Reno Investor of the Year: Cherylee Stokes

By YIP | 14 Feb 2019

We disliked the feeling of not being in control of the roof over our heads. So we buckled down, ate mince for three months and saved a deposit

For the first seven years of their married life, Cherylee and Colin Stokes were content to be tenants of a one-bedroom granny flat, paying just $110 in rent per week.

However, their landlord’s decision to suddenly sell the property pushed them to begin working towards becoming property owners themselves, in order to secure their living situation.

“We disliked the feeling of not being in control of the roof over our heads. So we buckled down, ate mince for three months and saved a deposit for a two-bedroom unit in Dee Why,” Cherylee says.

Two years later, they made their first profit on property by selling the unit, which helped fund their Beacon Hill principal place of residence (PPOR). In another six months, the couple officially earned enough equity to begin their run as property investors with a two-bedroom unit in Hornsby – an investment they own to this day, and which has housed one tenant for 10 years.

“We target a growth area – not an area that is going to zoom ahead in value short-term, but an area that has good employment opportunities, high rental demand and excellent infrastructure, with more to come and options to add value,” she says.

As parents to two daughters, the Stokes are very careful to keep their finances in check whenever they add to their portfolio.

“We get our ducks in a row when it comes to finance. We keep our overall LVR at 50% or less, including our PPOR, and have a big buffer on hand. All our loans are principal and interest,” says Cherylee.

Years investing: 20
Current number of properties: 7
Portfolio value: $2,225,000

Building value
The main way the couple learned to add value to established properties was through renovation, an avenue that has become their key moneymaker.

“Our strategy is to buy trashed rental properties cheap and do a quick renovation. We then put them back on to the market as rentals and use the gained equity to buy the next trashed property and do it all again,” Cherylee explains.

“We find properties with options to add value. The renovation must have the scope for us to do the majority of the work ourselves.”

The couple executed this strategy when they purchased one of their Cessnock properties. By converting a freestanding structure on the property into a granny flat, they got two rentals from a single home.

“The maximum we have spent doing a renovation is $15,000. We do all the labour ourselves and source bargains along the way. We only call on electricians, plumbers and carpet layers – everything else is our own blood, sweat and tears!”

The Stokes also got the entire family involved as they developed their portfolio further. For a period of four years, Cherylee and Colin would use weekends off from their commercial cleaning business in Sydney to work on their renovation projects, taking their kids with them on weekend trips to the Hunter Valley region.

“We liked the Hunter Valley because of the new Hunter Expressway to Newcastle. We figured that, with the drop in travel time to Newcastle and the increased interest in that area, more people would want a cheaper rental while still being happy to travel the 30 minutes to Newcastle,” says Cherylee.

Portfolio in detail:

Buying blind
The couple made one of their best property deals in this region, a three-bedroom house in Aberdare that they snapped up for a measly $140,000,despite having never seen it before putting down the deposit.

“I had been watching the area as we had just finished a successful renovation. The real estate agent was honest enough to tell me that the tenant in place was a nightmare but always paid the rent. That tenant had knocked the place around, and the owner just wanted out as he was scared of her. The police had already been involved a few times,” Cherylee says.

In spite of the warning, the couple had the agent’s contract signed and the deposit made immediately to keep the house from going on to the market. At the pre-settlement inspection, they finally laid eyes on their new investment for the first time – a cluttered, dirty mess with a kitchen that had even sustained some fi re damage.

However, the Stokes were able to see the potential in the disaster. When the existing tenant refused to shape up, Cherylee and Colin terminated her rental contract and embarked on a $15,000 renovation. They soon had a new tenant in place, paying an increased rent.

In 2014 the couple made their first interstate foray into Queensland, purchasing a unit in Miami on the Gold Coast, which they again bought without inspecting it first. They paid just $87,650 for the unit, and like the house in Aberdare it paid off handsomely with an immediate weekly rent of $280.

“Not seeing a property before purchasing makes the buy all about the numbers,” Cherylee says.

“I love properties under 50 square metres! Contracts fall over all the time and vendors get desperate. The rent well and truly covers the outgoings.”

Maintaining value
Profits aside, the couple’s unfavourable experience with the bad tenant in Aberdare taught them the value of having a good property manager in charge.

“I would never ever self-manage one of my properties. Yes, it’s all fi ne and dandy when there are no issues and the rent is rolling in, but when an issue does arise – and they do – you need a property manager you can count on and one who knows the rules and regulations for that state inside out,” Cherylee says.

“It is a privilege to manage a property, so I expect my property managers to treat my tenants as if they are talking to or dealing directly with me. If they fail my tenant, they fail me, so they get the boot, not the tenant!”

In cooperation with their property manager, Cherylee and Colin also endeavour to keep the cash flowing in their investments by keeping their tenants happy and willing to stay for the long term.

“We are fair with the rent and address any issues immediately, be it a repair or a request to make changes. We allow the tenant to make changes so that ideally the property will suit their needs for many years to come.”


Top Suburbs : balga , new farm , stafford hts , leumeah , alexandra hills


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