Friend duo are late starters, big finishers

It was only five years ago that we published an article on an up and coming property investor in Melbourne who, in her late 40s, had teamed up with a friend to have some fun and hopefully make some money.

In that half decade much has changed for Kathy Harvey, whose $1.2 million portfolio has almost quadrupled in value.

Much has also changed in the investment landscape, with COVID-19 creating significant challenges in Melbourne property markets, particularly through Victoria’s extended lockdowns, a handbraked economy and general uncertainty about where it’s all heading.

Although nobody could envisage what 2020 was going to unload upon an unsuspecting world, Ms Harvey’s diversified investment strategy of buying properties in need of improvement and spreading her assets across suburban and regional areas mitigated the risks associated with a more centralised investment profile.

Since 2016, when Kathy and her investment partner and friend jointly owned five properties in suburban Melbourne, that property folder has now doubled to ten, including properties in suburban Melbourne, regional Victoria, one in Queensland and land parcels currently under development in Bendigo (150km northwest of Melbourne) and Phillip Island, home to the motorcycle grand prix, 140km southeast of the state capital.

In that time Melbourne’s median property price has risen from around $715,000 to $936,073 after rising 5.3 per cent in the last three months of 2020, topping the record high of $907,600 that was set in the March quarter before COVID hit. 

Strong capital growth has been complemented by rental income that exceeds any debt obligations.

“The portfolio continues to expand — we have now completed three cosmetic renovations on our properties and one structural renovation and are in the process of doing our first development, with the construction already started, and looking at an additional three more developments in the next couple of years in Bendigo and Phillip Island,” Ms Harvey said.

Buying at a good price, renovating and holding has been the formula that has delivered the duo impressive results.

“All our properties have performed really well and we have chosen to keep all our properties.

“We have good long-term tenants who understand there generally needs to be a yearly increase in rent but in saying that we are very good landlords and always treat out tenants with respect and ensure all repairs are made in a timely manner.

“We have found that our tenants look after the property if we also make the effort to look after them.

“Our Queensland property 20 minutes outside Brisbane was moving slowly but in recent months we have seen some good growth in it and this also has long term tenants that really take care of the property.”

From borrower to business

With a passion for investment and previous work experience as a life coach, Ms Harvey five years ago founded her company, Visions To Inspire All, serving as a finance coach and broker empowering her clients to take responsibility for their finances and comprehend the impact their choices have on their ability to obtain a home loan.

“As a broker, I have a great understanding of lending and what banks need and they require from a potential customer,” she said.

“I work closely with clients in setting realistic goals to put them in the best possible position to purchase their first home or to set them up to grow their investment property portfolio. 

Ms Harvey’s clients now range from first home buyers to those who have grown their portfolio from a single property to anywhere from two to six additional investment properties since they started working with her.

Her own beginnings as an assiduous saver who had to overcome personal hurdles have helped shape her approach to her business and investment strategy.

“I believe once you know what you want, you take the steps to make it happen and for me it was to save for my first house and then commit to paying it down as quick as possible,” Ms Harvey said.

“I had faced some adversity and setbacks in my early 40s, as many people do, but I refocused my life and put a plan in place to get back on track.

“My parents taught me to put any extra cash available at the end of each week on my home loan and this ended up working in my favour, as I had equity to draw down on the first investment property purchase.

Assets and altruism

In a turbulent market dominated by the pandemic and how the crisis will play out in the longer term, Ms Harvey said the focus in 2021-22 is to develop existing properties. 

“We had enough insight to purchase in rural Victoria back in 2016 and coastal Victoria in the last couple of years before property prices jumped and see these markets as looking positive in coming years, while rents have also taken off in these areas,” she said.

“I believe the best price range will depend on your borrowing capacity, which will determine where you purchase and whether that’s a unit or house but the real key is to start with a strategy.”

In the next five years, Ms Harvey and investment partner are aiming to complete at least an additional two developments and add to their investment portfolio, while also helping those in need.

“We are also hoping that in this timeframe we will have enough investors working with us to start providing affordable housing for people in need.

“We are currently developing our new business, Transformation Chicks, where clients can learn the strategies and steps we use to add equity to their properties quickly and increase the potential rent received for each property, starting with cosmetic improvements.”

From two friends attending a property seminar in 2012, a sizable property portfolio has been forged. 

In 2016, Ms Harvey told API Magazine that “if we’re not having fun, we’re not doing it anymore”.

They’re still doing it.