Seasoned property investor takes emotion out of real estate

With 30 years of real estate investment experience under his belt and a streamlined portfolio across three states, Michael Rogers offers three key nuggets of advice for those wanting to build a property portfolio.

Property investors Michael Rogers (L) and Scott Gillespie.
Property investors Michael Rogers (L) and husband Scott Gillespie have bought and sold many properties over several decades and now have three properties in three states. (Image source: Michael Rogers/API Magazine)

Get a handle on your emotions, find the right property manager and be ready to move when the right investment arises.

These are the three fundamental truths learnt by seasoned Sydney property investor Michael Rogers.

Being ready to act when buying the right property becomes available is a key strategy for Sydney resident Michael Rogers, 55, who’s been pipped at the investment post on several occasions, even once losing out on a property due to an email he’d sent just seconds too late.

While his current property portfolio is down to a house, apartment and townhouse in metropolitan Sydney, Melbourne, and Queensland respectively, he’s spent the last 30 years traversing the real estate learning curve.

From my first property many years ago I learned to appreciate the urgency around investing, that if you think it’s the one, you have to move, so now if I find something I get moving on it straight away, Mr Rogers said.

The last property I bought was a house in Melbourne and it was officially off-the-plan because it was completed but they didn’t have the occupancy certificate yet.

I got an email about it at 9am one morning, and my husband Scott and I had our expression of interest in by 11.30am.

For that particular one I contacted the person selling it and she’d only notified a small group of investors, telling me there were eight other interested parties looking at it.

I asked if anyone had their EOI (expression of interest) in, and she said not yet, so when ours was sent she said great it’s yours and that was three years ago, and I’ve never been to the property, but it was one of those things; I’d been to the area, I knew the site, I knew the developer, it came up, I knew it was fantastic, and I had to move fast.

The emotion of property investing

Investing can be an emotional rollercoaster and you don’t always get what you wish for.

Like all valuable lessons, his first property purchased at age 26, was not the top choice because he’d already missed the boat on several before it.

The property he bought was a two-bed unit in the Lower North Shore suburb of Lane Cove on Landers Road,17 minutes by car from Sydney’s CBD, and a suburb which in the last three months has seen median house prices of $3 million increase $130,000.

It was 1994 and the official interest rate that year had jumped from 4.75 to 7.5 per cent, with the standard variable rate also ballooning from 8.75 to 10.5 per cent.

While putting the interest rate worries of today’s market in the shade, 30 years ago the unit cost Mr Rogers just $169,000. CoreLogic has shown those three decades saw Sydney property values increase 449 per cent, and is now valued above $800,000.

We had a city property recently that we’d sold and we drove past it on the weekend and thought, you know what, if we’d held it, the value would have gone up but we needed to sell it at the time, so we did, and yes, it’s value has gone up but since then there’s also been a lot of development in that area so its seen a dramatic increase in supply and I guess we feel fortunate enough to have sold at the right time.

"We have no regrets, he said.

The emotional rollercoaster ride, however, can still surprise him, after first experiencing it on the Landers Road unit.

Probably the biggest thing I learned when buying that unit was don’t get too attached to a property when you’re looking to buy, because you may not get it, and I’d missed out on a few and at that age, I was devastated because I was certain I was going to get them, he said.

I don’t think you ever get over auctions because many years later my husband and I were buying a house, and you go to these auctions and you think oh yes, I’m going to get it, and then the shock when someone gazumps you, you’re just left wondering, how does this happen?

I do feel very fortunate, however, that I was able to get into the Sydney market at that young age and at that time, and it’s helped me with an owner occupier property but also through the equity to help with other investment properties, he said.

Young people should not give up on property

Mr Rogers also feels for buyers entering the market today but encourages them to not give up hope.

When he started, his family were the main support network but none were real estate professionals, just interested in the property market, and they inspired him to take the plunge.

I suppose the key advice I would give now to anyone investing in property is use professionals, not your mate or a friend at a barbecue, he said.

He also recommends looking further afield than your own backyard.

Some people might just give up and think they won’t ever get a property in the area they live in but it’s important to not just look in your own backyard, and I think so many people just look where they grew up or where they live now but that’s one of the biggest mistakes people can make, he said.

They might see a flat across the road that’s come on the market and think they’ll go and buy it, but look across Australia for what you can afford.

That also means being aware of all the associated expenses, like stamp duty, when you’re buying and knowing the ongoing expenses, such as the property manager and maintenance costs.

For Mr Rogers, taking care of tenants is key especially if they’re good and looking for long-term accommodation.

I feel it’s the responsibility of the owner to have a good property manager because they’re representing you.

I had a property that had a lot of issues, and it was vital to me to have necessary repairs made but the property manager I had at the time just wasn’t attending to them, so if you’re not sure who to have manage your property, maybe ask the professional who helped you buy it about a referral, he said.

Property for the long term

There are certain rules Mr Rogers follows including not buying property just to flip it or buying property to renovate.

It just too difficult and too risky to do that so I only buy new and off-the-plan and part of that is for taxation purposes, he said.

Buying off-the-plan can mean there’s more tax depreciation available on new properties, which means maximising benefits and improving after-tax cash flow, however, professional financial advice should be sought.

Mr Rogers has also purchased one investment property in a self-managed super fund (SMSF).

There are some incredible advantages in buying through an SMSF, he said.

The Australian Taxation Office says it’s important to get advice from a licensed financial advisor on SMSFs, but they must have an Australian financial services (AFS) licence.

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