Property profits fund life's unexpected twists

By |

10/01/2019

From a young age Sara Crawford was interested in property, and the lure of moving out of home and being independent from her parents provided the first pull towards real estate.

“I would spend hours absorbing the classifieds. As I was a struggling student, money was tight and it was [difficult] to comprehend that the bulk of my pay would be handed over in rent, paying down the landlord’s mortgage rather than my own,” she says.


AT A GLANCE

Years investing: 11
Current number of properties: 2
(including the couple’s dream home on 17 acres)
Strategy Dual-income: positive cash flow

Although embarking on property ownership was not a reality that Sara could consider at that time, she made a firm decision that her hard-earned money would not be frittered away on unnecessary spending.

“I set about finding the cheapest accommodation I could, and that meant my now-husband Heath and I lived in a rundown rental shanty with uneven floors and holes in the walls, all in an eff ort to save a dollar or two to one day save enough to abandon the rent cycle and secure our own property,” Sara says.

“To say that we raised the eyebrows of our friends is an understatement! They would enter our rental property in utter silence. Compliments on our home were never uttered. We found this amusing, but it also puzzled us why others didn’t seem to get it, and that they were not embarking on their own like-minded journeys.”

Thanks to the couple’s frugal ways, they were able to amass a property deposit in no time. Their first purchase was an ex-housing commission house in the Melbourne suburb of Brunswick West, and it was definitely a case of buying the worst house on the best street.

“It was the first house next to a busy and excessively loud freeway. It was the size of a shoe box and it quite literally smelt of cat wee – it was foul! But we were proud of it and so impressed with ourselves that we had succeeded in purchasing our first-ever home!”

Ugly duckling transformed
Sara and Heath immediately set about tidying their little ugly duckling up, and tipped what little savings they had into a basic cosmetic renovation. “When it came time for us to sell that property in the hope of securing a more spacious home, my parents were convinced that they themselves would have to be the ones to buy it, as they couldn’t imagine that anybody or their dog would be interested in our little home and it’s neighbouring freeway! But much to their surprise, the home sold and we pocketed a small profit,” Sara says.

“We had never considered that investing in property would one day serve as fi nancial insurance for our family when life took an unexpected twist”

“It was from this moment on that we were hooked on what the property market could offer us, in regard to securing our financial future.”

That was a decade ago, and the pair have owned seven investment properties since then, along with an on-site caravan in Phillip Island, which they renovated and turned a profit on.

Though the couple’s initial investments and renovations were all sourced and planned through their own research and due diligence, Sara says they eventually met up with Jane Slack-Smith, who became a pivotal figure in their property journey.

“Jane has been an instrumental tool in my investment process – my connection to Jane all stemmed from reading an article that she was involved in, in your magazine,” Sara says.

“Through investing in property, it has given us the financial security that would otherwise have been unattainable. It has also given us the ability to control our own circumstances. Our initial goal was simply to make financial gains, but we had never considered that investing in property would one day serve as financial insurance for our family when life took an unexpected twist.”

“What a gift it was to be able to not bat an eyelid and say, there is no need for me to work, as my priority of caring for our youngest child full-time was non-negotiable”

When life takes a turn
Back in 2016, the family was enjoying the benefits of having two steady wages supporting their household. Sara had recently returned to work following maternity leave after the birth of their third child.

“Like many families, we had saved and budgeted a float of money to keep our heads above water financially whilst I concentrated on raising our three children, living off just my husband’s wage,” she says.

“We waited until we had spent the last of our savings before I was scheduled to return to work. But just three months into my return to work our youngest daughter became critically ill and has since been diagnosed with a serious lifelong and life threatening condition. I have not worked a day since she was first whisked away in an ambulance and caring for a sick child became our reality.”

Fortunately, as a young family predominantly living on one wage, their property strategy was to invest in homes that would not impact their household cash flow in any manner whatsoever, so a lot of number-crunching was done beforehand.

This led to the couple purchasing their first dual occupancy property in Broadmeadows, Victoria. This comprised a main house as well as two rundown bungalows in the backyard, and Sean and Health renovated the spaces and advertised them for rent. The result was instant positive cash flow of $350 per week.

“We received a fair amount of criticism for this approach, as the belief amongst other investors at the time was that you couldn’t achieve positive cash flow in a capital growth area, but within just four years we sold this property for almost double its purchase price,” Sara says.

“This experience highlighted to us what a relief it was that we had chosen to invest in property, because from that moment we started to utilise the positive cash flow we were earning to top up my husband’s wages. What a gift it was to be able to not bat an eyelid and say, there is no need for me to work, as my priority of caring for our youngest child full-time was non-negotiable.”

Having recently scaled down their portfolio, the couple have now bought their dream family home – a 17-acre parcel of land with a residence on it, on which they have just completed a thorough cosmetic renovation, injecting immediate equity.

However, Sara admits that they would “be silly not to replicate our previous success in property in the future”.

“Our method will most likely remain the same, with a focus on positive income or renovate for profit,” she says. “But for the moment we are just going to enjoy what we have already achieved and take a breather to enjoy our family.”

 

 

 

Top Suburbs : thebarton , dulwich hill , keperra , newcastle , lockridge

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