Investor In Focus - Grant Philipp
For Grant Philipp, much of his success as a property investor has come from thinking outside the box. His journey to accumulating a portfolio of over 12 commercial and residential properties started nearly 15 years ago, and in the process, it has set him on the path to business success.
Grant started out in the business world back when the dot-com boom was in full flight. At the time he ran a tech company and has heavily involved investing in the stock market. As the lustre of tech quickly faded, Grant used that opportunity to begin investing in properties around Sydney in a bid to create a portfolio that would set him up for life.
Over a number of years, Grant purchased a mix of properties all around Sydney, that included three commercial properties, two in the city, one in North Sydney, and then nine residential properties. Sydney property was a lot more affordable back in the early 2000s than it is today, however, there were still a few smart ways Grant was able to identify undervalued opportunities in good locations.
With the commercial properties, Grant put a lot of weight in finding locations that were close to the CBD and that produced strong yields.
“I've been pretty fortunate. All of the properties have seen a healthy return on investment. Most of the commercial properties are virtually paid off or I don’t have a lot of debt on them at all. They were all within 10 km of the CBD. That was always the methodology to be close to transport, close to the CBD.”
When looking at residential properties, Grant aimed to look for good areas and to purchase the ‘ugly duckling’. Properties that could see an uplift in value with a quick renovation, but still have great amenities at their doorstep.
“I used the same methodology for the residential ones as well, I purchased them and just renovated the kitchens and bathrooms and so obviously that was always the selling point when people would always think about moving in. So I’ve never had more than a week where a space has been vacant since I’ve had them.”
“The residential properties I bought were all sub-300K. So I was just targeting the cheapest two- bedder 10 km from the city, that I knew I could capitalise on. So by the time I’d put a new kitchen and bathroom into it, I was making returns that were just as high as properties that were selling for 20% higher than mine.”
Along the way, it wasn't all smooth sailing for Grant. On the back of a commodity and resource boom, interest rates rose sharply around 2008 and that certainly put some pressure on the strategy that Grant was employing.
“When interest rates hit 9% things started to get a bit tight, but fortunately, the interest rates started to plummet again. So it puts it back into a true negative-giving proposition where obviously the model was working.”
Grant ultimately went on to sell his tech company and work with Regus, who is one of the biggest operators in the service offices and shared office space.
The move was a natural fit for Grant who had already had some experience in commercial property. After a meeting with an associate, Grant was inspired to look to establish his own business, assisting owners of commercial spaces to set up shared and co-working spaces and serviced offices then ultimately acting as a platform for tenants and owners.
For new and inspiring investors, Grant suggests that like all good investors, keep a long-term perspective.
“Think outside the box. If you want to get a solid return, there is no such thing as a quick investment and a quick buck. I would be sticking close to the CBD and to water rather than out in the suburbs and investing in the ugly duckling that has some upside after doing a basic renovation. Avoid grass and turf and gardens because of the maintenance requirements. Stick to strata properties and do your due diligence yourself.”
“Make it very liveable and you’ll have a great investment for life.”