About Me

A little about me…

My name is Emma; I’m a 28 year old Project Manager from Melbourne, Australia. I have been working in the construction industry for nearly 3 years and specialise in hospital and education projects; however, I have experience working in the residential sector as well, and this is where my career in construction, like so many others, began.

My passion for building things started from a young age when I received my first Lego set. I never really got into the space shuttles or the pirate ships; instead, I loved the “Paradisa” and “Town” sets where I had the opportunity to build houses, petrol stations, fire departments, etc. In fact, my whole bedroom floor became a town at one stage, and every Lego citizen had a name and a story of their own.

As I got older and outgrew my Lego set, I found something new to “play” with – namely, Sim City. I used to spend hours creating new cities and trying to think of clever ways to ensure my city was always profitable.

After finishing my first degree in Legal Studies (Minor in English), I decided it was time to join the real world. I got my first full time job working in real estate as a personal assistant; I lasted 6 months. Unfortunately, my love of sales was not nearly as strong as my love of real estate/construction; however, I did realise in that moment that my calling in life was not to sell real estate but to build it. At this time I didn’t know what my options were, in fact I didn’t even know there was a degree for the kind of thing I wanted to do, but after a lot of research and talking to the right people, I enrolled in a Bachelor of Construction Management. I ended up completing the 4-year degree in 3 years with honours, which just goes to prove that when I’m passionate about something I’ll do anything to achieve my goals.

Currently I’m working on $140m+ hospital redevelopments and education projects and have recently purchased my first property.  The road to purchasing my first property has been a long one. Taking the first step is always the hardest, but sometimes you need to throw yourself in the deep end to see if you can swim. In my case, I have spent the best part of 12 months ensuring I could! Education in this respect was the best pair of floaties I’ll ever buy.

The reason I started this blog is to share my experiences and what I’ve learnt with you, the reader, as I go through the journey of accumulating property. I know that there are plenty of websites out there that give people information on investing, but what I believe sets my blog apart from the others is that I am sharing my experience and what I’ve learnt with you as I progress. This is information that you can actually implement and apply to your own circumstances. A lot of investing sites/books/seminars etc that I have been to, and read, over the last 12 months are very general in the information they provide, they don’t give you the tools to go out there and actually make it happen. Wanting to invest and wanting to be successful in property is one thing, actually doing it is another. That is why I started this blog, to give people information they can actually USE.

I understand that everyone’s circumstances are different (yes, this is the disclaimer); how you choose to use this information is entirely up to you. I will say this though; no one is going to do it for you. You need to make the decision to take action.

Remember, it’s not what you know, it’s what you do that counts.

Emma

P.S – Feel free to contact me any time via facebook, twitter or email: emma@mypropertyjourney.com

205 responses on “About Me”

  1. Hey Emma,

    Great stuff and well done on your achievements so far!

    I am also looking at studying a bachelor of Construction management next year!
    How did you find the degree? I’m currently employed as a graphic designer and need out! Property and construction I feel is something I have always been interested in, but unfortunately, like yourself i didn’t realise something of this nature existed – hopefully being 23 I still have some time on my side to make the switch!

    Good luck with all your future investing!

    Matt.

    • Hi Matt,

      Apologies for not getting back to you sooner. I found out about the Construction Management Degree through NAWIC (National Association of Women In Construction). I studied at Deakin University in Geelong but there are also degrees available at Melbourne Uni and RMIT in Victoria. Where in Australia are you from?

      I started my Construction Management Degree at 23, like you I wondered if I was too “old” to start over again. Trust me when I say it was the best decision I ever made. You only get one shot at life, do something you love!!

      If you need anymore advice or would like to discuss more about the degree, feel free to drop me an email – ezc@deakin.edu.au

      Let me know how you go!

      Emma

  2. As Anthony Robbins once said, “It’s not what you know; it’s what you do that counts.”

    if you follow this fraud you are a fool

    and by the way, there are other investment alternatives besides property.

    but, i guess you will learn from your embarrassing mistakes

    • HI jfk,

      I don’t actually follow Anthony Robbins, I’ve never been to one of his seminars, I just liked the qoute.

      As for alternative’s, I am looking into shares this year to diversify my portfolio.

      P.S – I don’t think any mistakes are embarrassing if you learn and grow from them. We all make mistakes, in the end we are only human, even you, I’m sure.

      Emma

  3. The only thing you have “accumulated” is debt.

    The days of having the younger generation fund your early retirement are over. It is time for everyone to work and save for their own retirement. The way it should be.

      • Hi Emma,

        Any wealth achieved via property is not achieved via your own efforts. It is achieved via the efforts of those younger families who purchase the property at a higher price. They are the ones who will be working longer hours to pay off the mortgage.

        I hope you now understand the distinction between saving and investing.

        Either way, interest rates will not go much lower than this. This means the 40 year debt super-cycle and free lunches for property investors is nearing an end.

      • hi fred
        unless you’re stuffing your savings under the mattress, you’re also an investor. what do u think banks do with your savings?
        they invest it to generate returns. that’s using other people. unfortunately this world requires we work with people to progress, whether that be financial gain or whatever

      • Guy was 2 months in arrears…CBA sold him up…lost about $150k on house auction…hung himself. Had a painting business….had money owing to him…left wife and 3 kids.
        Here is a happy home own who had his house sold from under on a rising market ????
        The only reason paper’s push RE is because RE agents are the biggest advertisers. Do a through search before you put a noose around your neck.
        Sign up for a free daily edition of Money Morning.com.au

      • FROM MONEY MORNING 6 MARCH
        At least that’s what I reckon the people sitting next to me on Saturday night were thinking.

        To be fair, my social skills weren’t at their sharpest. My wife has just had a beautiful baby girl. After two weeks of sleepless nights, this was my first outing into the world. So I was a bit rusty.

        Of course, as an immensely proud father, I was beaming about the latest addition to the clan. I have a ’10-photo rule’ in this situation. I probably have 2000 photos of my kids on my iPhone. Apart from my family – and that includes our two year old who navigates the iPhone better than me – no one wants to see them. So … after 10 photos, that phone goes back in my pocket. And that’s ‘the 10-photo rule’.

        So after a selection of cute pictures, in my exhausted state my conversation fell back to default mode – resources and mining.

        Note to self: Most sensible people don’t want to hear about how tight the short-term fundamentals of the copper market are. At least not on a Saturday night!

        When the people sitting around me gave me that ‘I don’t give a rodent’s rectum about Chinese copper inventory levels’ look, I thought hmmm … maybe it’s time to switch to a more inclusive topic: Aussie property.

        Turns out, everyone at the dinner party had a view on the Australian property market. And they were fighting to be heard. I was happy to have a chance to catch my breath and sip on my first beer in a fortnight. But after listening to five minutes of an ‘Australian property will go up forever’ chorus, I bludgeoned my way into the conversation…

        No Gas Left in the Tank

        It seems almost no Australian property owner wants to hear anything negative about the property market – even if it is the truth.

        So when I started throwing about a few iffy statistics I’d had my eye on, I felt about as welcome as a fart in a spacesuit.

        Do you think they wanted to hear that annual housing credit growth is at a 35-year low?

        Not particularly.

        But it is.

        Housing credit is the ‘gas’ that inflated the property bubble. As investors and home buyers take out more loans, it facilitates property demand, which leads to higher prices. A month ago, annual housing credit had fallen to a record low of 5.4% year on year. Last week, this fell again to set a new 35-year low of 5.3% year-on-year growth.

        The result? At best – housing holds its ground. At worst, gravity finally catches up with the property market in earnest, and we see it fall significantly as it has in every other Western property market.

        Housing credit is the lifeblood of rising property prices. Housing credit growth levels spent most of the last 20 years in the double digits. With levels of only 5.3% year-on-year growth today, it is impossible to see property prices staying at their ‘laws-of-physics-defying’ high levels.

        We have also just got news that new homes sales in Australia crashed by a record monthly fall of 7.3% in January. The monthly fall in new sales was not a one off, and is part of a trend. Multi-unit sales have been smashed 25.1% if you compare sales over the last three months to the same period in 2011.

        So where do we stand now?

        The chart from the Reserve Bank of Australia gives us an idea.

        Australian property prices – clearly trending down

        Source: RBA

        Property prices did actually pick up 0.8% in February, and these charts don’t show this. I’m not reading too much into this. One month’s figures are meaningless on their own, and this is likely to be just a blip. The trend is still clearly down, which suggests prices have further to fall just yet.

        The Aussie economy has just had more bad news. Data released yesterday on the Aussie retail sector, painted a bleak picture for the economy.

        The Australian services index contracted in a big way last month. Anything under 50 means the sector is shrinking – and in February it was at 46.7, plummeting down from a barely expansionary 51.9 in January. The ‘employment measure’ figure dropped from 51.2 to 47.5. Sales and new orders also fell by a similar amount.

        This matters to property owners because the retail industry directly employs around 15% of the Australian workforce, and indirectly employs far more. When such a large chunk of the Aussie workforce is starting to do it tough, you should expect a slowdown in the economy and a further fall in property prices.

    • Great point of view Fred! Maybe Emma could save on the tens of thousands she will hand the government in stamp duty, capital gains, income tax etc, and instead stash a few bucks a week under her pillow. That way, with the way inflation is heading, she will be able to dine on canned baked beans or even Puppy Pal when she eventually reaches the ripe old age of 65 (expected retirement age of our generation). Or she could work hard, sacrifice, save, contribute substantial amounts through stamp duty, capital gains, income tax etc and enjoy her retirement at an age she can?

      Its survival of the fittest Fred! Anyway, I won’t take up any more of your time, sounds like you could use it for some exercise?

      Regards,
      Owen

      • Hi Owen. I tend to agree with Fred, but understand your sentiments. I am close to retirement age and worked my butt off designing and building 3 houses while trying to be a full time solo mother and avoid bankruptcy after a landslide. It was available to me to ‘borrow’ the money others saved hard by grafting in offices, kitchens and bathrooms to get by, but I could see any morality attached to getting rich by borrowing others money to invest in property or shares even, and then enjoying the financial reward of in fact doing very little but spend money that was not mine.
        It is not survival of the fittest but the destruction of the ones who for eg. like myself who earned good money in the 80s, but now have to settle for part time at 14per hour. The house market was the thing that took my savings when life became a strain .. some greedy property investor was waiting in the wings to get a BARGAIN.
        It was and always is, at the cost of some hard working person who does not have the deposit or the gall to use others money to furnish their own pocket.

