{"id":14222,"date":"2017-10-20T07:00:09","date_gmt":"2017-10-19T20:00:09","guid":{"rendered":"http:\/\/www.realestatetalk.com.au\/?p=14222"},"modified":"2017-10-20T07:00:09","modified_gmt":"2017-10-19T20:00:09","slug":"investing-in-inexpensive-property","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/investing-in-inexpensive-property\/","title":{"rendered":"Investing In Inexpensive Property"},"content":{"rendered":"

A job at a bowling alley led young investor Crystal Palmer into the world of real estate and renovating. After gaining some experience and learning under mentors, she struck out on her own and 14 years later has made more than 15 profitable investments.<\/strong>
\nA job at a bowling alley led young investor <\/em>Crystal Palmer<\/strong> into the world of real estate and renovating. After gaining some experience and learning under mentors, she struck out on her own and 14 years later has made more than 15 profitable investments<\/em>
\nFifteen years ago, when she was just 19, Crystal Palmer had one conversation she likely never expected would change her life.
\n\u201cI was working in a bowling alley at the time. I got talking to a regular league bowler who had a few negatively geared properties, and he wanted to move away from that strategy into positive cash flow investments,\u201d she says.
\nCrystal hadn\u2019t been interested in real estate up until that point, but as their talk went on she found herself drawn in. She made the decision soon after to form
\na company with her new friend, through which they purchased cheap houses for the purpose of renovating and leasing.
\n\u201cBy the time I was 23, I had learnt a lot and built on my investing knowledge, so I decided to part ways from the company. By then my boyfriend at the time was also interested in getting involved in property investing, so we decided to buy our first investment together in late 2006,\u201d Crystal\u00a0explains.
\n\"\"
\nProperty as a bond<\/strong>
\nOver the next five years, Crystal and her then-boyfriend took on full-time jobs and used their savings to fund the purchase of several properties. They renovated the properties during their annual leave from work, and then rented them out.
\n\u201cA standard renovation for us consisted of taking two weeks\u2019 annual leave, sleeping in the house on a mattress on the floor, and renovating it 14-plus hours per day at the same time,\u201d Crystal says.
\n\u201cIt is emotionally and mentally draining and physically exhausting at times, working to tough time frames and then having to go back to full-time work the day after you return. They can also consist of long drives out to the properties \u2013 for us, it took up to seven hours to get to certain locations!\u201d
\nCrystal and her boyfriend split up in 2011, but they continued to invest together.
\n\u201cAlthough we parted ways, we shared the same financial goals, skill set and purchasing power between us,\u201d Crystal explains. Together, they bought a total of 16 properties.
\nIn the latter half of 2014, Crystal moved to the north coast of NSW for work. She met her current partner the following year, and in 2016 the couple purchased their \ufb01rst property together in Banora Point: a three-bedroom, two-bathroom house.
\nAt the same time, Crystal bought another two properties in her own name. One was a house that was under the hammer.
\n\u201cAt initial review, I thought the house would be over our price range \u2013 my first thought was that it would sell for between $120,000 and $150,000. I called the agent for a chat and explained that we were serious buyers, as I wasn\u2019t going to drive five hours for a property that didn\u2019t hit the numbers,\u201d she says.
\n\u201cIt was a mortgagee in possession sale. I showed up on auction day and was the only one who did! I let the house get passed in so I could negotiate outside of auction terms, and it was passed in at $75,000!
\nTOP BUYING TIPS<\/strong>
\n1. Do your research on your insurance policies and compare who offers what, and what is important to you to cover, such as loss of rent, malicious damage, or accidental damage by tenants. Every company offers different benefits, limits and excesses.
\n2. Shop around for a managing agent that works for you and has your best interests at heart. Set your expectations, ask plenty of questions as to what they would do in certain circumstances, and ensure they are great communicators. Not selecting the right property manager can cost you money and time.
\n3. Pick up the phone and make a call about a house, any house that catches your interest. You would be surprised at the information agents disclose, which in turn can assist you in negotiating the sale!
\n4. Be prepared that something at some stage will unexpectedly go wrong with your property. You must have funds set aside to be able to make these repairs at any time.
\n5. Where you can, look to do the work yourself when it comes to repairs and maintenance. Paying call-out fees and for labour eats into your profit.
\n\u201cI put an offer in of $70,000 subject to building and pest. The building report came back with [word of] water damage, and we were able to negotiate the price down by another $8,000 to $62,000.\u201d
\nCrystal proceeded to renovate a few key areas, including the kitchen, before promptly leasing the property out for $300 a week.
\nBuy cheap with high returns<\/strong>
\nIn her property investment career, Crystal has stuck to a basic strategy of \u201cbuy, renovate (if required), rent and hold\u201d, with capital gain being a plus.
\n\u201cIn 99% of instances, I look for property priced under $150,000, allowing more funds for more future purchases,\u201d she says.<\/p>\n

\u201cI look for property priced under $150,000, allowing more funds for more future purchases\u201d<\/em><\/strong><\/h3>\n

\u201cI\u2019m on RealEstate.com and Domain.com every day to see what is out there and at what price. Potential purchases must meet a minimum of 13% rental yield and, after basic renovations, create an instant $50,000 worth of value on top of the renovation expenses.\u201d
\nThis tactic has allowed Crystal to save more money, enabling her to add to her portfolio. Her aim is to purchase one or two properties every year, and she focuses on freeing up as much cash as possible each time she makes a purchase.
\n\u201cUtilising interest-only loan options, [and] finding a good accountant who can maximise your rental deductions, has been key to my success,\u201d she says.
\n\u201cI\u2019ve also learnt to renovate to the level that will achieve maximum rent at minimal cost. If the numbers don\u2019t hit it, forget about it and find another property. You will find another property that hits the figures you are after.\u201d
\nThe location of a property is important, Crystal adds, but it must be weighed up against its potential in terms of value, the strength of the rental market, risks within the area and long-term capital growth.
\nWork less, live more<\/strong>
\nFor Crystal, property investment is about creating freedom to focus on herself \u2013 on her own targets, strategy and end goal. She considers her property venture her ticket to cutting back on the time she needs to spend at the office.
\n\u201cThe cash flow from the properties will allow me to reduce working hours and assist in funding an early retirement,\u201d she says.
\nCrystal doesn\u2019t seem far from her goal, as she currently has a net worth of $1.5m from her 18 properties \u2013 a goal she has achieved despite the fact that at times she has let deals slip past her.
\n\u201cDon\u2019t procrastinate! It\u2019s one thing to do your research on property investing, and it\u2019s another thing to throw yourself into it,\u201d she says.
\n\u201cIf you are unsure, start with something low-risk; something at the lower end of the price scale where you can\u2019t really lose much on the purchase price if something goes wrong.\u201d<\/p>\n

CRYSTAL’S PORTFOLIO<\/strong><\/h3>\n

\"\"
\n\"\"
\n\"\"<\/p>\n

*Rates, insurance and property management fee plus interest<\/em><\/p>\n

For more articles like this, visit\u00a0www.yourinvestmentpropertymag.com.au<\/a>
\nOriginally published as: http:\/\/www.yourinvestmentpropertymag.com.au\/success-stories\/investing-in-inexpensive-property-240675.aspx<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A job at a bowling alley led young investor Crystal Palmer into the world of real estate and renovating. After gaining some experience and learning under mentors, she struck out on her own and 14 years later has made more than 15 profitable investments. 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