Investor In Focus: Premek Borek
It was the early success that Premek Borek had in property, renovating his family home, that made him realise the power that property investment could generate.
When he finally turned 40, Premek started to ask himself what the future held for him and his family and he wanted to make sure he lived comfortably in retirement. That’s when he embarked on his goal of building wealth through property.
“I always enjoyed working with houses. So, I remember when we bought our first house, back in 2009, and the house needed a bit of work. We always knew we wouldn’t be living there forever so we did some renovating, thinking that we’ll definitely sell it one day. Four years later we actually sold that property with a tidy profit.”
Premek used some of the money from those early gains to purchase a block of land in Europe and felt like he was on the right track, but he ultimately had bigger aspirations.
“I thought to myself, ‘Oh well, I’ve got an investment property already and I’m building a new house. So, at the time, I kind of felt comfortable with that.”
Premek didn’t want to purely become a ‘buy and hold’ investor. He felt that he would ultimately run into issues, particularly around cashflow. So, he wanted to continue to build his property portfolio, but use strategies that would enhance his overall returns. Basically, Premek was looking for more active ways to manufacture equity within his property portfolio.
At that time, Premek was based in Canberra but had a particular interest in the Brisbane property market, a location where he had also lived for a number of years. He felt that it would hold up better than say Sydney and Melbourne, which had recently been experiencing outsized returns in the short-term.
Throughout his journey in property, Premek had spent a considerable amount of time educating himself on all the factors that drive property growth. He had a clear idea of the types of things he was searching for.
However, given the fact that he was interstate and time poor, Premek engaged Buyer’s Agent Melinda Jennison, from Streamline Property Buyers in Brisbane to help him identify the ideal opportunity.
“I knew exactly what I wanted, so I think it was pretty straightforward for Melinda to basically tick all the boxes. What was important for me was that the property had to be a positive cashflow property. I didn’t want to spend my own money to hold it. The second factor, it had to be in a good growth area. And the third one, I wanted to have the ability to develop that property in the future, if I wanted to. So, fortunately, the buyers agent managed to tick all of the boxes.”
Using a buyers agent was an important step for Premek as it opened up a lot of new areas and opportunities that he wouldn't have been able to access on his own.
“I now live on the south side of Brisbane and the property we bought is actually on the north side. This was an area that we had never really looked at. But once I started looking at numbers in terms of capital growth and the Government spending, the local infrastructure being developed, etc, it just made sense. Otherwise, I wouldn’t have had the knowledge.”
The real win that Premek had on the initial purchase of the property was that the buyers agent helped him to buy it below market value, giving him an immediate lift in equity from day one after settlement. Despite the property being a neat and tidy low set brick and tile home on a larger than average sized block of land, with future upside development potential, the purchase price was below the median value for the suburb. From there he now has had the opportunity to go on and add further value by giving the property a cosmetic renovation, which added more immediate value and also gave the rental yield a strong boost.
Given the success Premek has had early in his career, he is looking to continue to do this type of strategy going forward and move away from the traditional buy and hold method of property investing.
“With a buy and hold strategy, you almost have to wait and just keep watching what’s happening. And as the markets go up and down, you never know when the right time to sell or buy might be. Whereas if you do a sub-division or splitter or something like this, it’s something that is happening right now. So you can do it in three, four, five, six months time while you still know what’s happening in the market in that period of time.”
For new investors, Premek suggests getting educated then look to get started straight away.
“Just educate yourself because that’s very important. You can buy anything, whatever’s available in the market, but if you don’t do your own research, it could be a big mistake. And if you don’t have the time to do it, just get a professional to do it for you. At the end of the day, it’s not a big cost.”
“Networking is important as well. There’s just so many people that have done similar things before and you just don’t have to reinvent the wheel. Just talk to people. And most of the time they’re just happy to help out and share.”