“Screw it, let’s do it.” Richard Branson’s oft-repeated quote sums up the attitude of a man who has built an empire out of risk and trail blazing ideas. The mantra is also the inspiration behind the actions of successful property investor Stephen Courtney, who today sits atop a pile of quality properties located in three different continents.
Stephen’s willingness to dive into the deep end while straight out of university in beautiful Cape Town, South Africa, saw him rewarded with lightning fast growth on his first property purchase, a two-bedroom, one bathroom unit.
The rise in values between 2000 and 2004 in his home country enabled Stephen to make the most of equity; setting up a snowball effect that has seen him purchase 16 properties in 11 years, 12 of which he continues to hold today.
He attributes his successes to an entrepreneurial spirit, which gave him the guts to take the plunge and the ability to learn from some pretty significant mistakes. He has made many deals happen, while friends and colleagues sat safely on the sidelines. Of course, a degree in business science and a following career as a consultant helped ensure that his risks were always carefully calculated.
Growth Cape-ability
When Stephen finished his business degree at university in Cape Town, back in 2001, the South African property market was at a very important stage. Previously out of range for much of the population, investment had recently become affordable.
“Interest rates in South Africa were very high in the late nineties, around 17.5%,” says Stephen. “These gradually decreased to around 13% in 2000, then later, to around 10% by 2005. That’s still exorbitantly high when compared to Australia, but to South Africans, that’s pretty good.”
Stephen says that as rates came down, the demand for property grew and as a result, values began to climb significantly.
“Property boomed from 2000 onwards, with the values doubling every two to three years,” he says. “No one at the time knew that was going to happen, so it was a stroke of luck that people bought when they did. I had friends who were looking to buy, but never ended up getting in.”
Stephen’s strategy was to get into the market through an affordable property, which he would initially live in.
“One to two bedroom units in townhouse complexes were going for between R300,000 and R400,000 (rand), while proper houses with gardens, garage and pool cost between R1.5 and 2.5 million,” Stephen says, noting that like today, one Australian dollar was worth around eight rand.
After going ahead and purchasing a two-bedroom unit, it was not long before Stephen was rewarded.
“Cape Town had more of a boom than the rest of the country,” he says. “I ended up getting a job in Johannesburg, so had to move soon after buying the unit. I bought it for R320,000 and sold it for R640,000 18 months later. The sudden equity enabled me to buy more and kick started my property investing.”
Just before leaving Cape Town, Stephen lost the opportunity to buy an off the plan unit that he had paid a R40,000 deposit on six months earlier, when the developer decided to convert the bottom floor into parking. He picked up a new permanent place of residence (PPOR) in Johannesburg instead, paying R320,000 for a one-bedroom unit in the suburb of Sunninghill, which he lived in with his wife Ingrid.
The following two years saw Stephen pick up another nine properties in South Africa, seven of which he still owns. Two were sold during the boom to provide equity for his other purchases.
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