        Yes Emma will reach financial heights like this, and I hope the view from her many houses will be as satisfying as the one from the lesser home in a suburb back street that has been paid for by an hour to hour pay packet achieved through integrity.

        May you enjoy being in the 1 percent.
        And Emma, I wish you well and hope you put some of your gains back into society.
        Regards
        Diana

  4. Pingback: EYE ON RETIREMENT: Emma Challands | ResidualRx.com·

  5. Hi Emma,

    you’ll have people telling you property is not as good as shares and all the pitfalls. blah blah

    what I say to people is that it is not which is better it is about Diversification. Hear me out, people who build a property portfolio and have nothing else are putting all there eggs in one asset class…….if asked to put 500k into one stock most people would immediately say a big no thanks. Essentially this is what building a property portfolio on it’s own is like, yes different properties in different areas is diversification but your within the one asset class.

    Hopefully along the way you learn to build wealth and diversification is the stratergy that will provide some reduced risk behind your plan. Or you may already be doing this, keeping a portion of cash, shares, property and other assets to spread and reduce the exposure.

    Most Australian’s who own a home and just one investment property have on average well over 1 million dollars exposure to one asset class if they have failed to diversify.

    Look at the housing markets around the world for a free lesson in reducing exposure to one asset class….these people wish they had some money in cash term deposits and other assets classes to compliment their property investments.

    The 2 most powerful investment factors are time and compound interest/investments.

    Good luck, hope this helps a little

    I am not qualified just sharing my experience and how I manged to be playing golf daily at age 42 :)

    • David,

      I couldn’t agree more. It is actually one of my goals this year to invest “properly” in shares. I have, in the past, attempted to invest in shares but didn’t do my due diligence. I am hoping to change that in the near future.

      Here’s to having more time to play golf!

      EMma

    • Fred,

      You are a grumpy old man who probably hasn’t achieved anything with your life so you troll around blogs bursting ambitious people’s dreams. Get a life mate – it’s still not too late, you can still make something of yourself everyday before the end.

      Good on you Emma for putting your life and finances in your own hands and going for it. With property, it’s all about starting young and staying prudent with your finances. Don’t take our a bigger mortgage than you can handle – always run the numbers.

      In a worst case, the property market will not deteriorate as bad as the US simply because our banks are in a much stronger position and a lot less levered. They won’t start foreclosing on mortgages unless values drop 30-50% overnight, which won’t happen. I say overnight because the average Australian is paying down the mortgage so it has to happen very quickly.

      In any case, keep doing what you’re doing and don’t listen to haters like Fred.

      Chuck

    • Hi David,
      I agree with your comments.
      Just out of curiosity can you share with us your journey to where you are now? I’d like to be playing golf on a daily basis too! BTW my handicap suck. (16).
      Cheers
      Leslie

  7. Another budding developer/speculator parasite, creating “wealth” for herself and little benefit for anyone else. “…as I go through the journey of accumulating property.” ?? So parochial and shameless, it’s almost quaint. I guess the bogans will be impressed.

    • EnuffNaff,

      I find your comment that I am only creating wealth for myself quite interesting…especially since you don’t know me or what my intentions to do with said wealth are. But your opinion is your own, and you are entitled to it, however far from the mark it may be.

      Emma

    • Who do you think benefits from Emma supplying property for rent? The renters. Without property investors where would these people end up? Buying property is fine but like businesses there is so much beyond buying the property that those who never do it will never comprehend. It can be frustrating and a lot of hard work. If Emma has the skill, drive and nouse to achieve financial success through property, then shouldn’t we all be encouraging her? instead of putting her down. Google tall poppy syndrome! Go Emma!

      • Thank god for property speculators, providing overvalued homes for reluctant renters who are priced out of our grossly inflated property market.

    • Enuff Naff, as a property investor and a renter, i think it is win win. my landlord provides me with a lovely flat that’s close to work and that i can afford to live in but not buy. my investment house provides affordable rent to a young family who have not the means or inclination to buy a property of their own.
      there’s a lot of mutual benefit here. goes both ways mate. stop being such a hater and open your eyes. where would all the people live if it wasn’t for property investors? and no i don’t believe everyone has the inclination or aptitude to save a deposit, buy a home, maintain payments

    • Hi Nick,

      The road less travelled is the name of my favourite poem, I didn’t mean to imply that I am doing anything different from anyone else. However, if I compare myself to those I know, who are my age, I would say I am one of the few pursuing property investing.

      Emma

  10. Hi Emma,

    I would suggest investing in shares which statistically outperform houses in terms of investments.

    Bruce

    • Hi Bruce,

      I have bought shares in the past, albeit I was fairly uneducated when doing so. I am planning on doing my due diligence first but I am very interested in pursuing shares in the near future as a form of diversification.

      Emma

      • If you want average, low-risk results, go for diversfication. if you want above-average results, find something to become expert in (like the value of property in your target suburbs, and stick to what you know best. I agree with you on that quote from Robbins! I also commend The Zurich Axioms.

        I’ve specialised in properties just below mid-market – and so long as you take care with cashflow, It seems to be working fine so far!

        Best wishes from John in England.

    • That depends completely on the market and the level of the investor. The main limitation of shares is that they are an equity investment, which means of course zero leverage. If I have $20k, I can buy $20k worth of shares (plus fees of course, when buying and selling). But that same $20k will buy a $400k property. So as long as the financials stack up I know what I’d rather have!

      • Has shares statistically outperformed property in the last 5 years? I’m not waiting 20-50 years for my cheque baby.

      • I think Brads comments illustrate why you need to be advised by those in the know. I’m a retired stock broker and i would like to clarify that you can be leveraged in shares. There are several vehicles that allow you to leverage such as “Margin Lending” or “CFD” and even derivatives to certain point. You may not like the level of risk associated with these investment strategies however that is personal choice that you alone can make. But like any leveraged investment risk is taken.

        For example: You can purchase a blue chip stock using CFD which requires a LVR of 5%. this is a very basic example and only used to compare leveraged positions between property and stocks.

        I’m not trying to giving you advise (as i’m starting to look for properties myself), but I would like you to keep an open mind with any investment you choose and do you due diligence.

  11. Hi Emma

    Interesting comment you make about the free seminars only providing general information. I have found the same. The last one I went to was Property Tutors. They wanted $6500 to teach you how to buy the right property. I have one rental and a private home. I’m 36 and want to retire at 50. I’m hoping to buy again this year. According to Property tutors there are 10% yeild properties out there. Maybe I’m just looking in the wrong places!

    I’m in Wellington so the rental market is not as good as Auckland but I’m very resistant to investing outside of Wellington

    I’ve made some big financial mistakes over the years with property and have only just managed to pull through.

    Have you got any financial war stories?

    Rhys

    • There are no 10% yield properties when the market in NZ and Aus is as inflated as is. Prices have killed returns on rents, inevitably. ‘Property Tutors’ want to make money off you so they spin you a load of bollocks referring to imaginary figures that may or may not have been real at some point in the past. ‘Property Tutors’ said the same crap in the US 2003 – 2006. You know where there are 10% yield homes now? In the USA…post-crash.

  12. Hi Emma, your story was just published on our New Zealand website http://www.stuff.co.nz.
    I think it’s great that you have this ambition to achieve financial freedom at 40. There are far to many bludgers and doomsayers that constantly blame anyone but themselves for their situation. Your attitude towards success is a breath of fresh air. Investing in property is a little intimidating to begin with but the key to success is to do your homework and create equity with what you buy. My wife and I (32 and 28) are just doing due diligence on our 3rd property, which means the debt will jump over $1million!! but it’s all good debt, investment debt. I dont know about the australian market but ours has been a buyers market for about 18 months so we are trying to take full advantage of it. I will follow your blog and we both wish you the best of luck!

    • Brad,

      It is defintley a buyer’s market and I’m glad to hear both you and your wife are taking advantage of it! I plan on buying my second property in the next 4-6 months for just that reason.

      Do your wife and yourself renovate any of the properties or do you opt for buying under market value to create equity? Or perhaps another strategy?

      I’d be interested to hear more about your story and how you got to your 3rd property, if you don’t mind sharing.

      Emma

      • Wow it’s so amazing to see all the negative comments on here. I wonder how many of these people have ever actually done anything towards creating financial freedom. I particulary like the parasite comment, which I find terribly ironic, as becoming a property investor you are providing living solutions for those that cannot afford to purchase their own home, for whatever reason, and by taking control of your future you most denfinately will not be a parasite on the taxpayer, like so many people out there.

        As for your question, i’d rather not put it all on here for all to see, and scrutinise, but if you like I can add you on facebook? if thats ok with you?

      • Hi Emma,

        Well done on your achievement so far, and I think the advice on the Age website is very good – I would follow this eg paying off your HECS debts etc.

        Can I just say, with the benefit of many years of investment in property and shares, that in my opinion it is not a ‘buyers market’ in Australia. Prices are still sky high, affordability levels are at record lows and if you were to compare the price/earnings of a rental property in Australia to that of other countries or even the share market, you will find that there is far better value elsewhere. You are buying at the top of a bubble, just be very careful. Also, interest rates are still very high in Australia compared to the rest of the world, so you will find yourself losing money every year for 7-10 years at least before you might start to break even. Don’t bank on capital growth when making your investment decisions.

        I look forward to following your success, and wish you well on your investment journey!

        Matt

      • Buyers market? Are you people crazy??

        No offense to both of you but we are living in one of the most overvalued property markets in the world, no bubble lasts forever.

        Good luck Emma, but I think you’re starting this at completely the wrong time. I also really hope you dont end up with a ridiculous amount of debt as the housing market drops.

      • I agree with Jen – i would hold off on your plans for property investment. Very unwise. There is doomsayers…there is sprulkers….and there is objectivity and data which has been good reason for the continued negative market sentiment.

      • I couldn’t agree with Matt less.

        Rule number 1 of investing is pay off your debt in order of the highest interest rate first.

