In today’s show we catch up with a young WA property investor who started her portfolio when she was 18 and has grown it to be worth in excess of $2M today. Nadia Hana tells us about her journey, the lessons along the way and what she has to say to any young investor wanting to follow her lead.
Kevin: I had the pleasure recently of having a chat to my next guest, Nadia Hana from Western Australia. I did that on behalf of Australian Property Investor magazine. I was so impressed I wanted to share her views with you. Nadia, from a very young age, started investing.
I believe it was about 18, Nadia. Is that correct?
Nadia: Yes. That’s correct.
Kevin: Wow. That is amazing. Tell me, what spurred that interest in property at such a young age?
Nadia: I come from a family who has been involved in either property investment or developing for many years. My grandfather in the UK was investing there and passed that on to my mother and father. They’ve done – as I said – development then and renovation or flipping houses, as well.
It was something from a young age that I was around, and property often found out its way around the table, something probably I was interested in more than my sister. From a young age, I’ve always been very keen on running my own business, and I would like to think I’ve had a very business-oriented mindset.
I enjoy coordination and planning, and I found that around about 16, my folks started giving me books on property, whether it was at birthdays or Christmases. I found myself reading those and having a keen interest to understand more, and perhaps that would be the avenue that I would take in starting my own business.
Kevin: Just give us all a bit of an idea about the size of your current portfolio.
Nadia: Currently, I have a property in Gladstone. I’ve had that since 2011. I purchased my first property when I was 18. Actually, last Friday, I had handover. Essentially, what I did with that property is subdivide and develop into a quad development, and now currently have five properties, which was my goal – five properties by the age of 25.
Kevin: My reading about what you’ve done is that your portfolio of five properties is worth in excess of $2 million. That’s really quite outstanding. Tell me, do you have a mentor? Who helps you make your investment decisions?
Nadia: I didn’t get to where I am today without the support around me. My father was definitely the key mentor to guiding me to looking into the area that I purchased my first property in and understanding the value in property investing. My mother also has been a great influence, and more recently my partner, as well.
I probably haven’t had one specific mentor. I think it’s important to talk to various different people, and obviously, you need to be careful what information you act on, but if you try to collate as much as you can, essentially, that will make you in a position where you can make more of an informed decision.
Kevin: You’re obviously not afraid to buy out of the area in which you live. I think you mentioned one property in Gladstone. That’s Gladstone in Queensland.
Nadia: Yes, that’s correct.
Kevin: That’s the other side of the country from where you are now. How do you go about choosing your properties?
Nadia: To be honest, in terms of a formula, I haven’t had a set formula to date, but there are a couple of key criteria that I look for in identifying a property. Essentially, for me, my preference is to buy a property that either has an opportunity for not just capital growth but either renovation or development. I think that land is where the value is essentially.
With all of the properties I’ve looked at, I’ve given them a few different boxes to tick, and one of them is being whether there’s infrastructure in place and adequate schooling and support or revenue that’s going to be going into that community to increase potentially the rental growth or sales.
Then also looking at buying a house at the lower end of the scale, so not something that’s elaborate, something that to some extent would look rundown, that I’ve got an opportunity to either develop or renovate.
Kevin: Now, you mentioned earlier that you’ve completed your first development. You’ve just had handover of that I believe. Tell me a little bit more about that. Was that the game plan when you first purchased that property?
Nadia: No. When I first purchased that property, I rented that property out. It was a 1138 square meter corner block. It had the zoning in place to potentially subdivide, but at that point in time, to be honest, I knew nothing about subdivision or development.
It was something that my father threw around as “You know you could do that down the track,” but I said, “One step at a time. For now I’ll manage this property myself.” I did do that, which was a learning opportunity for me in understanding contractually the relationship between you, an owner, and the tenants.
Once I had rented that out for a couple of years and I secured myself a good job within the oil and gas industry, I had found myself starting to look at what are the options here? I did dabble in renovating that house, but I started to see growth within the area, and that was what we had identified in our feasibility studies anyway – that the infrastructure was going to be significantly improved and growth and schooling. Essentially, quite a few people in the area were starting to put in applications anyway for subdivision.
I looked at as an opportunity and began what was at least a year of just extensive research – reading books, going on forums, talking to people, studying the West Australian Planning Commission information, and understanding all the ins and outs of what would be required in order to subdivide or essentially develop.
Kevin: We can always learn from other people’s mistakes, and I guess that’s the best way to learn, provided we do learn. Can you share one or two with us that maybe we can learn from? Things that you say, “Well, if I had my time again I probably wouldn’t do it that way”? What were those?
Nadia: If I had my time again, the biggest one is I would definitely allow myself an additional buffer of funds. At the point in time with the development, going through getting two to three quotes for each contractor, I put a spreadsheet in place, I knew the amount of funds that was required, but I definitely underestimated the amount.
I found myself being about $20,000 to $30,000 short, and so that essentially went from a three-year plan of subdividing through to development to four and a half years. It has been a long process.
If I was to do this again, I would always make sure I’ve got 20%, 30%, whatever you can do just to have that additional buffer for any unforeseen events or circumstances that might occur.
Kevin: That’s great advice, actually. Tell me about the risks now. Have there been any risks that you’ve taken over these years that you’re really glad that you did take?
Nadia: Yes. I was trying to think the other day, is it easy to invest and to do this development, because I do think that there are other young people, investors, out there who could definitely follow the same footsteps and do this if they set their mind to it.
Essentially, there have been quite a few challenges and risks that I have had to take. I’ve banked about 80% to 90% at times of my wage to the subdivision and development where I have had a subdivision into an offset account on the property. I had my wage put straight into there and allowed myself very little funds for the four weeks, which essentially is my four-week wage.
There was that element. I sold my car and took public transport, which was a bit of an adjustment at the time. I sacrificed a lot of various things as well – friend’s weddings and events throughout the course of the year.
Kevin: Nadia, where do you plan to be in say 10 to 15 years’ time? I know that you’ve reached this goal of five properties. What’s ahead for you?
Nadia: I definitely want to keep investing and looking towards either renovations or developments. I haven’t set a goal yet for 30 or beyond. I’m sure I will because I like to set higher goals and essentially try to achieve them. This one has been quite challenging, but I’m sure there are so many lessons learned that will make the choices slightly easier moving forward.
My partner and I are keen to invest together, and it’s something that he’s started to be part of the process and really added value to where I am today, so I can see us definitely continuing.
I suppose from a work perspective, I do work in the oil and gas industry at the moment and thoroughly enjoy my job. I’ve got a brilliant job there. But essentially, my passion is in property investing and development, so I’d like to see some form of opportunity down the track and see myself whether it’s owning my own business or working in an advisory or mentoring capacity.
Kevin: Whatever it is that you choose to undertake, Nadia, I know it’s going to be a success. It’s been a delight talking to you – very, very inspirational. I wish you every success in the future. Thank you so much for your time.
Nadia: No problem. Thanks very much, Kevin.