Investors In Focus - Adrian and Kartika Poermandya
Adrian and Kartika Poermandya weren't discouraged by early challenges with their property investment portfolio but persevered until they found the right strategy, team and properties to suit their needs.
Despite setbacks faced in their early days, residential property investors Adrian and Kartika Poermandya persisted and now own a diversified portfolio set to help them reach early retirement goals. Having immigrated from Indonesia to Australia in 2002, the couple knew they had to do something to build wealth, but hadn’t yet landed on the right mix. Inspired by Robert Kiyosaki’s book, Rich Dad, Poor Dad, Adrian read that to achieve financial freedom it was necessary to become an investor. Not long afterwards, he attended a property investment seminar and realised that was how his dreams could become a reality.
At first, Adrian and Kartika retained their former Indonesian home, which they rented out until they became citizens here in 2005. But when it came time to make their foray into property investment, their lack of experience had unfortunate consequences. Still fairly new to Australia - and with limited networks - they went into partnership with a builder friend who’d found a house in Melbourne’s Forest Hill set for renovation.
“Putting faith in a friend didn’t work,” says Adrian, “We didn’t make any money.”
The only one to come out of the project with any funds was their friend, who’d been paid for the time he spent on the construction side of the project. “It was a real lesson,” says Adrian.
Undeterred, Adrian and Kartika tried again. Their next investment was a two bedroom Glen Huntly apartment which they bought during the first release stage of the off-the-plan project. Problems arose when the developer went bankrupt, sparking issues with occupancy permits and the entire building not being finished as planned. While the apartment has always been cash flow positive, it’s never achieved the promised capital gains the couple had hoped and has just been sold to help with other investments.
It took buying yet another disappointing property for the couple to realise they needed professional help. This time around it was a house in Mill Park with a steady tenant in place for over a decade. “We thought good well, it’s close to home and we can come and collect the money, but two years later they wanted to move out,” Adrian says.
Ultimately, they turned the property into student housing - successful in the early days, but when the fifth tenant moved in complaints from the neighbours put an end to the pursuit. Adrian and Kartika took the property to market with very little profit, a consequence of turning it into a five-bedroom house that was hard to sell.
Where most people would have given up on real estate by now, Adrian says they still knew it was the right path ahead, but they couldn’t do it on their own. They had a short break from investing, upgraded their own residential needs as their children grew older, and then swung back into action.
“Initially we had no strategy and it was all trial and error,” Adrian says. “But after meeting [property portfolio consultant] Christine Williams, we developed a more defined strategy to add different locations, use professionals and have a team.”
Understandably tentative after their previous investment experiences, Adrian and Kartika undertook much due diligence to ensure Christine was the right person to work with, before embarking on another purchase.
“We don’t want to have to worry about money,” Adrian says. “We have a 10-year retirement goal so we want to do it quickly now.”
Having just signed up for their fourth residential investment, Adrian and Kartika are now well on the way to achieving that goal. Their first property purchase this time around was a duplex on the Sunshine Coast that’s gone up in value by at least $100k in three years. They’ve also bought a 1 bedroom apartment off-the-plan through Adrian’s self-managed superannuation fund to give it a much-needed boost, then purchased house and land packages in Geelong and Bendigo.
With the latter three properties yet to complete, indicative rental appraisals show that the Poermandya’s portfolio will be cash flow positive. Adrian says that he now has a goal that he can look forward to achieving - a far cry from the early days of unsuccessful DIY investing. They aim to buy one more property to shore up their early retirement plans and look forward to being further along in their journey.
Admitting that their best decision has been to build a team, Adrian says this is a must for new investors. “But also trust your gut,” he adds. “Do you want to work with that person or not? There are lots of people out there and you need to do your due diligence.”
It’s essential to find your goal and know why you want to invest, Adrian says. He stresses the need to start early and take action. “Property investment uses time to increase in value. Talk to property specialists and get more information to build your knowledge.”