        HECS only has an interest rate linked to the rate of inflation (about 3%) much lower than your current loans. It also only has to be paid back when you are earning money, so if you go on an extended holiday or suddenly find yourself out of work it won’t effect your cash flow.

        Given the size of your current HECS taking a 5% discount now will cost you a lot more in the long run (if you don’t believe me do the financial model based on the projected pay back period).

        As a 28 year old who has already made some cash in the property market the best advise was the 3rd advise. You currently have very little accessible capital, the higher your LVR (loan value ratio) the greater cash flow pressure and exposure to the market will be. Rather than setting yourself unrealistic goals of buying 2 properties a year whilst investing in shares, instead work out a model that work for you and invest when properties arrive that meet this model.

        Good luck with it.

  13. Hi Emma

    What is your growth forecast for Melbourne property? How do you know property prices are going to stop falling? Will you be able to keep buying property if your equity is eroded by a falling property market?

    Cheers

    James

      • Good idea, are you looking in Arizona, Nevada, Florida, California? Hot-bed of cash-flow positive rentals now the market has plummeted to 50% of value (less, in some areas).

  14. Just read the article about you in The Age and thought I’d drop by to say thank-you for starting this website. I’m a 23 year old female who also lives in Melbourne and studied a similar area of interest at uni (urban development, both undergrad and now Masters), who has also ventured into the terrifying world of property investment with a one bedroom apartment in West Footscray. I often feel as though I’ve jumped into the deep end with this but your blog posts are bursting with a wealth of information: you write simply, clearly and succinctly (a refreshing change to most jargon-laden financial talk!) and, most importantly, each post serves as a reminder that this *can* indeed be done! Definitely bookmarking your website! Best of luck in the future

  15. Emma, I would suggest you do a LOT more research before you set out on a life of servitude and slavery. You would do far better and be more productive to society by starting a business rather and try to build your dreams on get quick schemes involving capital gains in the housing industry. A industry that has only a sideways movement for the next ten years at best, also look into our ageing population and how many of the retirees own 2nd properties that will need to be disposed of once they can no longer claim negative Gearing deductions.

    • Hi Mik,

      I totally agree with you, research and planning is the foundation of good decision making.

      Also, I do plan on owning and running my own business, it’s something I’ve been thinking of for quite some time now and it is definitley on my long term goal list.

      Emma

    • What line of business are you invested in Mik? I would be interested to know what your comment of servitude and slavery refers too. Expansion on that point would be appreciated. Cheers

      • Although I think you know this Brad, and are looking for a fight, he’s referring to the fact that mortgages are a long term legally-binding commitment that acts as a very large obstacle when deciding how to live one’s life. A 25-year promise to pay every month could easily be construed as financial slavery, although you’ll spin it to suit your own agenda. And good for you, but try to understand that not everyone shares your opinions.

        Also, it’s a bit rich asking people to elaborate Brad, or their business, when you yourself declined to so. Hypocrite much? I fail to see how your comments add any more or less than those of the negative doomsayers.

      • Hi Emma,

        I’m 29, work full time, live in Geelong and have paid off 50% of my house and have my own business. No way would I be telling people that basically ‘I’m going to be rich’ by following an outdated wealth creation model and putting all my eggs in one basket. What do you think is going to happen to house prices in G town when Alcoa closes, Ford decreases production, rates go up. I have collegues who bought houses less than 10 years ago for 250K that are valued currently at over 750K, this growth is not sustainable. Please investigate diversifying your options and starting a business you would be surprised at the money you can make and the satisfaction you gain from it.

      • Hi Nathan,

        Your comments are noted. I think everyone has a different strategy that works for them and it’s always great to get different perspectives. This experience is about learning after all.

        I commented previously on another post that I do have ambition to have my own business one day and shares are definitley something I am looking into this year as a form of diversification. Obviously the article is not going to capture everything and the main focus was on the fact that I see investing as a great form of wealth creation.

        Emma

  17. Hi Emma

    read your story on stuff. Interesting story. As I understand your end goal is to retire at 40 and you’ve chosen property to get there. I suppose with property investment being such a topical issue in NZ and with a lot of economist seeing property investment not being that great for NZ in terms of growing the economy globally.

    I was just wondering did you think of other investment avenue’s instead of investment property to get to your end goal? You did say construction was passion of yours so using maybe that is why you chose property? However did you look at rate of return comparing to example shares? How many properties do you think you’ll need to retire at 40 and allow you to do what??

    Reason I asked is I’m doing something similar. I had a property when I started working and then branched out and have 3 properties now and am deciding on whether to buy another or invest somewhere else.

    Sorry for the many questions and feel free to not answer them if they are personal.

    Regards
    Boun

    • Hi Boun,

      I have looked at shares but my passion is real estate.

      My initital goal was to purchase 20 properties over the next 10 years, sell half and pay out the remaining (or most of) debt. The more I learn the more my goals/strategies change. I think this will always be the case as you become exposed to different ideas and opinions.

      Ultimately it comes down to what works for you and getting the financial aspect right. In the end you can’t do anything without getting on side with the bank so you’re strategy needs to be in line with your serviceability/borrowing capacity.

      Emma

      • “you’re [sic] strategy needs to be in line with your serviceability/borrowing capacity.”

        Indeed. But it all goes to hell when the bank changes its own regs and rules (they can do that, you know) and you can’t borrow the way you used to. Pay down your loans with any returns you make month on month. Do not over-leverage or it will hurt in the long run.

  18. Hi Emma,

    Good on you for pursuing your dreams and congratulations on your achievements so far.

    It sounds like you have been very prudent with your finances.

    I’m a Director of a free property investment analytics website, http://www.myinvestmentdecision.com.au. Firstly, I think our website would be very useful for you but more importantly, we’ll love to put your blog on our website. I think you’ll be an inspiration to our young users who are following the exact same journey.

    Let me know if it’s of interest charlie@myinvestmentdecision.com.au

    Look forward to hearing from you.
    Charlie

  19. Hi, I can identify with you. I have 2 degrees but still not sure of what I really want – I would really appreciate the opportunity to subscribe to your blog. All the best.

  20. Hey Emma

    top work with making a start, i reckon that was the hardest part

    I’m doing exactly the same thing, although i seem to be looking at a bit more of an aggressive time frame, I’m 25 at the moment and will be retired by 30. My plan is 2 properties per year as a bare minimum with the goal being 1 per quarter.
    Just bought my first in Canberra as an off-plan last year, have one in Goulburn i bought in November last year currently rented for $280pw and bought for $225,000, and looking at the next two somewhere around Brisbane and the hunter valley regions within the next 6 months. I also took a while too (9 months) of pure research and study before even making my first offer but once i had the knowledge i made sure i committed and jumped right in

    It was actually quite interesting how many of my mates sent me the link to this today, i know i’ve been telling them all for the last 6 months that i’ll be retired in 5 years but i didn’t realise any of them were actually listening to what i was saying till today

    I’ll definitely be keeping track of your progress and if you ever need someone to bounce ideas off id be more than willing to help out

    Scott

    • lol omg Australia is soooo fucked! Sorry guys but hunker down, there is a shit storm coming.

      IF YOU THINK YOU CAN RETIRE IN 5 YEARS BY INVESTING MONEY THAT ISN’T EVEN YOURS, THEN YES, IT’S “TOO GOOD TO BE TRUE”!!!

      Unless you get out now, before the major pop happens. Some people did that, and they are okay. Everyone else ate the shit sandwich.

      • Dear Optimist, Pessimist and Realist,

        While you were all too busy arguing about the glass of water, i drank it.

        Sincerely
        The Opportunist

  21. Well done Emma. I wish you all the best on your journey & I am sure your passion will result in your success.
    The west is undervalued and will rise, even though the market is flat this year.
    I bought my 1st investment at 25, and now, 5 years later hubby and I have 3 properties in total. The investments, year on year have had growth of 12% PA capital gain. We will hold on to all properties for the long term, at least a few years.

  23. Hi Emma,
    Just though i drop by to say a quick hello. Like you i am a PM in IT though and i have 2 investment properties and have similar goals to you to acquire 1-2 properties over the next 10 year. Very keen to follow your journey and share any tips/advice that we may come across. :)

    Lloyd

  24. Emma,

    Have you thought of investing using your super fund i.e, as a SMSF. As the rule in relation to SMSF has changed in recent time, it would potentially be a better strategy for property investor instead of investing “post tax”.

  25. First, congratulations for pulling your fingers out, more young people should be like you.

    But speaking of young people, some of them have (1) rent to pay, (2) kids to look after, (3) car loan repayments… which somehow you don’t seem to be troubled with, but seriously get in the way of saving a deposit for a place to live in, let alone an investment property!

    Not trying to be the Grinch who stole xmas, but you know “minor details and all that”.

    • Stephen’s comments about kids etc reinforces the need for flexibility. I had a strategy to keep buying for the first decade, pay down the debts over the next decade, and then start withdrawing surplus cashflow to enjoy.
      What actually happened was new lady, kids, and perhaps the most expensive decade of my life so far. Fortunately, having the financial reserves of the property portfolio has helped us all through some stormy times. Moral of the story: make sure your strategy is flexible enough to cope with any change in your situation and your goals!

  26. Hi Emma,

    It sounds like you would have been very hard to beat at Monopoly :)
    I think aspiring to retire early, enjoying life and working hard to become income independent is a grand idea – I know because i’ve had the same goals & achieved them.

    Once you have a decent capital base to start with (reign in those costs early on!), growing it then depends on asset class selection, risk management, a big world picture & timing.

    The good news is that there’s more than one path to the summit!

    Best wishes on your endeavours,

    W

  27. Good on you Emma!
    Property is a fantastic way of creating wealth, I am amazed at all of the negative comments above! I am sure you earn a great wage and can afford to be investing in this way. I am 38 and over the past 15 years have built a portfolio worth approx. 7 million dollars from a very small base. The market has certainly changed now however with your education and understanding of redevelopment you will be well positioned to find bargains. It is often about what you pay rather than how much capital gain there is. As you know the Western Suburbs of Melbourne show fantastic opportunity to be buying at the right price and take advantage of capital gains going forward. The population of Melbourne is increasing by about 100 000 people a year right now, thats about 2000 people a week that require homes, there are not enough homes to house them, retirees selling investment properties will not even be a drop in the ocean on how many houses are required in the next 20 – 30 years.

