Swimming against the tide

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Adi Budi and his wife Lia made their first property investment “almost by accident”.

“We had to find a place for us to settle after we got married. In April 2009, we made our first purchase with our townhouse in Dundas Valley, NSW, where we still live currently,” he says.

This first buy, their most expensive to date, awakened an interest in the couple, who had already seen their parents build portfolios and were aware of how many wealthy people across the globe had made or supplemented their fortunes with property.

“Property investment was not something that was totally foreign to us, because our parents managed to own a few properties, both here in Australia and overseas. A well-managed property investment portfolio is like a personal small business that won’t fade with the passage of time,” Adi says.

 

 

AT A GLANCE
Years investing: 10
Current number of properties: 5
Portfolio value: $2.69m

 

 

 

With this mindset, he and Lia took the step and bought their first investment property a year later in May 2010 – an apartment located in the suburb of St Marys, NSW. They got the property for an affordable price of only $288,000; since then, it has generated nearly $200,000 in equity. The couple also profit well from the 6.9% rental yield produced by this investment.

“Our key strategy has been ‘buy and hold,’ with continuing rebalancing between the top line and the bottom line. We make sure we always generate sufficient growth to achieve our objective of longterm wealth creation, but we also focus on cash flow for affordability and long-term sustainability. That way, we can weather different economic circumstances,” Adi says.

The couple proceeded slowly but surely with this strategy, waiting another four years before making their next purchase.

Building a sustainable portfolio
With their financials in order, Adi and Lia bought another apartment as their second investment property, this time 45km northwest of Sydney in Kellyville Ridge. This property also came at a reasonable price of under $400,000 and has grown in value by more than $250,000 in the five years since. Adi also gains a 5.7% return from a rental rate of $420 per week.

“We never choose either the top line, which generates growth only, or the bottom line, which just offers high yield. Both factors are meant to complement each other and can co-exist well in order to support a well-balanced portfolio that is sustainable. We definitely need both yield and growth, and so we need to find that sweet spot!” he says.

With their confidence increasing, Adi and Lia decided to try their luck at interstate investing in March 2016 – they bought their first Victoria apartment in the suburb of Carnegie for $421,000. Property number four followed in the same year – their first house investment in the suburb of Willmot. To up the value of this property as well as that of the St Marys unit, Adi is considering redeveloping them to maximise their appeal in the long term.

“Both the St Marys unit and the Willmot house have every chance to capitalise on the massive growth in the area due to the completion of the Western Sydney Airport and the Aerotropolis,” Adi says.

“Making sure that we can hold these properties for the long term is a priority.”

With nearly a decade of property investment experience now under his belt, Adi is also refining his strategy based on current and expected market conditions.

 

 

 

 

 

 

 

 

 

 

 

 

After almost a decade of riding the ups and downs of the property market, Adi Budi can travel and enjoy the rewards of his investments, with the promise of a comfortable financial future ahead of him

“In the next 12 to 18 months we will focus on consolidating our portfolio by taking advantage of the current low interest rate so that we will be ready to expand our portfolio when more favourable market and lending conditions return,” he says.

“When the opportunities present themselves, I am also considering consolidating my portfolio to gear up from investments that are relatively mature and stable at present to something more opportunistic in nature.”

For Adi this means shifting the couple’s focus to pockets that are just starting to get off the ground, in order to capitalise on affordable markets.

Portfolio timeline: 

2009
Newly married, Adi and Lia look for a place to live. They buy a townhouse in Dundas Valley, NSW, which becomes their principal place of residence


This Dundas Valley townhouse was the first and most expensive investment Adi and Lia have made to date, but it piqued their interest in investment properties

2010
Inspired by family and the success of other wealthy people, Adi considers property investment to be a moneymaker. He and Lia buy their fi rst investment property, a unit in St Marys, NSW. Later in the year, they also invest in a unit in Wentworth Point, NSW, with Adi’s brother


St. Marys is a high-growth location, so Adi and Lia are considering redeveloping their unit to capitalise on its appeal

2012
Adi and Lia settle the Wentworth Point purchase, holding off on making new investments in the meantime as they deal with other fi nancial needs

2014
After celebrating the birth of their fi rst child, Adi and Lia go after their second investment as a pair – another apartment in Kellyville Ridge, NSW, that generates high yield


The Kellyville Ridge apartment has increased in value by more than $250,000 in the fi ve years since it was purchased

2016
It’s a boom year for the couple as they snatch up two properties, including their fi rst interstate purchase in the Victoria suburb of Carnegie and their fi rst house in Willmot, NSW


The completion of the Western Sydney Airport and Aerotropolis has led to massive growth in the Wilmot area – something Adi hopes will be refl ected in this property’s value

2018
The Wentworth Point property is sold as Adi and Lia prepare for the arrival of their second baby

 

“My current investments generate high yields – we have owned some of them for many years, and they have grown quite signifi cantly in the past few years. However, we are looking to switch our focus to not-sowell-known areas with significant development opportunities – they are still of good value.”

With an eye on the future
Today, a little over 10 years after they bought that fi rst townhouse, Adi and Lia are the proud owners of a multimillion-dollar portfolio composed of five properties. Adi certainly has no regrets about his choice to invest in property, and believes he has learned a lot along the way.

“It’s a tangible investment – people aren’t experimenting with property, but rather, they want or need it. Because most of us own at least one property or live in a property, we can adapt pretty easily to managing one.”

One of the things Adi has learned is that going against the grain pays off.

“If I could start all over again, I would defi nitely consider being more aggressive in my ‘contrarian’ approach and purposely go against the mainstream market trend by buying where everybody else is either selling or ignoring based on the timing or the area,” Adi says.

“Value can be maximised by exploiting fears – after all, Warren Buffett once said that ‘price is what you pay; value is what you get’. This resonates in property investment.”

He also feels that property has set him up for a comfortable future, and encourages budding investors to press on even when there seems to be no short-term payoff.

“I personally believe that investing in property has its unique characteristics, which can lead to long-term wealth creation that extends all the way to the next generation through its ability to generate passive income and at the same time grow its value over time,” Adi says.

“A big challenge in life is in knowing what you want to do and what you want to achieve. Some things take time, and there will be ups and downs along the way, so you have to soldier on and spend time working on it!”

 

Top Suburbs : ferntree gully , campsie , st marys , belmont , ropes crossing

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