Single Australians face an uphill battle to buy even their first home. But a woman who managed to build a $2.3 million portfolio has revealed how she has set herself up for retirement, without the help of a partner.
Audrey Lee, 48, has bought three investment properties as well as continuing to pay off her own home, over the last three years. But it wasn't all smooth sailing for the accountant, who had to get a second job to prove she could afford repayments and even sold her first property at a loss.
Lee, who is based in Mulgrave in Melbourne, told Yahoo Finance how she has bought houses sight-unseen in a different state and off the plan in order to get the best deals.
Audrey Lee had to work two jobs to afford her investment properties. (Source: Supplied)
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Lee chose the interstate properties in order to diversify and minimise risk, with the Queensland market “doing pretty well” at the time.
To this day she has not laid eyes on the properties, one of which was an off-the-plan house still being built at the time of purchase. She hopes to buy another Melbourne-based investment in the future.
So far her only Melbourne investment property is in Mickleham, a suburb in the city's northern outskirts. The current median house price in Melbourne is sitting at $778,892, according to CoreLogic.
Lee used the equity in the home she lived in to buy three investment properties, including this one in Algester, Queensland. (Source: Supplied)
Her two Queensland properties are in Raceview, a suburb of Ipswich and Algester a suburb of southern Brisbane. The houses each cost between $500,000 and $750,000 while the home she lives in set her back $550,000 in 2008, bringing her property portfolio to well over $2.3 million.
“I have quite a substantial amount of equity in my own home. So, I've just been using that and in fact I can pretty much say I've paid off my current home loan as well, but it's just that I've got the money sitting in an offset account,” Lee told Yahoo Finance.
Second job helped raise borrowing capacity
Although securing the deposits for each property was easy enough for Lee, proving to the banks that she could afford her repayments on one income was more difficult.
“I had to get a second job at one point because my borrowing capacity just wasn't enough," Lee said.
"And I really, really wanted to purchase another one. I also got my pay reviewed after speaking to my employer.”
Lee’s second job was initially also in the accounting industry before she swapped it for a casual retail job which she still works to this day, sometimes at the expense of her social life.
“It can be quite tiring having the two jobs. It just means some nights, like Thursday or Friday night, I need to work, and on the weekend as well.”
Lee has often had to give up social time to work to afford her properties. (Source: Supplied)
Watch out for dodgy property seminars
Prior to purchasing her current investment properties, Lee had bought her very first investment after attending a property seminar, a move which turned out to be a “mistake”.
“I trusted them enough at the time to just say: ‘Okay, all right, I'll just do this’. Then later, I realised: ‘This is not such a great decision’. I pretty much sold it within a year. I made a loss on it, but I just wanted to cut my losses early on. “
For her next purchase she turned to OpenCorp who helped her source the investments she now owns.
Get in early
Her most recent purchase was paid for through her self-managed super fund. Lee puts her property portfolio success down to the purchase of her very first property back in 1997, which she sold in 2008.
“The reason I could do it is because I purchased that many years ago and I had built up the equity in my [current] property. I was financially in a position to be able to do it, but I guess not that everyone can do it.”
Lee’s advice to other aspiring property moguls is to get into the market “as soon as you can”.
“The longer you leave it and just sort of procrastinate, it just makes it harder as time goes on. If anyone was in a position where they can invest I would do it, straight away,” Lee said.
Her dream was always to build a property portfolio that would enable her to both live and retire comfortably.
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Michael Beresford, executive director of property and investment services at OpenCorp, said making sacrifices was key to entering the property market.
“If you’re saving for your first deposit, delaying gratification and sacrificing lifestyle for a short time to get into the market sooner will pay massive dividends in the future.”
Financial experts agree with Lee that to afford property - like this home she owns in Mickleham - you need to make sacrifices in other avenues of your life. (Source: Supplied)
Buying alone doesn’t work for everyone
While Lee played the long game in order to start her investment portfolio, Steve Mickenbecker, finance expert at Canstar, said buying property alone doesn’t work for everyone.
“Singles are going to struggle getting into the home loan market a lot more than couples," Mickenbecker told Yahoo Finance.
"The median priced house in capital cities is beyond singles in every capital, some of them can afford medium priced units, but not houses."
However, Mickenbecker said investors are looked on more favourably than owner-occupiers by some banks.
“It’s not difficult to find a bank willing to lend them money. Banks are wanting to attract investors and lending for investments is around 30 per cent higher than it was a year ago.”
He suggests choosing a bank that factors “all of the rental income into repayments”.