    • It’s only worth 7m IF you can fund a buyer with 7m to spend IF he turns up sell him the Harbour Bridge as well.
      Go and talk to a few agents to find out the real price if you tried to sell to day.

  28. Emma, good initiative to get your own blog going!, nice one, all weird and wonderful people with varying degrees of experience and knowledge will be attracted to your site. Hell I might just go on a rant myself!, After all, isn’t everyone an expert on property & shares? Hell I know this system works, from experience: Just buy:

    The right property, in the right location, buy below intrinsic value, then add value, ( flip, renovate, subdivide, add rooms, split title, ) and lease/sell the end result depending on the state of the market and your cash position ( debt v yield v growth) Repeat x25 times =$5m in cash in 10 years. Research x3 months per property ( part time 10 hours per week) 50 open homes, and 50 auctions attended before purchasing each property..And you will know exactly what something will be worth….instantly. You will be able to pounce on any DDD property’s that are quoted from agents, that will phone you. ( death, divorce or desperate) see professionals for tax, ownership ( lawyers) but don’t take their advice to seriously, they are just the people behind the scenes that keep the cogs oiled.

    Quit your day job, ( once you have 2 places or so…ideally after your first) don’t worry about your student debt, just get a small LOC and make informed decisions… the rest is history. And people stay out of university, universities have private shareholders half the time. P.S and after all is said and done, give something back.

  29. Way to go Emma. My wife and I are planning to purchase our second IP within the next 6 mths and we are still learning as we go. We think its great what you are doing with this blog. Will be following.

    Matt

  30. I read the article containing your profile on SMH.
    One adviser suggested an offset account. I think their maths was a little out. You benefit from earning interest at the same rate you are borrowing at (loan interest is usually higher than deposit interest), but because the interest received is taxable and the interest paid is deductible (assumed), then there is not a tax pick-up in the same way that there is when using an offset account on a non-deductible interest loan (like one for your own home).
    One of the other advisers made a very good point about principal place of residence. If you bought your own home and moved into it, then it is your principal place of residence for CGT even if you move out (up to 6 years from moving out). Of course if you did this all just for tax reasons then you are likely to fail in a challenge from the ATO. See … http://www.ato.gov.au/individuals/content.aspx?doc=/content/36887.htm
    But also consider that interest on a loan is only tax deductible if the purpose of the borrowing was for income producing. You may not get the interest as tax deductible if you originally borrowed to buy a property as your principal place of residence and then subsequently rent it out at a later date. However it seems many people do this without tax problems. Just an uncertain area of law.
    I’d say get a couple of hours with a good adviser.

    Good luck and focus on cashflow. That way positive cashflow from your properties will fund the deposit for the next one without the need for equity withdrawals and relying on a rising property market. And be careful of interest rate risk. You may not remember the high double digit interest of the eighties. Hopefully it will never return.

  31. Goodluck emma, but looking at your financials (from the article), I think you are a little over zealous. Maybe – if you live In a cardboard box, eat cat food and don’t mate the other cat, you might just do it.
    Property is dead. Mik is spot on – the baby boomers own the majority of property in this country. They are about to start dying and all that property will start to be put on the market. Simple supply and demand scenario.
    You would be much wiser putting your $ in the share market. And yes you can gear it too and yes you can invest in the property market through it too. Get a good broker or just buy the whole market through ETF’s.
    Good luck!

  32. Hi Emma,

    First of all , well done on your first property! It’s by far the hardest one to get, but easily the most rewarding.

    My husband (33) and I (28) also have similar goals to you, and are well on track to retiring by the age of 40. We have 12 properties at the moment (all in the ACT), which we have purchased through hard and smart investing – with no help from either sets of parents.

    I purchased my first place when I turned 18 (owned it outright when I was 22), and my biggest regret to date its waiting another 5 years to get my next one.

    Secondly, find ways to make your money work smarter, not harder. Surround yourself with like minded people who believe in what you are trying to achieve. Ask questions, look at historical data to research trends and opportunities, and back yourself all the way.

    I look forward to reading more on your blog, and hearing your success

  33. Hi Emma, congrats on persuing your dreams and the great achievements you have made thus far. My husband and i have purchased 11 investment properties and own our own house outright. We are now 36 and 37 years and have been together 19 years. When all our friends were off travelling we were investing. We started over 10 years ago and where criticised by friends for what we were doing, but like you said you live life once!! We are now in a position that my husband can stay home full-time and look after our three kids and we plan to travel. Property certainly is our passion, so good on you and don’t listen to the negatives. Mary

  34. Hi Emma

    Great to hear about your plans. By coincidence, there is a free community seminar on this topic next Monday. You can still register on-line at http://www.instil.org.au/secure/#. They are organised by a group of concerned people who want to present a balanced view of handling debts and reliable property investment tips instead of those who often have a property to sell at the end of their presentation.

    Hope to see you there.

    Cheers
    Petery

    • Hi Peter – It says it’s on every week, is this correct? I’ve registered my details on the website, however I wouldn’t be able to attend for a couple of weeks.

      Look forward to meeting you there.

      Emma

  35. The great Australian dream get rich by doing nothing. Well done young lady before you know it you will be a slum lord praying off people less fortunate than yourself. But hey who cares, it’s all about you retiring at 40 right?

    Hey Emma, here’s a novel idea. As a professional how about starting a consultancy business then you can employ people and actually contribute something to society.

    Nah!, that would be way to hard. lets buy a few rentals, let the land rats (realestate agents) look after it and you can sit on your ever expanding arse and do nothing.

    What a country we have become when people think the only route to wealth is through property investment

    • Hi Gut,

      I wouldn’t say I am doing nothing, I am a contributing member of society and a hold a full time job. I have aspirations to have my own business one day but obviously this cannot all be conveyed in a short piece in a newspaper which is about my ambition to invest in property.

      Emma

      • Gut obviously doesn’t understand that property is used to ‘store’ wealth as well as create wealth. Typical comments from an ignorant non-investor. Keep going Emma and don’t listen to socialists like Gut.

    • I wouldn’t say I’m getting rich by doing ‘nothing’. we spend our time after work (yes, we both work full time jobs – me a communication director with 9 staff, husband an IT consultant) and on weekends renovating our properties. And by renovating, I mean extending homes upwards, outwards, making them brand new inside and out. And no, we have not paid for work to be done – my husband is also a licensed builder so we do eveything ourselves.

      Same goes for managing the properties, we slso manage them ourselves. So no sitting on our arses and letting them expand!

      So yes, I’m more than happy being a ‘slumlord’. I’m more than happy being a multi-millionaire at 28. I sure sleep well at night knowing my hard work has paid off already.

      I would be interested to know ‘gut’ if you are still renting? I sense some resentment here…

    • hi gut, that’s just plain nasty. emma is working and she is very young, maybe she will open a consultancy! but we do live in a free country and what she is doing is perfectly legal. good on you emma for having the guts to do this investing journey

    • So ignorant to assume that property investing is easy. If it’s that easy, why doesn’t everyone do it?

      You sound like a bitter old fool!

      • Couldn’t agree with you more Brad on both your statements! Its interesting that gut thinks we sit on our arse and do nothing. I work as a paramedic as well and its not a career that would allow one to retire early! So why shouldn’t we pursue other avenues that will allow us and our family more financial freedom!

  36. Emma, firstly i would like to acknowledge you that in property market, index and other people opinion shouldn’t effect your decision making about your goals and retirement plan. But considering the position you held, and the possibility of your high tax income, there could be more to be done ( consult your accountant ).
    secondly high gearing with increasing portfolio increase your exposure to risk as vacancy, property maintenance, outgoing expenses will increase your stress load.
    thirdly the so call “tax deduction” from investment property only refund estimated 50% of the expenses you contribute to tax refund. but you would have to upfront the expenses quarterly…
    Lastly if this is your plan all along with no help of anyone else (income wise). you should consider pay off 1-2 property before considering doubling to 4 property via asset backed security to achieve stabler growth.

  37. the following is what Emm said:
    “If I have $20k, I can buy $20k worth of shares (plus fees of course, when buying and selling). But that same $20k will buy a $400k property.”

    Well, having 20 k to buy a 400k Property, this is 95% from a bank. This happened few years ago. Now a bank will require you to have 20 % of the deposit, so if you have 20k, you can only borrow 80k, name one property is around 100k in Australia.

    If you know a bit of Maths,you would know the plan to buy two properies a year with 80000 income a year in today’s enviroment is simply impossible.

  38. If your properties (and rent) remain flat, will you have sufficient free cash to meet interest payments? Let alone accumulate additional properties? It would be more prudent to save rather than leverage.

    • Before I make any purchase I will always crunch the numbers against a potential worst case scenario in terms of interest rates/repayments etc. I always have a clear indication of my financial position which I think is vital when making any major purchase.

      Emma

  39. Why is it all you Gen Ys want to retire @ 40? We are in our 60s and still slogging it out? Do you think you will hav ekids by 40? A new ball game then. So you will be retired and taking the kids to school. The kids will gleefully say to their cohorts when quizzed what Mum is doing. The answer: Mums retired. Gee! Comes the remark. Wish my mum could retire at 40 instead of slaving at 2 jobs……does it gel well? What if. like you all the mums were retired and taking their kids to school. You have aged before you have started. A retired mind can also be fodder. It pays to be industrious, you know?

    • Part of my reason to work hard now is so that when we do have kids, we are going to be able to be there for our kids, not have someone else bring them up because their mummy and daddy are working two jobs, and don’t have the time to be with them. Is there something wrong with that? I think not.

      Or maybe we want to work hard now because we are young, fit and able to do this. Just making the most out of life and taking opportunities when they arise. Again, is there something wrong about this?

      Or even maybe, its because we want to be able to pick and choose who we work rather than being in the one job for over 30+ years.

      Yes, having kids soon is a priority (we are trying already), and yes, we have also made a priority to travel extensively and see the world. Last year we spent six months travelling though northern America and Africa. The year before, four months overseas, the year before that, three months overseas… You see where I’m going with this?

