Property investor Michael Nikolovski has seen a childhood fascination with Lego evolve into university degrees in construction management and architecture, jobs in the building industry, his own residential building company and a portfolio worth around $15 million.
“My first job after university was with Burbank Group, one of the biggest Melbourne-based builders, and within the first year of employment in 2006 I had purchased a house and land package — now 15 years on and I am about to settle on my 18th property,” Mr Nikolovski said.
Born and bred in Geelong, the 39-year-old founder of boutique building outfit build2grow has been a firm advocate of the old adage that it’s wise to spend where you earn.
With the notable exception of a commercial property in south west Melbourne suburb Altona, his prolific property buying and selling has all taken place in Geelong and the nearby Surf Coast Shire that is home to the fabled Great Ocean Road.
Instead of location, the diversification has centred on the types of properties he has targeted, which includes houses, units and townhouses.
“I am always looking for a property with a twist,” he said.
“Whether it’s buying in stage one of a development, that is an early stage title of land that will title in 12 months-plus, or a house or block that can be subdivided or approved immediately to add instant value.”
His self-discipline, focus and acumen has led to a property portfolio with a total value of $15 million, including 10 that he still holds with varying degrees of debt.
The sacrifices of his early years have paid a rich dividend.
“At university, a lot of my friends had full-time jobs and a lot of disposable income while I was working part-time at a bottle shop and also rendering two days a week and full-time over the holidays, to try and get ahead,” Mr Nikolovski said.
Value-add strategy
Being a builder offers obvious advantages in identifying market opportunities and understanding regulatory requirements and the costs involved in redeveloping, renovating and subdividing.
“Location is always the key to buying in the best place possible that I can afford but I’ve also spent countless hours researching to find the right one, and it takes hard work and patience to find the best deal at the right time,” Mr Nikolovski said.
“My strategy has always been to buy, add as much value to the property as possible by developing, building, renovating and subdividing, and moving on to a bigger or better property deal by selling, if required, the property I felt would generate the least yield.”
Mr Nikolovski said other planks of his strategy included buying directly from the land developer as early as possible, looking through the internet to find a unique opportunity such as a deceased estate, the worst property on a good street, or a small house on a large block that could be subdivided.
But even builders recognise the need to delegate.
“I always let the experts do their job, whether engaging the services of an accountant, conveyancer, property manager, you need a team you can trust that is clear about your goals and expectations,” he said.
Commercial dalliance
Altona, just 13 kilometres from Melbourne’s CBD, is best known for its petrochemical plant, the now defunct Toyota plant, and former Prime Minister Julia Gillard making it home in 2010 (although she now lives in Adelaide).
It’s now also home to Mr Nikolovski’s first venture into commercial property.
An off-the-plan purchase, the move into commercial property was driven by the area's access to the freeway and the site’s particular advantages.
“It’s a fully gated community of factories and with 80 per cent of them owner occupied, it gave me a sense of confidence that it would be secure and a high-quality development with good co-tenants as neighbours,” Mr Nikolovski said.
“I’m looking to diversify from residential and more into commercial, as well as moving into investments in other states or regions of Victoria,” he said.
The ultimate goal is to have 10 properties fully paid off, allowing Mr Nikolovski, and his wife and three sons, to live off the rental income.
“This may mean that I will need to increase my property portfolio to as many as 20 properties and sell and pay off the ones that are the least likely to increase in value.”
With huge ongoing demand, the lowest interest rates in history, supply shortages brought about by COVID’s impact on construction, with the additional support of local and federal government stimulus packages, Mr Nikolovski said there were still opportunities aplenty for investors.
“For anyone thinking of getting into the property market, the key factor is to get educated, and I’m not talking about university.
“I have been taking property and self-development courses since I was 18 and still try to attend one or two every year.
“This has been the secret to my success, which seems quite simple but takes discipline and time.”
And are there any thoughts of retirement?
“I don’t think I will be retiring anytime soon because I enjoy what I do.
“My dad is approaching 70 and still works full-time — he’s been with Ford Motor Company for 47 years in research and development.
“I can’t retire before him!”
