Former dental aspirant sinks teeth into property investment
A 24-year-old with a sprawling property portfolio encompassing 19 residential and commercial properties across Sydney is enough to make even the banks do a double-take.
It’s not just the average investor that is impressed when they hear about a 24-year-old with a sprawling property portfolio encompassing 19 residential and commercial properties across Sydney; even the banks are inclined to express disbelief.
Once an aspiring dentist, Wahib Wehbe from Canterbury Bankstown became a dedicated investor and property developer when his developer father passed away and he took on the onus of managing the family business.
His father’s legacy was valuable but also came with the sort of responsibility that doesn’t always sit easily with a young man harbouring his own ambitions.
But Mr Wehbe has proven to be determined and adaptable, and since attaining an honours degree in construction management, majoring in construction economics, has built and diversified the investment vehicle known as A and W Developments.
“It was never my intention to work in the property sector as I had a passion for the dental industry, however, after the passing of my late father, and being the eldest, I had to step up and take over the business,” Mr Wehbe said.
“The foundation and tools were already put in place by my hard-working father; it was my role to understand how to utilise and navigate all the tools and opportunities available to me and expand the portfolio to what it is today.”
Complementing his university studies, Mr Wehbe embarked on a self-teaching regime to bring himself up to speed with the industry and markets that involved reading books, watching interviews, listening to podcasts and seeking out inspirational people to expand his knowledge base and assist with day-to-day decision-making.
The outcome of that concerted effort is a portfolio of developments ranging from high density residential to commercial properties around Sydney.
The average price range of each property is today around $4 million to $6 million with an average rental yield of six per cent.
“The inner-west appeals to me due to the diverse nature of the areas and the great potential due to its centrality and the myriad work and nightlife opportunities,” he said.
Single and with no plans for a very early retirement, Mr Wehbe said the business that was, to a certain degree, unexpectedly imposed upon him, had grown into a passion, lifestyle and hobby.
“The ultimate goal is to keep growing the portfolio and expand into different property types, such as boarding houses, retail and commercial spaces, other residential property, hotels and car parks.
“I have also considered expanding into different states as there is growth potential in different parts of Australia but early retirement or even retirement in general is something I haven’t really thought about,” he said.
Banking on success
Despite being in a situation where the portfolio has significant equity and surplus liquidity due to the rental leases that have been secured, contending with bureaucracy remains the biggest operational challenge.
“Dealing with banks is probably the biggest hurdle I’d face in managing the enterprise, which really just gets down to my age and their need to mentally process the business separate to my relative youthfulness compared to most of their clients with a comparable asset base,” Mr Wehbe said.
“The red tape involved in organising new developments would be the next biggest obstacle to be overcome, as it’s a lengthy process from start to finish working with local councils and the various consultants but having done this for quite a few years now, I’m accustomed to the processes and aware of the potential pitfalls.”
With such an extensive portfolio, much of the property management volume is outsourced.
“A company called :Different manage all of my rental properties in Newtown as they have a monthly flat fee that has saved me quite a lot of money in the long run, given the amount of properties they manage.
“I much prefer to have a flat rate charged than a percentile charge for each property.”
He largely avoids the transactional costs and time associated with flipping properties, preferring to adopt a policy of buy, develop and hold as long-term investments.
“Most of our sites are old properties in which we see potential, and then design and construct to maximise that land,” he said.
The temporary tenancy moratorium introduced to restrict when landlords could evict tenants due to rental arrears as a result of COVID-19 ended on 26 March but Mr Wehbe does not expect rent revenues to rise any time soon.
“My prediction is that rents will plateau for the next few months.
“Rental vacancies in Sydney are higher than what would be considered normal in previous years, however, with government help coming to an end it’s going to be a struggle for the rental market to bounce back to where it was.”
Wehbe said that with the added burden of JobKeeper ending, it was a time for landlords to be flexible in rental arrangements with tenants.
Two of his tenants sought help and rent reductions during COVID.
“If any of my tenants need help, I am open to workshopping some arrangements and finding a middle ground with them that works for the both of us.
“This approach served me well during COVID and I believe will have the same result once JobKeeper ends too.”
“Family and health are the most important things and by offering a rent reduction, my tenants were able to keep a roof over their families’ heads and enough food on the table.”