      I guess I’m happy being a ‘slumlord’ when it allows me to choose the life I want to live, as it means that decisions are not made for me. I’m going to keep on being industrious in my own way, and keep on increasing my 5.2m portfolio (to which we owe less than 350k on) :)

      Its all about reaching financial freedom…

    • Maybe a more accurate way of putting Emma’s hope, is that she wants to be financially secure by age 40, and not have to rely on income from a ‘job’ to cover daily expenses. I have kids in public primary and secondary schools, and the schools bend over backwards to ease the path for parents who cannot afford to pay for camps and even the ‘consumables’ levy as a lump sum. I am a stay at home, financially OK parent at the moment, so I guess I could describe myself as ‘retired’. It is however not at all how I think of myself though.

  40. Hi Emma,
    This is really interesting. Five years ago, I had exactly the same vision to be able to retire from workforce when I turn 40. At that time I was on 35K salary and didn’t own any property and really had no chance of getting there. Today I have 8 properties and have paid off mortgage of the house I live in and still have 6 more years to go until I am 40. All with my salary, hard work and some good decision I made along the way.
    You are a brave person that you are willing to share your experience. No doubt there will be time, when it will be hard to make decision but if you stay true to yourself then I am sure you will get there. I am happy to share my experience with you but I guess you are well on your way.
    All the best :)
    By the way this is first time I have commented on any blog.. ever:)

  41. Hey Emma,

    Great job! Don’t listen to those negative property bears. Everyone knows that property in Australia doubles in value every 7-10 years. We are at the bottom now and it is a great time to buy! Private debt in this country is only 1 Trillion and hardly more than 100% of GDP. I believe that property prices can keep rising at least until debt is equal to 500% of GDP, meaning a property bought today for $500,000 will be worth about $4 million in only 21 years! Just in time for your early retirement! Good on ya mate!

    All the best!

  42. Hi Emma,

    I am in a similar situation. I work in commercial construction, i’m 25, and recently bought a house so that i could stop paying rent. The plan at the moment is to finish some major renovations, then rent it out. I will look to purchase another house/unit and do the same again.

    I have made two other significant investments, one is a residential block about 300kms from Melbourne, which has not panned out the way i would have liked, and the other is a holiday house built by myself and two brothers (equal 1/3 share). These are not money makers at the moment, but as far as equity goes, they have been very helpful.

    I am keen to see the path you travel, and where it differs from mine. A little rivalry doesnt hurt either!

    Cheers,
    Owen

  43. Brave girl – put your smiling face out there for the doomsayers to kick! Most of the advice/feedback you’ve received has been useful. My two cents worth is – if it isn’t cash positive it isn’t an investment – negative gearing assumes asset value increases – don’t count on getting free money. Good on you for having a go!

    • Thanks Gavin. I am definitley looking towards more positive cashflow properties going forward, or at least properties that have the potential to become cashflow positive within a couple of years whilst still experiencing capital growth.

      Emma

  44. Good on you for taking your financial future into your own hands. It is amazing how many people are prepared to criticise you for going down the property path. I don’t understand the animosity. It is just another way to invest. I have never understood why investors get accused of pushing prices up. I for one am always trying to get them down. It is the people who fall in love with their home and then pay whatever it takes to secure it that cause the upswings.

    Everyone has their own preference for saving and investing but so far in my experience about 90% of the population just earn and then spend their money on consumer items. These seem to be the people most vocal about “rich” people.

    I have 8 residential investment streams and a significant share portfolio all of which I proactively manage. I also have a job and most of this income is directed into more assets. Consumer spending is the last thing to take place and is always done with quality and longevity in mind.

    I hope it all goes well for you and don’t let the knockers get you down. No one else is going to provide for you financially.

  45. It’s good to have dream. But your expectation is too high. Life will not be always so comfortable as it is now for you, especially when your family grows. Good luck.

  46. i am on track to retire by 41 and am only a year from getting there.
    but for GFC i would have retired by 39.
    any approach to financial freedom cannot not but have these key ingredients:
    patience
    spending less than you earn
    diversification
    keeping debt as low as possible
    leveraging compounding

    iam afraid the best days of building wealth from property are over – at least for next decade.

  47. You go girl. I bought a house in New Farm for $170k in the 90s and it has set me up for life. That bull run is over. Now heavily into the stockmarket full time, which is a casino my dear. When that bull run inevitably ends, back into houses. Wash, rinse, repeat.

  48. Hi Emma

    I am also attempting to invest in property following the same principles, so far I have one investment property and hope to accquire some more in the next couple of years (although in Sydney it will take a little while to build up the equity in my overpriced unit!). I am a bit older than you so I wish I’d started earlier. I will follow your blog with interest to see how it’s going for you and hopefully learn some new stuff along the way. Don’t let the trolls put you off!

    Good luck,

    Pete

  50. Pingback: Smart ways to climb the property ladder | ResidualRx.com·

  51. Hi Emma,

    Like you I had a vision to retire early, probably not at 40 but at 55. I started investing in real estate in 1983 and now have a portfolio of over $2m, including a beach house and a city apartment. I have also invested in shares and super (since I was 21) and my gains in real estate far outweigh my other investments.

    Never lose vision of your goals, I mean there have been some tough times over the last 25 years (ie; the recession we had to have, with 17.5% interest rates) and you never know if they may return in the future, but you will get there. The important thing is that you are doing it…

    Good luck for the future….

  52. Emma,

    Welcome to the Australia’s ever present tall poppy syndrome. I can understand the want to remove yourself from the stress of weather creation and setting goals (before 40) is a great motivator in achieving that. You’re certainly not the first nor will you be the last wanting to live your life free of the worry of where the next pay cheque is coming from. These days you mostly hear about the ones going to silicon valley with the latest iphone app, rather than the ones going down the bricks and mortar apparoach.

    To those that say you’re selfish. By freeing ones time from working (for someone else) you are free to do what one desires. I don’t know you so not going to put words in your mouth, but volunteering, philanthropy and becoming a mentor are options to give back once you no longer need to work for money.

    Good luck.

    I’d be interested to read your blog in the coming months on how you’re managing to sell a property every year in such a market without getting killed by stamp duty, capital gains tax, and selling costs. If you can I think there is definitely a book in it.

    • Hi Woody,

      Thanks for your comments. I totally agree with you that volunteering/philanthropy/mentoring is a great way to give back. I am currently a member of Habitat for Humanity and one of the reasons I wish to pursue investing in the long term is so that, financially, I can be in a position to create opportunity for my family, friends and those less fortunate.

      Emma :)

  53. Hi Emma , Just a quick note to say congrats on your purchase . I hope you don’t listen to to much of the negative scribed above as so many folks are just plain depressing . You have found some fame on the website http://www.hotcopper.com.au [property section ] so drop in one day .If it all goes pair/pear shaped which I’m sure it won’t then as a last resort u could always marry me !!!!!! I may not make u rich but I’ll do my best to make u happy . lol
    cheers Pete .

  54. Good luck Emma, i’ll also be following this with Interest! .

    I have a similar plan to yourself (retire in 2025), albeit slightly less aggressive on the acquisition side – I don’t believe you need that many properties to retire comfortably on (should you wish to) in that time frame. This in itself reduces your exposure to some of the risks alluded to above. It also makes it significantly easier to achieve from a borrowing and serviceability perspective.

    Just a few suggestions that might help you on your journey –

    - Keep reading and learning all the time. Challenge the information you come across, and ensure it really is correct and suits your goals. – Basically learn to sort the wheat from the chaff
    - Get a good team of experts in particular an accountant and mortgage broker that SPECIALISE in property investment.
    - Understand equity and cashflow implications borrowing and serviceability. Project your calculations further than just your next purchase, you need to map it out all the way to your end goals and adjust either the investment or your end goals to suit.
    - Experiment with different strategies and calculations, then when you find one that works for you, create a very clear plan with all the calculations.
    - Always be conservative in your estimates.
    - Don’t be afraid to broaden your investment horizons. If you want to achieve your goals you will need good growth. I’m not sure Melbourne is the best place to deliver that in Australia. IMO mining will drive our economy for at least the next 10 years. That doesn’t mean you need to buy in a mining town, but you can maximise your chance of growth by finding areas with more exposure than Melb.
    - You will need to add value to be able to release equity and move on to the next purchase, in the event of low growth. (ie: complete work that will increase it in the eyes of a bank valuer, not a real estate agent)
    - Don’t take recommendations or advise from family/friends/self proclaimed property experts as gospel. Always perform your own due diligence at a macro and micro level of an area, then on the property itself, and ensure it fits your strategy.

    I think you have a great attitude Emma and it’s ALWAYS people with this desire for success that actually succeed in life, not only financially, but in so many other ways. Leave the doomsayers to wallow in their own self fulfilling prophecies.

    If you want to chat more i’d be happy to do so via email or facebook. I plan on embarking on a development myself in the medium term, so if you are interested, I think we could provide some helpful info to each other along the way.

    Cheers

    Stu

  55. Some advise from an experienced PM, be realistic not optimistic.. optimistic planning is rarely succesful.

    Good on you for trying and don’t let others put you down.

    Research will be one of your biggest tools also, you need to know where to buy for the future, not the present.

    Good luck.

    Paul

  56. Well done, I am 34 and have similar goals. I have several residential investment properties, built up over the years. Two a year seems ambitious, I have averaged about 1 every 18 mths. I do a lot of renovating and self manage to save money. Well done for sharing and having a go.

    • Hi Brendan,

      Thanks for your comment and congrats on your investment success so far.

      One could say I am overly ambitious but I always find it is better to aim high, even if I don’t reach my goal I still will have come further had I not had such high expectations for myself.

      Emma

  57. Hi Emma,

    I am you age and recently purchased an investment property in Queenstown, NZ. I’m living in Perth and to and fro’d buying in WA for about a year, just couldnt get the same rental yield in Aus as I could in NZ. This combined with no capitals gains tax laws in NZ made it a no-brainer. Although I will be buying my owner oc house in Aus, I would be reluctant to ever invest. What made Aus the drawcard for your investment? Was it solely because you were familiar with the market? Ben

    • Ben – It was absoloutley because I’m familiar with the rental market. However, this doesn’t mean that I am adverse to investing outside of Australia I’d just prefer to find my feet in the property market with areas I’m familiar with inititally.

