband, we bought our first property together. I was 18 years old at that time.”
When buying her first property, Melinda was never really thinking about the capital growth that she could achieve from the property. But after a few years, she quickly saw the power that property investing could deliver.
“We sold our first home about six years later, having done a little bit of renovation work on the property, and made a huge profit. We were able to upgrade our home and obviously that set us up for the future. That first property purchase was probably the best move that I ever made.”
Melinda's husband, Scott, has been a builder for many years and subsequently when the couple upgraded into their next home, they renovated it to generate additional equity. They then used that equity to start building a property portfolio in inner-city blue-chip locations.
Having the ability to add value through building and renovation has been a cornerstone of Melinda’s investment strategy as she went on to look at different opportunities.
“We bought an old run-down Queenslander in a good suburb, then did a full structural renovation on that property. Upon completion, we were able to rent the property for a very good price and we also had the benefit of high depreciation as well. It made it a very affordable hold and the capital growth has been very good because the location is desirable for homeowners as well as premium tenants and it sits within a great school catchment area.”
“We also purchased a holiday unit up at Noosa and we added value to that as well through renovation. But we soon realised that not all property performs the same. And through our own mistake, we realised that the Noosa property really wasn’t appreciating at the same rate as the premium properties that we owned in Brisbane. So, we decided to sell that and let our money work harder for us in properties with better capital growth potential”
“Given that we were commercial and industrial builders, we also retained one of the industrial warehouses that we built, and we still own that property today which is delivering a fantastic yield. So, we are experienced investors in many different types of properties.”
“More recently we’ve expanded into small residential property development projects. We purchase sites with development potential and add value by knocking down old homes, putting development approvals in place, and then constructing units.”
“We did a project with a boutique block of seven units in Brisbane and sold all of those back into the market. We have another site at the moment, which is two homes side-by-side with a Development Approval in place for more boutique units. This is located in an inner-city suburb close to public transport and lifestyle amenity.”
While overall her property investment journey has been a highly successful one, she has also had some challenges. The current lending environment is making it difficult for many people involved in property development. She has also had some misses, with her holiday investment property in Noosa, which didn’t appreciate as quickly as she would have liked, and the subsequent opportunity cost taught her some valuable lessons.
In recent years, Melinda has transferred her many years of experience, buying, building and developing properties for herself, into a career as a buyer’s agent, where she is able to help others achieve the same kind of success she’s had. She has also completed the accreditation course through Property Investment Professionals of Australia (PIPA) so that any Clients looking for Property Investment advice, can be sure that they are receiving a property investment plan that is specific to their goals and personal circumstances.
“I already had the skills to locate great performing assets and to locate properties that had development potential, which gives people an alternative exit strategy when it comes to property investing. So, it seemed logical that I could help others to understand what makes a property a great performer. Now Scott and I are working together, combining our skill sets and not only finding properties on behalf of other buyers, but also identifying ways that they can add value to those properties through renovation, refurbishment or development and then placing them strategically in those opportunities.”
There are some key benefits to working with a buyer’s agent and Melinda is very big on not just locating good properties, but having an all-encompassing investment strategy that gives you multiple exit options and ways to generate additional equity.
“It’s really important to understand what a buyer’s long-term investment goals are so that we can match a strategy to their goals because with property investment it should never be a one- size-fits-all approach.”
For new investors, Melinda suggests that they get educated on the factors that drive property prices and get started as soon as they can by buying the best property they can afford right now.
“It’s important to remember that the property location does a lot of the heavy lifting. So, for a lot of people, even if they’re buying a home, they need to consider how that property can potentially set them up for a comfortable future. The best thing about property is that once you buy in the right location, you can change the property through renovation, refurbishment or through a complete rebuild to get the perfect home in the perfect location.”
In her hometown of Brisbane, Melinda believes there are still some excellent buying opportunities for savvy property investors.
“Within Brisbane, according to the latest CoreLogic Data, we have four of the top ten performing sub-regions for capital cities across Australia in relation to capital growth. We happen to be buying in a couple of those sub-regions for our clients. They are areas that have great opportunities for future employment.”
“The Queensland Government has declared priority development areas that have been identified for accelerated development with a focus on economic growth. We have been buying in one of these areas. The price of properties in this location is still generally sub-$500,000 for investor clients and the holding yields are upward of 4.5%. There’s also a lot of unrealised potential in the land because some pockets have recently been rezoned for higher-density development and a lot of people don’t understand the value that lies in the land itself.”
“The opportunity is huge. The area is serviced by a train line with direct access to the Brisbane CBD. There is also the potential to add value by manufacturing some additional equity in the existing homes, just cosmetic renovation to hold long-term if that’s what the investor desires. Then when it is time to sell, you have a greater number of potential exit strategies. Sell to a homeowner, sell to another investor or sell to a developer”