Making More Money Through Property Than In A Full Time Job
For Jazz Sidana, making the move into property investing could not have been any clearer. Two years after purchasing his first block of land, Jazz came to the realisation that he had made more money on his first property investment then he had working his 40-hour a week job.
It was a light bulb moment for Jazz, which has now changed his life for the better. “I’m spending these hours at work and this thing on the side has just given me a 40K profit, which is almost my net salary for the year after tax. Why don’t I study this space a little bit more closely and see what I can do,” thought Jazz?
From that moment onward, Jazz made the pledge to himself that he was going to put his full attention into building a property portfolio that would set him up for life.
Fast forward 10 years and Jazz now owns seven properties in a portfolio spread across the country. With four in Victoria, two in Queensland and one in Adelaide.
However, when Jazz first started out in property he, like many young people, was simply looking for a home for his family.
“The journey started when I was looking for a place to live in. I was renting at the time and being an immature investor didn’t know much about property. I just bought a block of land to build my own house in Narre Warren. That was for roughly about $170,000. I had it for almost two years and I made about $40,000 profit on it back in 2007 / 2008.”
After his early success, Jazz decided that he needed to understand property and all the factors that drove markets. So before making any further investments, he spent a few years educating himself all on areas of property investment.
The investment strategy Jazz chose, was to focus on suburbs and areas that had growth potential. Suburbs that were close to infrastructure and transport. With good schools and facilities nearby. He also wanted to purchase properties with a large land component to capture as much growth as possible.
“We bought a decent-sized block of land with a house on it in Berwick, in 2008 for $287,000 and today that’s probably worth today roughly $630,000. It was a decent-sized block with a smallish house, two bedrooms, good living area and a big backyard.”
Given where the property cycle was at the time, Jazz was able to initially focus his attention on suburbs in Melbourne. One of his best investments came in 2013 when he purchased a property in Frankston.
“The property cycle was just getting started in 2013, so I bought a property in Frankston at the bottom of the cycle and the clock was just starting to kick in at the time. Frankston is surrounded by suburbs, which are pretty expensive, like Mount Eliza and Chelsea. The rental yields at the time when I bought it in 2013 were still pretty good. You could get an easy three and a half to four per cent yield, which means I didn’t have to put in a lot of money out of my own pocket.”
“At the time I bought it for $340,000. Right now it’s worth somewhere between $580,000 to $620,000.”
His early property purchases all achieved excellent growth, but as his portfolio grew and the cycle began to slow, Jazz needed to start changing his focus and looking at different areas. Given the strong returns in Victoria and NSW in recent years, finding good value and affordable investments has become tougher.
“These days the strategy is to find suburbs which still have got growth potential and decent rental yield. You cannot find that anymore in Victoria and New South Wales. So the strategy in this market has changed to go looking in other areas, which for me is Brisbane and Adelaide.”
Jazz has just settled on a property in Queensland and it ticked a lot of boxes and offers development potential down the track. “My most recent purchase is in the Moreton Bay area in Queensland. If I knock the house down today, the council allows me to go five storeys high.”
Jazz has been able to build up a portfolio of properties carefully over the space of a decade. His ultimate goal is to hold $10 million worth of properties in areas primed for further growth.
His advice to new investors is simple - educate yourself before getting started. “Go study your market, understand where growth comes from. Ask questions like, has it got any infrastructure projects coming up? Have you already got enough infrastructure in place? Is it dependent on one critical industry, or multiple industries? You don’t want to be in the mining sector. Is it close to water or close to a university or a train station?”
Jazz also recommends that you surround yourself with people who can help you with your journey.
“Get yourself a good investment-savvy accountant, a good mortgage broker and some good real estate agent contacts who you can ring when you’ve got a property. Have good property managers in place who you can actually call and just find out, “Hey, what do you think it’s going to rent for?”
“I’ve got a couple of properties in the Narre Warren and Berwick area, so I know the agents over there. I’ll just bounce ideas off them and they’ll tell me straight away, “You know what? This is probably going to rent for this much. It will probably sell for this much. You could do some renovations or add a bathroom and it will probably go up in value.”