      I’m curious if Aussies will get the same no capital gains tax benefits if they invest in NZ?

      Emma

  58. Emma,

    In the interests of full disclosure and I’d like to see you make a statement to confirm that the content on this site is created solely as a result of your own personal interest in property investing and is not created for or influenced by any gift, service, compensation or other consideration from any organisation, including but not limited to media organisations, real estate institutes or businesses.

    Regards,
    Chris

    • Hi Chris,

      I created this blog out of my own interest in property and to give young, or first time investors, a point of reference that they can relate to.

      When I agreed to do the Investor Overhaul (they approached me through twitter) I honestly had no idea it would generate this much interest! It’s been a very enlightening experience to say the least.

      Emma

      • Emma,

        Thanks for your response, however the response you provided does not address the point that I raised.

        Regards,
        Chris

        – Chris, How did I not answer your question? You asked me if I was doing this out of my own interest and I confirmed that I am. Am I missing something?

        Emma

      • Chris,

        Surely you have better things to do with your time than post ridiculous request like the one above. If you genuinely don’t agree with anything posted on Emma’s blog, which you clearly do, then simply close the browser mate.

        FYI – Emma has been kind enough over the last few months to give some great advice/tips on switching careers over into Project management, not once has there been any type of monetary driver or second agenda for this information – just good old fashioned help!!

        Matt.

      • Matt,

        With so many vested interests these days it is difficult to separate personal interest from public relations, hence my (unmet) request.

        I don’t think that is a ridiculous thing to ask at all.

        Chris

  59. A lot of naysayers and seemingly bitter folks out there for no apparent reason.

    I agree with diversification and it looks like you’ve already thought of that, it goes with type of property and the areas you are looking to invest, too. But you have to start somewhere affordable and this is the first step on your investment ladder.

    We are the same age Emma and I was lucky enough to get into my first property a few years ago and it is immensely rewarding to succeed. All the best on your journey and with your goal :)

  60. I’d really like to know how owning one investment property got you an article in the newspaper? There are many people your age and younger in the same situation. Do you know someone at the newspaper? Not criticising, just asking.

    Also, Warren Buffet says that diversifiaction is protection against ignorance; something that is unnecessary for people in the know.

    • Hi Jack,

      I was approached via Twitter by Penny Pryor, she writes for numerous publications. She asked me if I was interested in being part of the Investor Overhaul and I thought why not!

      Emma

  61. Howdy Emma,

    Its nice to see a young person trying to better themselves, and I certainly wish you well.

    I am a bit afraid to purchase property at the moment, as I very sincerely believe that Australia, and a lot of the world is in the midst of a property bubble. Credit has been too easy, and people have borrowed too much money to buy houses, on the expectation that prices will always go up. The growth in Australian debt to GDP ratio has been almost exponential over the last ten years, and pretty much most of it has gone into housing. The bubble seemed to be bursting around 2008, and the government panicked that we would experience a housing crash like the US, doubling the first home owners grant, and driving up debt driven house prices even more. Price to rent ratios, a measure of value in housing, are very low.

    As for shares, the European monitory crisis, and the astronomical US debt are two land mines just waiting to explode.

    I am not an expert, and could be wrong. Property is very emotive, and every one has an opinion, and many people will base their opinion on their own personal position. (I rent, so perhaps I am biaised.)

    I guess do your own research, but I think these are very dangerous times.

    PS:-Emma by the time you retire, peak oil may make all our speculations about acquiring wealth somewhat moot. If you want to have nightmares, I suggest you google peak oil. ANyway, good luck old bean, you seem nice….

  62. WRT to the advice given by the experts in the Fairfax article, it’s quite interesting to note how many people here have different strategies or disagree outright.

  63. Property in Australia will fall off the cliff late 2013! The great China crash is coming, get out of property now before it’s too late as the Chinese will repatriate foreign funds back home into a massive credit crunch.

  64. Hi Emma,

    Love what you are doing with the blog and everything, its something I would love to do but but have just not got around to it yet! I am 24 and am already up to my 3rd property and looking for the 4th and am going on the same strategy as yourself with the lower valued properties which have fantastic yields. I am also looking now at getting into some small development to manufacture some equity and cash.

    I cant understand how people can be so negative towards what you (and also me) are doing, we continually stimulate the economy through transactions, increase the stock of rental properties which are in such short supply as it is and setting ourselves up for the future and not relying on tax payer funds during our retirement (for me, my goal would be 35!!!) From when I was about 18 or 19 I had my 25/35 plan- 25 properties by the time I was 35. A bit ambitious I know but hey setting easy goals arent really goals in my opinion!

    • “we continually stimulate the economy through transactions, increase the stock of rental properties which are in such short supply as it is ”

      Investors buying homes and renting them out does not increase the stock of rental properties… The # of homes built is not changing, only the sale prices. Unbalanced property investment inflates the prices of homes, which you are buying at artificially low interest rates. This in turn increases rental prices as landlords struggle to meet mortgage payments.

      Caution, young Jedi. It is painful to watch your future collapse when markets crash. Have a plan B and don’t rely on equity appreciation. It is patently unsustainable.

      • Short supply where is the proof ,it is not it is a story put out to keep the market afloat, they count in homeless people as the ones wanting a home as well.
        A house is a debt laden consumable just like a car.
        Sit back and watch the price of Gold/ Siilver after March 20 2012
        Join Australasian Stock Forums and read about other who have been in property.

  65. Found you via, Domain.
    Yes there seem to be alot of criticism. Would really advise you not to pay too much attention to them. There will be mistakes along the way and people will say, I told you so. Don’t waste your time too much replying. Would rather read about your progress and any mishaps too.

    There’s always so much research to do with property. With 2 investment properties and a home. The debt level is over $1M with LRV of 75%. But if you can live at home and use the excess for investments via business / properties / shares, you’re ahead of alot of people.

    Good luck with your Journey.
    Stan

  66. Just read your article in todays SMH.

    All i can say is good luck. I was trying the same scenario – retire by 40 after having about 10 houses, and then sell we i needed to.
    Things always change in your life – marriage and kids especially slow the wealth creation. I’ve past 40 years of age and now my goal is to retire by 50.

    Hopefully i can achieve my goal this time.

    All the best for achieving your goals.

  67. Good luck Emma dont listen to all the knockers I would guess their just cynical from a bit of age as tends to happen. Follow your dreams the best of luck, mistakes are just some life experience you have purchased. George

  68. Emma,
    There are some real naysayers on here! Why should you aim to achieve anything less than the best?
    My Dad (a 50s baby) aimed to be a millionaire by 40 and retired by 50 – and he achieved it! How? Residential property investments, his own businesses (a few Hydraulink franchises) and a lot of hard work by both him and my Mom.
    They’ve both inspired me to aim for similar success! I’m 27 – have three investment properties (equal shareholdings w/ my folks) worth around $1.5m – which are all cash flow positive and just minding their own business.
    People will always try to bring us down because they are jealous – at the end of the day, there are housing shortages (especially here in Auckland, NZ) and people need houses to rent because unfortunately they can’t afford to buy. Hey – we can afford to buy so why not use that to our advantage?! Then those that need to rent, simply rent off us. Problem solved – everyone wins.
    Don’t listen to the negative comments – when you’re retired at 40 they’ll still be plodding along.
    Good luck!
    Cheers, Crystal

  69. Can I ask how much of your $80,000 salary you are planning to give away to needy charities, either in Australia or overseas? Just because you can accumulate all the wealth/assets you need to retire at 40 (or whenever) doesn’t mean you should.

    • I prefer to give my time but I always give what I can to charities I have an affinity with. I see creating wealth as an opportunity to give back to my family, friends, community and worthy causes alike and this is definitley part of my long term goal.

      Emma

    • Thats a very short sighted comment! By investing in herself she will have greater resources to offer to charity in the future. And when she achieves financial freedom, her time ability to donate time will be limited only to her desire to do so.

    • jm – I think you are missing the point. Once Emma is financially free she will be in a position to give away much more than $80,000 as well as her time to volunteer for charities and many other organizations if she so chooses.

  70. Emma,
    I am amazed by the negative comments on here…….
    Good on you for having a go and I hope you reach your goal!
    And thank god for the people like Brad and Brendan

  71. I agree, but their advice is pretty sound, they have actually considered your financial situation and are suggesting strategies that are realistic for you. Some people on this site are going off in all sorts of tangents. Don’t forget that many people will only tell you about their successful investments and cover over the reality of their financial situation.

  72. Go Emma!! I am also a 27 y o, with a similar career path & similar aspirations. I’m a first home owner & now that I’ve gained some equity, am trying to to decide on the next step towards my property goals. I’ll no doubt be sharing some of your highs and lows, from over here in NZ :) I’m looking forward to future posts, & opportunities to learn from & compare your experiences.

  73. Well done for looking over the parapit and putting yourself out there.

    A cynical but very successful property investor once said “dont take advice from anyone with less money than you”. My FA agreed with that sentiment…. Apply that for the haters that have vented at you on this blog.

    My wife and I (at 31 and 38) have 6 properties built up over 10 years but with kids now in the mix, we have had to slow down but in the next few years they will start becoming freehold and then the cashflow can go back into the others to improve/increase rents or pay other mortgages off quicker.

    I also have a super account (that diversification word again) that I started 6 years ago and I am constantly amazed at how much the weekly contributions have turned into now.

    Best of luck and I will keep and eye out for more good tips on the blog.

  74. I think luck can play a big part.
    Brought Section; then built house on it for small gain.
    Then brought renovator and watched house prices double over 5/6 years for big win.
    Brought second renovator with equity 2 years into renovator above – and it recently got wipped out by an earthquake – for second big win.

  75. After reading some of these posts I think this blog may soon become the most draining, most energy sapping part of your foray into property investment!

    Doubtless you are at the beginning of something great. Make sure this website isn’t to your own detriment.

    All the very best.

