In-Focus with Aliyah Leung
Aliyah Leung, this month’s Woman in Focus, began worrying about her retirement years as a young, single woman in her early 30s. She didn’t see how she would have enough in her Super to retire at the age of 65. That was then. Now the 37-year-old has almost $1 million worth of real estate and a rental of income of $91,000 a year. Her new goal is to retire in her early 40s with the freedom to live the life that she chooses.
After working for a couple of years in London, Aliyah managed to save enough for a deposit on her first home – a two-bedroom unit in Narwee in western Sydney for $205,000 in 2007. She spent about $13,000 renovating the unit, installing a new kitchen, flooring, and air conditioning. It paid off. Just one year later, the home was revalued at $240,000 – $35,000 more than she paid for it. Aliyah still lives in that home which is now valued at $310,000.
After dipping her toes into real estate as a homeowner and successful renovator, Aliyah decided property investing was her path to financial security and freedom. She became engrossed in learning factual information about real estate, reading books and property magazines, and was captivated by success stories.
“I would not listen to anybody who had an opinion but didn’t have investing experience because their information was likely fear-based and wrong, even though well-intentioned.”
Aliyah’s simple but successful strategy was to buy cheap property in a forecasted growth area that would require a makeover, then renovate it and lease it out.
Fast-tracking her Property Portfolio
With an average income of $50,000 a year, Aliyah still managed to save almost $40,000, but wanted to fast-track her property portfolio.
“I knew I had the funds to do one investment property but was hoping for more without having to wait 10 years to build up my savings for the second one.”
An advertisement for Property Secrets caught her eye and after talking to the Director, who owned several properties with a system that worked, she used their buyer’s agent to make her first two property purchases.
She focused on buying properties in the most affordable segments of the Sydney market which were expected to boom over the years. Renovating made the most sense to Aliyah.
“The renovation part is important as it increases the value of the property so that you can approach the bank to release the equity straight after the renovation, enabling you to use those funds for further investment. It also allows you to rent the property at a higher rate and increases your likelihood of getting a good tenant.”
Her first investment property, purchased in 2008, was a three-bedroom house in Tregear that cost $200,000. She spent about $14,000 in renovations. The property is now worth $310,000 (translating into a whopping profit of $96,000) and earns a rental income of $560 per week.
Two years later, Aliyah used the equity from that property to purchase her second investment property – a three-bedroom house in Colyton for $264,115, spending $22,000 in renovations. The property is now worth $370,000 and earns $570 a week in rent.
Using Granny Flats to Boost Rental Income
Aliyah discovered another successful property investment strategy when she wanted to purchase a third investment property, but the banks wouldn’t lend her money because she didn’t have enough income. Her buyer’s agent suggested adding a granny flat to make her properties positively geared as well as increase her income.
The tactic worked. After adding a granny flat to the house in Tregear, it is currently cash flow positive by over $400 per month due to the extra rental income. This improved her financial standing with banks when applying for loans and gave Aliyah some peace of mind.
“If interest rates go up, I probably won’t have to worry for some time because I’ve got that second rental income to help me with the mortgage.”
Aliyah’s Top Three Tips
- Make sure you know your position financially before committing to an investment. You want to have peace of mind knowing you can maintain your lifestyle as well as your investment property.
- Get advice from successful property investors or read success stories in property magazines or online.
- Once you’ve done your research, gathered expert advice, and are able to commit financially to an investment property – don’t procrastinate! Begin looking for a property right away. Taking action will help you become confident and positive about the investment process.
Plans for the Future
Aliyah’s goal is to have at least five more properties in her portfolio within the next five years. She may also dip her toes into property development.
“Property investing has given me confidence in my abilities and a sense of achievement. I want to live the life that I choose. I may retire early or only have to work part-time – or not at all. I’ll have freedom and choices. That’s what I’m hoping for.”