At 28, Tony Fleming already has an impressive 14 properties under his belt. Even more impressive – Tony, spent 10 years delivering Domino’s pizza to help him pay off and invest in property.
We sat down with Tony to learn more about why and how he got into property investing, his investing strategy and his top savings tips for budding property investors.
1. Why property investing?
I’ve always liked that property investing is a tangible asset, something that you can touch compared to shares which is a number on a screen or paper. As well as a physical asset it can be improved upon through renovations/subdivision and developments. So it just provides you with more options on improving your assets compared to shares and term deposits.
2. How did you get started in property investment?
I was studying Certificate 4 in Real Estate Services at Tafe. Some of the teachers were property investors so I heard their stories of success, mistakes and the profit they were making. Been a young and impressionable kid I wanted to achieve similar success, so I started borrowing every property investment book at the Tafe and the local library. From there I started looking to see if there was a pattern that I could replicate in the market at the time.
3. How many properties do you now own and where are they located?
I have 14 properties located in Kingswood, St Marys, Lavington (NSW), Elizabeth/Salisbury region SA.
4. Why these locations?
The original two western Sydney properties were bought first as it fit my budget but I soon began realising that properties only 21km closer to the city were selling for $100,000 more in the same if not worse condition. I saw that over time people would be pushed further out of the city and that these properties would eventually rise in value.
After my first five I wanted to increase my cashflow and start focus on debt recycling to lower my PPOR loan. I headed to Albury, NSW largest inland regional centre. It was very low buy in place with strong yields. It also has a number of infrastructure projects in the pipeline that will help in the medium to long term. From there I would renovate extract equity and move onto the next property.
My final purchases were in Northern Adelaide. Once again I was targeting properties for cash flow and short to medium term growth. As Adelaide is at a different stage in the property cycle I thought I would take advantage of that. The area I have been investing in Playford City Council has a number of large infrastructure projects as well as been the largest growing City Council in SA.
5. What are your loan structures and why are these structured this way?
I have a mix of Interest Only (IO) loans and Principal & Interest (P&I) all with offset accounts. The interest only loans allowed me to borrow more and keep my cash flow designated to paying down non deductible debt first. The principal and interest is focused on my PPOR and an investment property I plan to keep long term.
This is for paying down non deductible debt first and to start lowering my debt levels on an IP I want to keep long term.
6. What do you look for when buying a property?
The first things I look at are Infrastructure projects. Currently happening or planned, decide whether they will help boost population, house growth, job growth, tenant quality or the reputation of the area.
Location, location and location. The old real estate saying that will never die. There is a reason it will never die and that is that it is one of the most important aspects of reselling or getting tenants in. Locations close to shops, public transport, schools and job hubs will always rent and sell quicker.
I look at current and past history of vacancy rates. This is one of the most important aspects if you are a buy and hold investor. Looking at current and past rates you can determine whether your proposed purchase will rent quickly or run the risk of it sitting vacant.
7. What is your investment strategy to help you get to your next purchase?
I’m a big believer in doing cosmetic renovation work to boost rent and tenant quality as well as creating some sweat equity. From there using that equity as a deposit for the next property and repeat the process again.
8. Managing a large property portfolio seems daunting, how much effort is involved in managing a property portfolio?
It can be very time consuming even with property managers in place. It sometimes feels like running a business, to be a successful investor you need to be active and knowledgable about everything that is going on. It can be very rewarding knowing the ins and outs of all your properties in your portfolio but it does take some work.
9. What is your long-term goal?
It’s crazy to say but my goals are always changing as the market changes. After I got my first IP I didn’t think I would ever want to get a second investment property. Fast forward to now and I have fourteen. The personal goal will always be to have a large portfolio unencumbered by debt but a career goal would be to help thousands of people begin their journey into property.
10. What are your top savings tips?
With saving it is important to create a budget and review your budget weekly to make sure you are sticking to it. Don’t make it too strict, it’s important to still enjoy your current lifestyle just maybe cut down on things you can do without. I always had goals that if I saved X amount of dollars in a month than I could reward myself with X amount of money as a reward.
11. Where are two areas worth looking at to get into the market?
Playford City Council in SA. It is a cheaper buy in price and strong yields however you do have to be very careful with the area you pick. It is one of the fastest growing LGA in the state and has a large number of infrastructure projects happening.
The Blue Mountains has seen some strong growth through the ripple effect from Sydney. As well as the traditional retirees heading to the mountains for a tree change a lot of first home buyers outpriced by the Sydney market are being forced to buy in the Blue Mountains. With the Western Sydney airport, various infrastructure projects and Greater Western Sydney
Tony now runs his own buyers agency to offer expert advice for other hopeful investors looking to kickstart their own portfolio. Learn more here.