Recently divorced, Margaret Fort was heartbroken, cashless and in and out of hospital when she decided to turn her life around through property investing. Now she has her hands on an impressive portfolio that earns her a whopping $236k a year in rental income
When Margaret Fort first arrived at 216 Leake Street its windows were boarded up, the electricity and water were cut off and a gaudy swimming pool was out back, slimy green and clogged up with leaves. Rumour had it that one of the then owners was in jail.
Into this environment she limped, braces across her wrists and in need of a knee replacement, and proudly proclaimed that she wanted to buy the house. Being broke and past retirement age, some might have said she was making a mistake. The way Margaret saw it, she was getting her life back on track.
After divorcing her husband of 33 years, she was coming out of a difficult time. She had experienced numerous health issues and could no longer operate the image consultancy business she had run for many years.
Her divorce had also left her penniless and without a means to support herself. Worse, her self-confidence had plummeted. She found herself directionless and depressed at 60, unsure of her future.
It was only when she decided to attend a 12-month property course in April 2005 that she got any sense of direction. “I had originally been looking at educating myself about shares,” she recalls. “I then found out about a property mentoring course and was convinced to join up. I paid the $8,000 course fee, but I couldn’t really afford it. I didn’t have super and I didn’t have savings. Still, it was worth it. Within three months of doing the course I was buying up property. I had a plan and I knew what to do.”
Fast track to July 2005 and Margaret was at the Leake Street house negotiating her second property deal. Although her divorce had left her in a precarious financial situation, critically, she still had the house she lived in – worth $600,000. The house was fully paid off, and the banks at the time allowed her to borrow $450,000 off its value.
She used part of that to purchase her first investment property, a three bedroom house in Belmont, a suburb 7km east of the Perth CBD. The vendors had originally asked for $235,000, but Margaret was able to negotiate them down to $215,000.
Spurred on by this early success, she sought a similar property within the area. The Leake Street house was around the corner. What interested her about the property was its size. At 850m squared, she envisaged it as perfect for a subdivision, with a view to possibly developing the land herself.
She also thought, being boarded up and rough around the edges, it would be perfect for a renovation. She settled for $218,000.
The art of the deal
As it turned out, 850m square meters wasn’t quite enough to leave sufficient extra space for the project Margaret had had in mind. Her town council suggested that she try asking her neighbours if they would be willing to sell off bits of their land in order to reach a size suitable for a new lot. She asked the neighbours to her left and right, but both refused. The only neighbour left was the property behind her.
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