Time is an invaluable resource in property investing and 28-year-old Tim Lewinski is proof that starting young will allow for more opportunities for growth.
Lewinski, who will be celebrating his 10th year in the property investing space next year, currently holds 15 properties across Tasmania and South Australia. It might seem like a smooth-sailing journey to get here but Lewinski admits that he grossly underestimated the time, effort, and money it took to complete his first renovation-for-growth project at the age of 19.
"While the property was fantastic and helped me achieve my long-term goals early, it required so much work. Looking back, the work far outweighed my skillset at that time," he says. "Luckily, I was able to lean on friends and family who had traded before. They were able to give me advice and help me when able. It was certainly a learning experience."
Evolving investment strategy
Renovate-for-growth had been Lewinski's core strategy in his early years of investing. When he started investing in Hobart, he thought the only way to obtain equity would be to renovate.
"I was fortunate to buy several properties just before the upswing in Hobart. This, combined with the value-adding strategies I did for some of my early investments, really assisted me in building a large portfolio at a young age," he says. "I saw up to 50% growth in most of my properties in Hobart during this time, allowing me to recycle the equity and go again."
According to Lewinski, first-time investors who are looking to build equity fast can adapt a renovate-for-growth strategy. However, as he learned from experience, this route will take a lot of time, effort, and resources, to run as smoothly as possible.
"If you are willing to do the hard work and spend time on it, it will pay off," he says.
When Lewinski managed to build up equity to fund his next ventures, his strategy evolved to purchasing high-cash-flow properties. His most recent and best purchase to date was a unit block that yields around 10%. With this new approach, he intends to diversify his portfolio into several more states.
"My goal in the next five years is to acquire five more properties, so I am holding 20 properties, all in different states with solid cash flow. While 20 is just a number, this will lead to more travel with my family — perhaps an overseas holiday for an extended period of time," he says.
Changing investment landscape
If there is one significant change Lewinski has witnessed over his nearly a decade of investing, it would be the tightening of the lending space for investors.
"Banks’ serviceability calculators have become far stricter since I first started investing, so, all in all, I would say investing has become more difficult, or at least more obstacles to work through. You have to adapt to changes and revise your strategy when the market and industry conditions change," he says.
The COVID-19 outbreak also has presented some challenges that Lewinski believes reinforce the need for investors to plan for the worst, with economic shocks resulting in tenants being unable to pay for rent and property prices dropping.
"While these are terrible scenarios to think about, I believe it's more important than ever for investors to run these types of scenarios so they can make informed decisions and weigh up all potential risks. I also think it is always important to have a cash buffer in place for a rainy day," he says.
Should recent events discourage property investors from participating in the market? Lewinski believes there are still markets that provide good investment prospects.
Hobart, for instance, still has an active market composed of owner-occupiers who missed out on property when the competition was tight over the last three years.
"I believe that there are many property markets out there performing strongly and there would certainly be an opportunity missed if you weren't to invest in these markets today. If you are comfortable with the numbers, weighed up all the risks and are happy, I would go for it," he says.