From investor to consultant: Edward Reavy's property journey
Property investor Edward Reavy has remarkably built an 11-property portfolio worth more than $10 million, and now he's set his sights on teaching others how to build wealth and achieve financial independence.
Eighteen months is a long time in the world of property investment.
When Australian Property Investor Magazine last spoke to Edward Reavy, he had transformed a parental gift of a London studio apartment into a profitable six-property portfolio spread between New South Wales and Queensland.
Since then, Mr Reavy has continued to build his portfolio, which currently comprises 11 properties and is worth more than $10 million, comprising houses, apartments and dual occupancy assets.
As well as continuing to amass assets, he has taken his passion for property investment and turned it into his business. As founder and director of EKR Property, Mr Reavy has lived by his favourite adage, as coined by late US entrepreneur and author Jim Rohn: “Formal education will make you a living, self-education will make you a fortune”.
We spoke to Edward about his journey up the property ladder.
Tell us a bit about your new property investment business. How and why did you make the transition from investor to business operator?
EKR Property is a boutique property consultancy company focused on building wealth and financial independence from property. We assist everyday Australians to purchase residential real estate across Australia, while minimising risk and maximising returns.
I have enjoyed investing in property, and have treated my investing as a business for a number of years. I identified the need for someone with hands-on personal experience to manage clients’ fears, expectations and reservations when buying, developing or building a property, hence the foundation and building blocks to EKR Property.
You speak of the value of self-education but also have a solid educational background too.
Yes, I attended boarding school from age four to 18, where routine, respect and discipline were drilled into me. These are traits that have assisted me on the path to success.
Routine – once something is in your normal routine, it’s easier to accomplish everything, because it becomes a habit; respect – a way of treating or thinking about something or someone. If you respect your client, you admire them and treat them well; discipline – the true meaning is “to learn” or “to teach”.
Being schooled in three countries I had to adapt to new surroundings and ways of life, immerse myself in new cultures, learn new languages and make new friends. This upbringing moulded me into the independent person I am today who can relate to all walks of life, from janitor to CEO.
A marketing degree gave me a multitude of skills to take into the workplace and assist the companies I have worked for to grow by attracting and retaining more clients. While I was working and exchanging my time for money, I was accumulating assets that would appreciate over time. I was investing in property and using spare funds or borrowing capacity to leverage into good debt. This hobby soon became a passion, but I knew in order to succeed I needed to treat my property investing as a business.
It was a natural progression that I would in time work directly in property, and ultimately establish my own property investment business.
In our previous article, you spoke of the desire to share your life with a partner and perhaps family. How has this goal transpired?
I now manage the exchange of my time for not only money but for happiness. I have had years of exchanging my time for money, while investing the fruits of my labour as I built my property portfolio. This has allowed me to be in a position to now exchange less of my time for money. Thanks to my learnings and actions I have been able to identify with the term: “don’t work for money, have money work for you”.
What makes a successful development/investment?
When initially building your property portfolio, cash flow will be more important than capital growth. Cash flow keeps you in the market and capital growth gets you out of the market. If you cannot afford to hold the property, you will not benefit from time in the market and the capital growth. A good investment property is likely to deliver greater returns in the future, not only through capital growth but also in the form of rental returns.
In time, as your portfolio grows, you can diversify into different property types, and in different states and locations. This presents the opportunity to accumulate assets that are more for cash flow or for capital growth, therefore assisting you to purchase, hold and accumulate more wealth over time.
What should consumers/investors be looking for when they are considering investing in an apartment building or house?
Be far more cautious when buying off-the-plan. What are the current and future market fundamentals that are going to drive your returns in terms of yield and capital growth? What is the right property type to buy in that market now and not only for future rentability but also for future sale? It’s important to surround yourself with a team of professionals, including property managers.
Would you consider investing in property internationally?
Yes, but before considering investing internationally, it’s wise to take the path most travelled and learn how to invest well locally first. Always look to minimise risk to assist in maximising returns. I am one for diversification, and Australia offers this across the country. Australia is not one property market, and owning property in Sydney and Perth is a more expansive portfolio than doing so in Sydney and Auckland.
What factors have had the biggest impact on the industry in the past year?
Access to credit, interest rates, federal and state grants, stalled international immigration and the other implications of COVID-19. Australians are re-evaluating where they want to live and what type of property they want to live in, with the trend of more flexible work arrangements being sped up by the pandemic. There is now more interest in regional areas, beachside towns and states offering better affordability and lifestyle.
What advice would you have given an 18yo Edward if the opportunity arose?
Build as big an asset base of appreciating assets as quickly and as safely as you can. Learn the benefits of compound interest. Pay down debt as quickly as possible to multiply the effect of reducing debt and equity gains.