Unconventional approach providing profits for borderless investor

Terry Lollback has swapped sharemarket trading for property investment and it’s paying dividends, with a $3 million-plus portfolio replacing his income and setting him on a pathway to financial freedom.

At first glance, a global pandemic, thousands of people suddenly losing their jobs and a country plunging into recession does not appear to be optimal conditions to add to a residential property portfolio.

But for Queensland-based Terry Lollback, the COVID-19 crisis hasn’t been any impediment to bolstering his.

Mr Lollback, a keen martial artist who works in the disability employment sector by day, has acquired seven properties since the pandemic began, swelling his portfolio, which he conservatively values at more than $3 million, to 15 properties across three states.

“What I’ve noticed during COVID, is that there are a lot of deals to be had,” Mr Lollback told Australian Property Investor Magazine.

“And in certain regional areas you can definitely get very good deals.

“If you can’t buy in your home city then look elsewhere - there are many markets in the property industry.”

Mr Lollback’s strategy is somewhat of an unconventional approach - he targets properties valued under the median house price in regional towns such as Whyalla and Port Augusta in South Australia, upgrades them to be attractive to tenants, and rents them to low-income individuals and families.

“Investing in regional areas, it’s about what you pay,” he said. “If you can get in cheaply, it’s going to give you a good return, but if you pay too much, that’s when you can lose on it. 

“I like to look at the worst case scenario as well. In a lot of these regional areas I think ‘how much lower can this go’? 

“There are a lot of problems in regional areas, for example if you wanted to liquidate quickly and sell, that can be a problem. 

“But if you don’t want to sell and you want to use it for rental income, it’s pretty good.”

While some may find his approach to be a risky strategy, Mr Lollback said he mitigates risk by analysing and understanding the market in which he is investing.

“We know our market is people who are going to be on Centrelink,” he said. 

“It’s good, if you know that you are providing housing for certain socio-economic classes.

“I’m the chair of the Property Investors Council of Australia in Queensland, and a number of our members are struggling right now because they have had to make new rental arrangements with their tenants.

“But I’m not struggling at all, my guys are going great, because for the majority of our properties, we have got renters who are on Centrelink. 

“But I knew that, that’s why I bought those properties.

“It’s when people don’t know their market, they might buy a duplex or something like that, and they get angry that they’re renting it out to lower socio-economic classes. 

“That’s when problems happen. But if you understand that, your strategy will work.”

Mr Lollback said key factors he considers when buying a property, other than the purchase price, include the area’s key industries and employment levels, housing supply and the depth of its rental market.

He also spends a lot of time researching what the holding and maintenance costs would be, with council rates and water rates key factors in deciding whether to purchase.

“A big part of my philosophy is you have to look after your tenants and you have to look after the bank,” Mr Lollback said.

“It’s got to be liveable and there has got to be standards there that will allow you to get a better class of tenant. 

“You can buy something that’s just completely dodgy, but then you’re going to have problems. 

“But if you do some light renovations inside, you will get loyal tenants.

“If you look after your tenants, they will repay you, and that repayment, generally, is the fact that they will look after your property.”

Also included in Mr Lollback’s portfolio are a pair of rural assets, a 200-acre property about an hour outside of Adelaide, which was one of his first investments, and an acreage in northern New South Wales near Glen Innes, where he plans to establish a persimmon farm.

“It’s important that your asset gives you a return,” he said.

Prior to getting involved in real estate, Mr Lollback invested heavily in the sharemarket, a wealth-building strategy that was derailed by the Asian financial crisis and a divorce.

He said while share trading would always be his passion, he had been persuaded to invest in property by his new wife, whose family is heavily involved in the property sector in her native Philippines.

But his first property investment, a house and land package in the Philippines in 2012, wasn’t all smooth sailing. 

“I did everything wrong with this,” Mr Lollback said.

“I bought off the plan, in a new estate, bought it offshore and the interest rates were locked in with the developer. 

“Although I purchased it, I really didn’t have a strategy in place and it was just a house that we wanted to someday spend some time in. 

“Although it was initially a mistake, it has now gone up five times in value and it has paid off handsomely.”

But rather than being deterred by his initial stumble, Mr Lollback said he developed his clear and disciplined investment strategy, focusing on cash-flow rather than capital growth.

“This strategy might not be for everyone but for me it was simply, get property that makes you money now,” he said.

“This means it has to provide good cash flow and look after itself while still making money. 

“Growth is important too, but to simply try to aim for growth is akin to speculating, and you certainly don’t want to overpay for a property if that is the case.”