Investor In Focus: Edward Reavy
Gifted a London studio apartment for his 21 st birthday, an early inheritance from Edward Reavy’s father came with a challenge: spend it, or learn how to become a landlord and create wealth. Where some young people may have been tempted to take the money and run, Edward chose the latter. Offering an early glimpse of the freedom granted by independent wealth, his apartment’s rental income funded a year’s worth of international travel once he finished university.
Eventually moving to Sydney, Edward has since invested the proceeds from his UK apartment sale into an Australian property portfolio, turning his passion for bricks and mortar into a career.
Edward’s first property purchase in Australia was an owner-occupied apartment in Sydney’s Breakfast Point. Bought in 2008, it was a matter of being in the right place at the right time. When it doubled in value within just five years, Edward had one of his biggest AHA moments yet.
“There was no way I could save that kind of money in five years in a 9 to 5 job,” he says.
Demonstrating for Edward the power of property, this achievement had been in no way intentional but awoke him to the “lazy equity” his property had amassed in a relatively short period of time. Realising he wanted to further leverage off the apartment’s potential, Edward knew the next biggest challenge he’d have to overcome would be his own lack of awareness surrounding the property market.
Guided by the principle that formal education will make you a living while self-education will make you a fortune, he commenced his journey. Edward read books, took courses, joined mentoring groups - building up a network of like-minded, positive people who were themselves steering towards independent wealth.
(Left: Edward pictured above with his Mother. Center: existing property purchase, Thornton NSW. Right: new property purchase, Thornton NSW.)
“If I was the cleverest person in the room, I was in the wrong room,” he says.
Inspired by his own father’s financial freedom, he’s been working towards an investment goal that will provide plenty of time to spend with his own family in the future. Edward, however, is the first to admit that his worst investment has been his single focus on wealth creation, which at times came at the cost of his relationships - something he’s now working hard to rectify.
“Family, friends and a partner will help me achieve this, and if I do not include them in the journey, the destination will have no point or meaning,” he says.
Moving out of his Breakfast Point apartment in 2016, Edward turned it into an investment property and has added five other properties into his portfolio throughout New South Wales and Queensland. Each investment has been purchased with a buy and hold strategy for the long-term, offering cash flow to keep him in the market and capital growth that will one day get him back out again.
Edward's current portfolio
While he acknowledges his good fortune in getting a leg up, Edward’s subsequent investments were all bought on what was at the time a very modest wage in sports and events marketing. Mindful to purchase in areas before the ripple starts up signalling the next market cycle, he aims to keep buying as much as he can, as quickly and as safely as possible.
Minimising risk is critical for Edward who never hesitates to use professional advice, aware that it could be more costly long-term to adopt a Do-It-Yourself approach. He’s also wary of falling for the cheapest deal, whether that be service, interest rate or through an advisor, knowing it may not necessarily be the best step to take.
Diversification is essential, Edward says, noting that property isn’t the only way to create wealth and that shares should also be considered. Investors must assess whether old or new property will be more favourable to their portfolios in terms of depreciation. As an investor, it is crucial to minimise land tax obligations by structuring ownership correctly.
Apart from having the foresight to hold on to his London apartment when his father laid down the gauntlet on his 21 st birthday, Edward says his best investment decision was to educate himself.
“Without making that conscious decision and paying people to help me, I wouldn’t be in the position I am in now, not to mention those who have held my hand, helped encourage and motivate me along the way.... If it was easy, everyone would be doing it!”