Investor In Focus - Jack Henderson
Jack Henderson began his property-investing journey as an 18-year-old and now boasts an impressive portfolio of blue-chip properties spread across Sydney and New South Wales.
However, Jack’s journey to property success was not an easy one. After leaving school at 16, he quickly realised that if he was to grow his wealth in a meaningful way, he needed to look for a different path forward than taking the traditional 9-5 approach.
After accepting a job in the mining sector, it quickly became apparent that he needed a better strategy.
“After I started working, I essentially realised that I was never going to make a lot of money being an employee and I had to do something with the money I was earning at a young age to give me a leg up.”
“Most people think you need a university degree and a good education to get anywhere in life. But essentially what got me started in property is that I backed myself into a corner when I left school.”
After deciding that property was going to be the way to achieve his financial goals, Jack managed to purchase his first property while still living at home.
“What got me started was the idea everyone should buy their own home in Australia. So it wasn’t necessarily for me to be a property investor as such. It was just to buy my first property, which happened to be an investment because I was still living at home.”
While Jack started off in property by doing his own research and educating himself it was a chance relationship, with buyers agent Chris Gray that helped him develop his current investment strategy.
“The strategy was very much a replica of Chris’s in a way, focussing on blue-chip, close to CBDs. He mentored me through that first part. So every question I had I bounced off him. What do you think about this? What are your thoughts on this? So in terms of strategy, it was very much a replica of what Chris was doing.”
Since his first purchase as an 18-year-old, Jack has built a portfolio of blue-chip properties that is currently worth more than $3 million. His focus continues to be about buying in the very best locations that you can afford with the aim of achieving strong capital growth.
“The days are long gone of where you can buy 10, 20, 30 properties with a normal income using low doc and no doc loans. That is just not achievable in today's landscape and it doesn’t look like it’s going to change. So buying two, three, four properties over a 20 or 30 year period in very, very good quality locations that have had 20 years of past performance is a lot safer bet.”
For Jack, one of the biggest challenges has been trying to build up his portfolio in the current lending environment. So he’s started to look at other creative ways to grow his assets.
“Something we’ve started doing is joint ventures. My belief is that if you only have $300,000, it’s better to go 50/50 with someone and buy a $600,000 or $700,000 property because generally that property’s going to be in a better quality location and therefore it’s going to be a better quality asset.”
“So joint ventures, if done right and all the legalities and all the rest of it are done properly, can be quite beneficial. But there’s obviously pros and cons to that.”
One of the key elements of Jack’s strategy is buying blue-chip properties in Australia’s leading markets such as Sydney. And there’s a good reason why according to Jack.
“The way I see property moving is it’s going to be very similar to America with some very high priced markets and then all the rest.
"With artificial intelligence and automation moving into our ecosystems, a lot of the blue and white-collar jobs are going to start getting replaced over time.”
“We’re at the lowest income growth in history and moving forward if jobs are starting to get replaced, our income growth is not going to increase.”
“So if we’re at the lowest income growth and the average Australian household income is, say, $120,000, these people are going to get to a point where they’re not going to be able to borrow any more money.
"This means where these people live and are buying, there’s not going to be price growth because to have price growth people need to be able to borrow more money eventually.”
“So moving forward, now more than ever it’s very, very important to be as close as you possibly can to affluence and to people who control their own income.
"I think it’s a very safe bet to have a million-dollar apartment or a $700,000 apartment next to a home that’s worth seven, eight, nine, ten million dollars because that shows people who own those homes control their own income now.”
In the future, Jack’s goal is to continue to build up his total assets by buying in blue-chip locations that will likely outperform in the long run.
“I’m not really fussed on how many properties I have, regardless if it’s two or ten. The biggest thing for me is quality and net assets.”
Current LVR: 80%