Investor In Focus - Lily Chong
In less than 10 years, Lily Chong has put together a portfolio of investment properties spanning Australia, Malaysia and Hong Kong.
Born in a small town in East Malaysia, Lily went on to spend five years in Perth studying. She then moved to Hong Kong to work for one of the richest men on the globe and after a very successful stint as an expat in China, Lily was fortunate enough to own her first home at 25 and be in a position where she was able to retire at the age of 35.
However, around that time, she witnessed firsthand how the tables can turn, when the Hong Kong stock market, shed roughly 80% of its value during the height of the GFC. Many people in Hong Kong own shares and it is a huge talking point within the community, but no one can really control the swings.
That fall made Lily rethink her retirement decision and she set about creating an effective strategy to put her money to work and allow her to live the lifestyle she wanted for the rest of her life. That’s what ultimately led her focus towards property investment.
Lily decided that the best way to get involved in property was to immerse herself in as much information as she could.
“I went to more than 100 seminars before I started my career in real estate, as I sincerely wanted to learn and find the secret to achieve financial freedom through property investment. “
However, finding the property education space severely lacking, she felt that the best way to truly understand the industry was to actually work within it, so she came out of retirement in a bid to become the best investor she could be.
Initially, she sought information from friends and family but then quickly realised that their advice was often not that beneficial, as they all advised her to sell the property she has been holding for more than 10-years when it didn’t see any growth.
“I bought the property for $1.75m, then sold it for $1.38m after 10 years. The second year after I sold it, the value had gone up to $2.9m. If I had held that property it would now be worth $5.8m, this was indeed an expensive lesson.”
“Early on I listened to the wrong advice, every friend and family member who I talked to at that time, told me, I should sell the property as there had been no growth for the last 10 years. They didn’t see that there would be any growth in the future, and it would be too much of a hassle to hold the property when I moved to Perth.”
From that point onward, Lily decided to only focus on buying properties that she could ultimately hold for the long-term and only sell when she was well and truly ready to retire. She went about purchasing homes all around Australia, with a large focus on identifying neutrally geared or positively geared properties that would allow her to build up the size of her portfolio while keeping holding costs low.
One of the key hallmarks of Lily’s investment strategy is to identify properties that are in areas that are likely to see significant capital growth via Government investment. This could be through, new infrastructure projects or re-zoning or planning changes to transform particular suburbs.
A recent example has been an investment Lily made in Crest Burswood, which is in the heart of the new entertainment precinct in Perth.
“The Crest is well located in Perth and within the entertainment precinct that features Crown Casino, Perth Stadium, Belmont Racecourse, State Tennis Centre and Victoria Park cafe strip all within easy reach. With the Burswood train station and bus station, less than a minute walk away, 7 minutes train ride to the CBD, direct bus to the domestic and international airport.”
As an investor, Crest also produced a strong yield, which helped cover the holding costs making it an enticing proposition.
“With such low strata fees and a high rental yield, the holding cost for this development has been a bonus. Most of our rental yields are sitting at above 4.5% gross, which is impressive in this current market.”
Lily’s advice to new investors is to seek good advice and be prepared to hold for the long term.
“Residential property is a low-risk investment that consistently produces high returns over the long term, this is not a get-rich-quick scheme, you need to buy and hold.”
“When you buy your first property, you might stress with the holding costs, but after you’ve bought up to 10, 11, 12…etc, you don’t actually feel the pressure at all, with the right attitude, you can easily hold it through good or bad markets.”
“I suggest you always seek professional advice from experienced and successful property investors, not your friends/relatives who have never invested themselves.”