  76. Emma, a girl after my own heart. I am a 25 year old marketer in Auckland NZ and bought my first property with my brother almost a year ago. We have been renovating it ourselves in our spare time and weekends and hope to keep buying houses together and trading some too. Just a week ago I decided I would start a blog detailing my journey and now I have just found yours! Keep it up Emma, I will keep following this with interest and will let you know when I get mine up and running :)

    -Mike

  77. Hi Emma,
    i am a 30 year old female that has dabbled in the property industry since i was 19. I build my first house and lived in it for ten years. i then purchased another property and rented it out. Whilst earning similar rent to what the property was worth, it didnt give me any positive income, and i was always scrapping the bottom of the barrel, to afford rates for two property’s paying realestate for the very little effort they did in protecting my property. I moved out of my house to earn more money in the city and rented my house i lived in for 10yrs out. since leaving 3 yrs ago i have had 5 different family’s renting my house. the wear and tear from people doing this, does not help your property at all. i sold my investment property with a 40k loss due to tennants not looking after it, i have since learnt it prob wasnt in the best location to have an investment. but the town was tipped to boom due to natural oil found, and prospects of it being pumped to brisbane. I had it for 3 years.I sold to buy a house for myself and my partner to live in after saving a bit of money to go again. we rented a bdr from a friend in a tiny house to save money. we purchased a failry good property with “work needed to be done” we currently live there now and are trying to renovate when we can with the little bit of money we can save, to continue doing this. My investment house is currently rented out. I have spoken to a few people re the pro’s and con’s of keeping our investment property vs selling it and renovating and putting everything into the house we live in now. It all seems easy when you look at the formulas people use etc to be property tycoons. but really in todays world, i think live simply, dont worry about putting roofs over other peoples heads, and look after yourself. tennants rarely look after your property’s, you can have less cash flow hastles and not have to sacrifice so much, and just be happy. the stresses of owing the banks money can way you down. its not nice to get a letter saying you have fallen short on a repayment etc, because the realestate has held money over to make interest on it, and your left making up short falls until they put it in etc. My strategy from now on will be to renovate fix up the house you live in, add value, then sell and move into another one, and do the same thing. having two property’s with no extra cash to renovate or improve property’s to make money and relying on the housing market to go up in value is a very slow process with the housing market today. It takes a lot longer than we think for this to happen. On avg i have found they only really go up around 8% per year. So that is my experiance i thought i would share with you… good luck and i hope all goes well.

  78. I think the first thing you might consider is getting a better paying job. Nowadays $80,000 is a very, very small income, especially when you pay tax then take out of your living expenses. If you are 27 and you are looking to accumulate the assets you mentioned by the time you are 40, you have no chance on this level of income.

    However, I wish you well in pursuit of the mighty dollar.

    • Obviously you need to take into account that I won’t be earning $80k forever and also I am looking at other options to increase my present cashflow which will help with future acquistions.

      Emma

    • $80k is only a “small income” because of the ridiculously inflated property prices. Someone should be able to live well and save on $80k. What kind of world is this?

  79. I see you talk of starting a business in the future also. Property is a business not investment in my opinon. Look at all the big investors out there. You have to find places, renovate and maintain, manage tenants, run accounts etc. If you plan to retire and enjoy life you need staff (can contract management / repairs out) so you are free from day to day running.

    You need to buy more than 2 a year which are cashflow positive, pump everything into debt repyment. Buy dogs, get them fixed up and there is the equity growth. then buy again. Trading is risky, just buy hold & make cash while you sleep.

    It took me 3 yrs to build my portfolio (yes on 100% lending using our own home equity) and are now paying off 1 mortgage a year now.

    Hope all goes well with your goals, remember ” live poor – retire rich”

  80. You will always get friends and relatives telling you not to invest in property or shares or don’t start a business. Never take finical advice from a poor person they will always say its to risky. Do your research and if the numbers stack up go for it.

    • What awesome advice!! Surround yourself with successful people and take their advice. Minimise your risk where possible, and dont believe anything that just doesn’t make sense – do your research and be smart!

    • What if they started out rich, and ended up poor, doing what you are doing? There are plenty of investors in the US in that situation today…would you have surrounded yourself with those people when the going was good? Would you listen to their advice now, based on the wisdom of their experience?

  81. HI Emma

    Just want to congratulate you on your hard work and commitment to your goals!

    Having read through the above comments, I can only echo the positive ones.

    You dont make wealth by working hard – it helps, but isn’t enough if you want to live a comfortable life in retirement (at whatever age that may be). Dont forget all those families you are also helping by providing additional housing to the marketplace – to people who can’t afford to buy their own home, need somewhere to raise their family and you are giving them that opportunity.

    As a fellow young investor (a home in NSW, and just finished my first investment property in QLD, with plans for 2 a year going forward, at the age of 29), I hope that you influence a few more young aussies to take the step, wear a bit of risk (managed appropriately) and hopefully set a few more people up for a comfortable retirement.

    Best of luck, and may the property gods shine on us :)

    daina
    Sydney

  82. I find it interesting that there are so many diverse opinions here. The truth is that nobody can guarantee Emma an outcome either way, simply because there are too many variables. She may invest well and retire at 40. She may invest poorly and make big losses. She may invest well, diversify but end up a victim of circumstances beyond her control. Only time will tell.
    Personal anecdotes offer experience and advice, but to say that her experience will mirror your own is far-fetched. To make judgements on her motives and morality are unfair and ignorant. And the reverse is also true – this blog will share experience and give insight, but this is only for inspirational purposes should you chose to take it that way – that’s all it can be.

    My own personal input? Allow yourself to be flawed Emma. You don’t need to answer to every criticism or come out in a favorable light, what matters is your achievement, which will speak for itself in time. Don’t just discuss your safety net, but your vulnerability, your hard times and your mistakes, and the process of overcoming them. This will set you apart, and give your blog the guts that makes it worth reading

  83. Hiya,

    I’m a 24 y/o Wellington woman interested in following a similar strategy to you. I’ve spent the last few years just observing the market and looking out for patterns and trends. The next few months are when I will take action and buy my first property. Wish me luck!

    I just wanted to say good on you. I’m not a blog follower usually, but I’ll be keeping an eye on this one.

    I see a lot of negative comments (usually from men) – they make me laugh. Sisters are doing it for themselves people, get used to it!

    I would wish you luck, but you don’t need it. Keep doing your thing :)

    Anyway, I just

  85. Pingback: SafetyBear Blog - Opinions on the Australian Housing Bubble, GFC, Politics and pretty much anything that shits me·

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  87. “I am definitley [sic] looking towards more positive cashflow properties going forward, or at least properties that have the potential to become cashflow positive within a couple of years whilst still experiencing capital growth.”

    I hate to be a wet blanket, but this is deja vu from the USA circa 2005/ 2006. IF YOU BUY AN INVESTMENT HOME THAT IS NOT CASH POSITIVE FROM THE OUTSET, YOU ARE SETTING YOURSELF UP TO FAIL. You have no control over the market and your equity growth. If you and your followers buy properties that cost you money on a month to month basis, relying on equity growth, that is not an asset, it is a liability. Too many people with liabilities, 1 hiccup (say, ooh, an earthquake, interest rates increasing, job prospects falter) and you start to see the pyramid scheme collapse. Once the bubble starts to pop and there are only so many interest rate cuts that can prop you up.

    Property is a sound and fantastic investment, done in the right way. But do not be fooled into believing prospective equity growth is a safe trade-off for losing money month on month. When rents are below mortgage payments for the same home , the system will stall out. If you have any doubts about this, look to the US.

    For context: I own 4 properties in the US. 3 of them are “upside down”. The only reason we have not been foreclosed on is that we are cash flow positive across all 4, and have been from the outset. Not the same story for much of the state. People who were losing money on a monthly basis and started to see equity loss dumped their investments and brought the house of cards crashing down.

    I know the arguments re. differences between Aus/ NZ and the USA, but do remember that in the US they can fix their loan payments for 30 years and are therefore less vulnerable to rate increases. Nevertheless, neg. am, interest only, zero down/ 5% down caused a world of pain for many bright-eyed property investors. I do not mean to discourage you and am committed to real estate as an investment vehicle, but please, exercise caution.

    xxx

  88. You need to read and follow up on Steve Keen and find out the Australia Housing bubble is about to pop, get out of real estate and buy Gold and sliver then buy once housing is down to its proper level buy then.

    Housing hasn’t gone up for years , cheap credit has made housing rise just like USA
    and the same will happen here .
    ASF have a section on OZ RE.

    • The news articles I am reading in Aus/ NZ publications re. the housing market sound exactly like the plants put out by the US Association of Realtors and other self-interested parties when they could see the bubble starting to wobble. They will try to prop it up with words and rate cuts for as long as possible, because everyone is so invested in keeping prices increasing (i.e. their own investments/ careers). It’s the first time buyers and novice investors who get screwed by this; everyone wants to believe ‘it’s all good’, it’s so easy to put your head in the sand, but you must not believe the hype…

      When they say ‘prices have increased in real terms since the same time last year’ (ie better buy NOW!), do they mean asking prices, or selling prices? There’s a big difference. Instead ask what’s the average time on market? Is it increasing or declining? How many months’ supply of inventory is there? Stats will be twisted until the inevitable is staring everyone in the face and it’s no longer possible to deny. In the US they pushed ‘sales are improving’ as prices slid year on year, until finally they fell off a cliff in 2008. Don’t be misled by the classic ‘what you’ll save in interest if you lock a rate this low is worth it even if your price does decrease a little’. Wow! Worth it until your rate increases, possible….what then?

      Don’t over-leverage, this is not the time!

  89. Before you buy any thing read this:
    And IT will happen here soon.
    Be warned.
    http://www.chrismartenson.com
    or go to
    Australian Stock Forums and read up on property don’t get sucked in my First Home Owners Bribe a lot of people are soon to spend their lives in misery.

    • Smart investors don’t buy at the top of the market for a negative monthly yield…they buy at or near the bottom and their investments create wealth from day 1. A monthly loss is not considered a reasonable trade for presumed equity growth, which may or may not happen…

      • The bottom of the market will not be here for a long time yet, in USA they are bulldozer never lived in houses because of the cost of maintaining, just the same as other countries are doing.
        Ireland has 300,000 vacant houses they can’t sell.
        USA started to tank in 2007 and still going down we have not got under way so we have 2018 at least before a bottom.
        How to own a small RE portfolio start of with a big on.

