Rentvestor In Focus -Jo Yates

Her father’s redundancy was the wake-up call Jo Yates needed to see the lack of financial security from paid employment, prompting her to seek financial freedom through property investment. Unwittingly becoming an early adopter of ‘rentvesting’ - long before the now commonly used phrase was coined - Jo and her partner Ben Adams bought their first investment property in Sydney’s western suburbs, unable to afford their preferred area of Bondi. Seven years later they’ve developed a cash positive portfolio that’s set them up for an independent retirement - and helped leverage them in to that much-longed for Bondi home of their own.

Originally from the United Kingdom, Jo had spent 12 months backpacking around Australia after she left university, quickly falling in love with the outdoor lifestyle, not to mention the weather! After an unhappy year back home, she eventually convinced Ben to move here on a permanent basis, with plans to get into property investment as soon as they received permanent residency status.

Without the counsel of trusted family and friends behind them, once the couple were able to purchase they chose to work with a buyers agent for their first investment.

Priced out of Bondi, they were recommended Sydney’s western suburbs as being affordable and exhibiting all the signs of potential long-term positive growth.

“We learnt a lot from our buyers agent on that first purchase,” said Jo.

Heading into property investment with the goal to buy as cheaply as possible, renovate to add value then use increased equity to purchase again, Jo and Ben bought a three bedroom house in Erskine Park on a 600 square metre block of land.

To help get them started, they were able to tap into the First Home Owners Grant (then $7000, which covered the buyers agent’s fees) and commenced on their first ever renovation. The couple then used the skills and insights they’d gained from the experience to purchase another two properties within the same area.

And while helping fund a renovation by a credit card may seem too high risk for some, Jo was comfortable she’d struck the right strategy to finance works on their second property, enabling them to keep moving ahead at their desired pace. Having experienced her own financial duress by racking up a store card debt aged 18, Jo knew that she never wanted to put anything that decreased in value on credit again, but she wouldn’t be deterred from using them to her advantage.

“I did loads of research and learnt how to use them whilst minimising risk,” she says.

By putting all the expenses on one card, Jo then rolled them over to a new card with a 0% interest rate balance transfer for nine months. Confident they’d be able to clear the card within that period of time - it was just the step Jo needed to fulfil the project, playing a vital part in the end result.

After the couple pocketed $80k from the sale of a principal place of residence in western Sydney they started to look further afield and purchased two more investments in Queensland. Looking at the current market, however, Jo admits to having regrets as the latter have failed to perform as strongly as expected.

“In hindsight, we should have kept that one but as we wanted to move closer to the city so it was the right choice at the time.”

Now holding the original two properties in western Sydney and two in Brisbane, Jo says they’d planned to ultimately sell two and hold on to two, but have recently changed tack. “They’re not costing us anything to hold, so we’ll keep them.”

Of the two year period between deciding to get into property investment and waiting for the permanent residency that would enable them to buy, Jo now sees it as a blessing in disguise. She researched and read every book and magazine on property she could find, soaking in the knowledge essential for every investor.

“It set us up by making us take the time to learn,” she says.

Watching their portfolio rise in value, Jo and Ben’s major AHA moment occurred when the naysayers who’d been against their decision to “go west” started coming to them for investment advice. The negativity they’d experienced all those years ago is now one of the biggest mistakes Jo warns people against making - that you shouldn’t buy an investment with your emotions involved. Pre-existing concepts about Sydney’s western suburbs had stopped those in their circle from purchasing in that area - missing out on capital gains.

Jo says by taking the emotions out of it, purchasing the right investment comes down to the numbers and must be a business decision. She also advises people to be prepared once they’ve made the decision to buy, rather than missing out on an opportunity because you can’t arrange finance in time. A good team is also a must, especially an accountant who’s not only across property, but able to look at what’s essential to your own individual asset protection (the couple moved from freelancing to setting up a company to protect their properties against any issues that might arise from their business ).

With the aim to further build their portfolio long-term, Jo and Ben are about to press pause on further investment purchases as they embark on an owner-occupier renovation of their new Bondi apartment. By tapping into their investment skills, they were finally able to purchase where they wanted to live, buying a property in need of renovation that they knew was ideally situated and a good buy.

“We knew our limits and Ben was able to bid with confidence at the auction,” Jo says.