  91. I have a friend who just bought an apartment for nearly half a mil, with guaranty rental, promissed price double next 10 years, etc, etc,
    The poor guy failed to convince his wife, signed the contract anyway (to force his wife signning the contract, otherwise they have to pay pernalty), now family split up, his own house is on the market. That is, he is about to lose his family, house, while owning the bank a large sum of money. He is deeply depressed.
    Why? innocent people like you Emma, ignorantly helping the RE industry destroying

  92. sorry, didn’t finish the last post ..

    … destroying lifes like my friends’

    I own multiple properties too, accidentally. The first house I bought was too small when I got married, so I bought another one while keeping the first. Back then it was cheap. However, I don’t wish my houses will double in values in the next 7-10 years forever. It is already way too expensive, how would my childrent afford to buy their own house? I don’t want to take away their joy of purchasing a very basic element of human needs: a roof over their family, a place where they can proudly working hard paying for it and raising their kids, just like I do. Retiring early because of property price appreciation is selfish. It is personal gain at a cost of your fellow human being suffering, including those in your family.
    (excuse my english, I don’t have a spell checker handy either).
    Alan

    • Jack, I take it you mean Alan is a commie because he doesn’t like the idea of younger generations being priced out of the market from property appreciation which only benefits those at the higher ends of the ladder….

      Nevertheless, excessive price inflation is NOT good for society as a whole, not least because it is unsustainable. It is an unhealthy economy that bases its so-called wealth-generation from runaway house price increases. Someone will end up carrying the can for those who make out like bandits. Most probably, it will be the young.

      FROM http://WWW.INTEREST.CO.NZ
      By Bernard Hickey

      “This week Roy Morgan published its annual State of the Nation survey showing a stunning rise in the wealth of New Zealanders aged 55 and over.

      (See links below for information on how to buy this market research. Readers of interest.co.nz qualify for a major discount.)

      The survey of 5,000 older New Zealanders asked them how much they were worth and how much debt they had compared with the broader population.

      The report confirms an extraordinary shift in the structure of wealth in New Zealand that raises huge questions for politicians, policy makers and voters for years to come. Anyone aged 30 or lower should look away now. It may prove too painful to read.

      The gross wealth of those aged 55 and over has risen from NZ$188 billion in 2002 or 37% of total wealth to NZ$525 billion or 47% of total wealth. This growth was only partly due to a rise in proportion of the population who are 55 and over to 24.7% from 19.5%.

      That 2002 to 2011 period was dominated by the housing boom from 2002 to 2007 when house prices virtually doubled, even after accounting for inflation. Anyone owning property early in that period is now much, much richer, given many had leveraged investments in their properties because of their mortgages. Most of the property owners through that period were aged over 30 and therefore made the bulk of the gains. This shift in in the proportion of the wealth to the aged will intensify further as that ‘lucky’ generation of mostly baby-boomers retire over the next 20 years.

      The picture becomes starker when looking at net worth. Those aged 55 and over added just NZ$21 billion in debt to NZ$32 billion over that 2002-2011 period. The bulk of the extra NZ$100 billion of debt added by New Zealand households over that period was taken on by those under 40 who had to leverage up to get into the housing market. Some of the younger buyers were lucky because they got in early enough in that 2002 to 2007 period and didn’t have to take on too much debt. The also benefited from the house price growth late in the period.

      The unlucky ones were those that took on massive debts in the last five years to buy houses at the newly inflated prices. They were mostly below 40.

      The net worth of those 55 and over rose to NZ$492 billion or 52% of the total by 2011 from NZ$176 billion or 43% of the total in 2002. The survey shows 71.4% of that wealth is tied up in their own homes.

      This structural shift in wealth to the aged and a loading up of debt on the young is obviously not sustainable, particularly when combined with the current promises of universal superannuation from 65 and publicly funded healthcare. With the current policies, New Zealand faces the bizarre prospect of either higher income tax rates on the increasingly indebted young to pay for pensions and ‘free’ healthcare for the increasingly wealthy old, or huge amounts of government borrowing, which would of course have to eventually be paid repaid by the young.

      No wonder a record number of mostly young New Zealanders left to live in Australia in the last year.

      So how will this end? How will the wealth and assets be passed on? Some would argue that eventually the baby boomers will have to sell their houses to a small number of younger people coming behind them. This would, in theory, drive down prices and even up the score. But there are no signs of that happening with Baby Boomers refusing to accept lower prices and instead expecting the young to load up with large debts to pay the high prices. Many Baby Boomers are also looking to further expand their wealth by leveraging up their equity windfalls to buy rental properties. They would prefer the young to be tenants rather than home owners.

      Some would argue the Baby Boomers will simply pass on the wealth in inheritances. The problem there is that this will be too late for their children, many of whom will be in their 50s, to have their own children in their own homes.

      New Zealand needs to have a conversation about how to transfer this wealth back. A land tax, a capital gains tax, higher income taxes, a later retirement age, means testing for New Zealand Superannuation and means testing for public health care will have to be considered.

      Or the Baby Boomers will face the ultimate sanction. They will have to watch their grandchildren grow up by facebook and Skype.”

      ————————————-

      This item first appearded in the Herald on Sunday.

  95. It’s only a matter of time before rates start to show signs of increasing. Many investors will dump their properties and move their equity into other areas, leading to further price declines as inventory floods the market. These sellers will be fine, as they will sell at the top of the bubble. Those who stay the course waiting for it to improve (or because they need somewhere to live…or because even a tiny market fluctuation puts them upside down, as they bought with 5% down, so they CAN’T sell) will be in a world of pain.

    That’s how it starts. That, and the negative impact of China’s economic slow-down on the Australian housing market.

    The smart investors will quit at the top, they always do, because that’s not when they bought.

    • It’s hard to imagine that interest rates will rise much, unless property prices are also rising.

      More importantly, I think it’s worth looking at the really big trends happening across the globe. Population is rising. The amount of really attractive places to live is not rising much. Australian cities consistently come near the top of most global league tables. Economic power is shifting from Europe and America to Asia-Pacific. Some countries are blessed with mineral wealth and low-corruption political/business cultures. I guess the Australian economy will have some bumps on the road, but from here (in England), it looks like an entirely sensible place for heavy investment by young citizens like Emma.

  96. The only way for the young to avoid getting monumentally screwed by the current situation is to collectively not buy, which will inevitably cause prices to drop. However fear of missing out (driven by self-interested media) keeps people over-stretching themselves to breaking point just to be ‘on the ladder’. There will come a point in the cycle where it no longer makes sense to buy a home if renting is significantly more reasonable.

    Things are not what they were in the 70s, it’s a new world and the same ‘guarantees’ do not apply.

  97. far out what a melting pot of whackos you’ve attracted here Emma!

    i think it was Zach that said it the best – you need to make your own calls based on what suits you, from an informed position. I love how many of these people have slammed you for taking your passion for real estate and investing in the property market, when what you should REALLY be doing is investing in the stock market and/or indirectly through managed funds/super. Um… has anyone seen the stock market lately? For every horror story in the property market there is a countering horror story of baby boomers (yes, the same baby boomers who apparently own all the properties… what the?) over-investing in the stock market either directly or through super who are now completely fucked. My old man thankfully has a very balanced portfolio so his huge losses in managed funds/super are outbalanced by his strongly performing property portfolio. This is how it is meant to be. Again, it is about balance and diversification.

    Emma you have repeatedly indicated that diversification is your plan, and good on you. It should be. The fact is that, like so many others (myself included), you are probably a bit of a control freak (sorry to judge but I don’t mean to be insulting with this description) and the thought of owning bricks and mortar that you can see, touch and impact on the value of, yes, with some level of risk, is far more attractive than essentially giving your money to some asshole in Wall St to do god knows what with.

    good luck to you.

  98. The only time it might make sense to buy at the top of a bubble, is if you can either:

    a) obtain financing that you may not be able to do so after the crash (eg low rate locked for a long time – unlikely; sub-prime liar loan/ no doc/ low doc – probably) or;
    b) you have found a killer deal well below market (unlikely, the ‘deals’ are just ahead of where the market is going) that is strongly cash-flow positive from day 1 (equity appreciation does not count in this calculation).

    If you think pointing out you’re sitting on top of one of the largest property bubbles in history is the behavior of a ‘wacko’, then there’s not much to add.

    Good luck to you all.

  99. Your determination and drive to create a better quality of life for yourself is to be admired. It’s not everyday I hear other fellow Gen-Yers talk about financial goals and retirement, in fact I almost never do.

    I’m only 23 years old, but I strongly identify with what you are trying to achieve, because I’m currently trying to work to similar financial goals and I also love my job (I’m also an engineer, a structural engineer… fancy that!).

    I currently live in Gladstone, which has had the spotlight on it as Queensland’s boom town for some time now… property prices in 2011 saw increases of as much as 20% of more while most of the country was in the doldrums. Wishing I could’ve been involved, but it’s a bit outside my price range for an investment!

    Best of luck in your endeavours!

    • Thanks Andrew! I used to live in Rockhampton (for 10mths) and visited Gladstone often so I saw first hand the property escalation that took place there. Whilst it is a great opportunity for short term investment I’m wondering how it will pan out over the next 10+ years. Any thoughts?

      Good luck with your journey :)

      Emma

      • I don’t think Gladstone is going to consistently see the crazy increases that it saw last year – the demand is strong but the supply is fast catching up with houses going up in at least 10 different estates all currently under construction and a number of workers on the Curtis Island LNG projects are being shifted out into the temporary camps. I still think it will be a fairly strong performer over the longer term though with the population predicted to nearly double between now and 2030.

  100. Bad news China is tanking and no one is buying any thing and LNG prices are going down. RE will never be this high again. Go and get some window card from an RE agent so you can show your grand kids who we all got sucked into a credit bubble which is now starting to leak.

  101. I’m amazed, I have to admit. Rarely do I encounter a blog that’s both equally educative
    and interesting, and let me tell you, you’ve hit the nail on the head. The issue is something which not enough folks are speaking intelligently about. Now i’m very happy I found
    this in my search for something concerning this.

  102. Hey Emma,
    What a great achievement this blog is. I love it for its insight and earnest opinion. And you got it revamped! Don’t stop writing.
    Trish (from uni!!)

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