Woman in Focus –

Yesterday I was reading a story about women of courage and how in the face of adversity women are able to find an inner strength we never knew we had that moves us from a place of utter despair to  one of moving forward and learning from the experience at hand. The mantra of “taking one step forward and two steps back” is all too familiar with all of us and this month’s Woman in Focus is no exception.

Meet Linda Horth, a 52 year old, married mother of 5 who has accumulated 5 investment properties despite experiencing some rather large setbacks in her life. Linda has stared adversity in the face and has moved forward and this month she shares with us her passion for property.

Linda’s Background

Linda’s first foray into the property market was back in the late 1970’s when she and her first husband bought a block of land in Springwood on Brisbane’s South side. They held onto the property for approximately 18 months when her husband decided he would like to go live in the country & do share cropping. “We sold our block for $12k & went share cropping for 12 months, it was a resounding failure, we lost all our money & had to come back to work in the city”.

However, in 1994 they managed to scrape just enough money together to buy a rundown 4 bedroom property with a leaking pool in Slacks Creek for around $100k. “It was a major pain in the hip pocket,” Linda exclaims. “Eventually we had problems with the old house and weren’t having much success at getting decent tenants in it so we decided to sell. That took a while & we made next to nothing on it”.

In 1995 Linda’s husband was killed in a traffic accident and her world collapsed. “Fortunately he had life insurance and I was able to survive. (I have to say that along with Landlord’s insurance, life insurance is one of THE most important things you can have),” she warns. Like most mothers, Linda’s motive was to provide a secure home for her children and therefore used some of the insurance money to buy a town house close to the children’s school.

“Over the next few years I met and married my second and current husband, Adrian, and we set about raising our collective family of five children. Things were a bit tight in the three bedroom townhouse when they were all home so we decided we would have to buy a house with more bedrooms, so we set about looking for one. We found one we thought would do & carted the troops off to see it. They swarmed all over it & announced that they were quite happy to remain in the townhouse squished in like sardines thank you very much. So we didn’t buy that place, but a 3 bedroom townhouse located about 100 meters from our place came on the market at a very good price, so we bought it for $120K”.

Life’s Lessons

Like most investors Linda has not been without her share of lessons along the way. Once they sold the house at Slacks Creek, Linda tells us, “We put a deposit on a unit in what promised to be a very nice building at Broadbeach on the Gold Coast. It was being built on the site of the old Grand Hotel. When the building was finally completed we were rather disappointed with the finished product so we sold it.  We did make money out of it but I would not recommend buying a unit in a building like that to anyone, the management fees are phenomenal, you have to use their decorators packages and there are so many rules & regulations, it’s enough to drive a person mad”.

“By using the Local paper Real Estate section & realestate.com.au and occasionally word of mouth, we set about buying more townhouses close to us and in small complexes of 6 to 8 units. They are easy to maintain and easy to rent out. The body corporate fees in small complexes are much lower than in larger ones that have pools & gates & managers.  We now have six properties including our own residence and one 4 bedroom home at Algester which is only about 2½ years old and which will give us good tax deductions. Our aim has been to always buy close to schools, shops, transport, an arterial road and within easy striking distance of the city. At Springwood there is also the added advantage of being only 10 minutes from Logan Hospital & 20 minutes from PA & the Mater hospitals & 35 minutes to the Gold Coast”.

Keeping it in the Family

Linda has her own strategy for investing when it comes to finding the right real estate. According to Linda, she keeps her eye out for properties that are keenly priced and in very good condition as they don’t have the time or spare cash to do renovations. However, they do conduct basic maintenance as required such as painting, adding a new stove and dishwasher, replacing blinds if necessary, making sure all taps and toilets are functioning properly and installing water saving shower heads. This strategy falls in line with the Reno Kings philosophy of making money when you buy by finding areas within the property where you can instantly add value. This not only could increase the value of the property but increase your cash flow which is so important especially in the current economic environment.

In order to further cut their costs, Linda and Adrian manage the properties themselves and are happy to share their advice with others. “We use an agent to find tenants (mostly) but we also have a TICA license / membership so that if we need to we can check prospective tenants out for ourselves. All our properties now have excellent long term tenants & are pulling in higher than average rents because we keep them all in tip top condition and if there is a problem either we deal with it immediately or we have a tradesman on site within 24 hours. A network of good reliable trades people is essential and we have found word of mouth is usually the best way to find good people in your area. Always pay your tradies promptly too and you will get good service next time”.

“We would also highly recommend using a company like EziDebit to collect rents. There are a few good reasons but the two most important ones are you have a proper statement of exactly what rent is being paid on each property and secondly the we don’t have to be continually chasing up tenants to collect rent as it is deducted directly from their account & if they are short they get a default payment charge (similar to a bounced cheque fee)”.  

Investing in Property has taken Linda and her family on a whole new journey. “I find that my life is very full & interesting, it keeps me sane knowing that we are doing something to secure our future & that of our children. Our children have also all been encouraged to follow in our footsteps and three of them already have properties, a fourth has finance approval & is looking to buy their first home as we speak. The fifth has just turned 21 & we are working on her with a view to steering her in the same direction”.

Linda’s Tips to Investors

• Attend the free Residential Tenancies Authority information seminars; attend as many property information seminars as you can. I have attended a one day Property Women workshop and found it very helpful.
• Educate yourself. Read everything you can on the subject (we subscribe to Australian Property Investor Magazine) and talk to others who have done it too.
• Keep meticulous records of all your income and expenses and find a good accountant who understands property.
• Find a good team of professionals e.g: financial adviser, solicitor & trades people.
• DON’T invest in units in holiday resorts / hotels. The management fees are astronomical as are the body corporate fees.
• Don’t try to buy the most expensive place you see, remember it’s an investment property not your own home so be sensible. When you are looking at a property stay objective & don’t get emotionally involved.
• Make sure you do lots of research on the property. Use the web to help you do researchhttp://www.onthehouse.com.au/ is a very handy site for checking how much properties are worth in a particular area.
• Attend the building & pest inspections & preferably take someone who has a few properties with you & ask lots of questions.
• Check the place from top to bottom. Look for any imperfections that appear to have been covered up. You will become good at spotting things that are not right. Take a note book with you to all the inspections.
• Attend local auctions to get a feel for prices in your area & observe how others let their emotions carry them away.
• Remember the “location, location, location” slogan. Your investment needs to be close to all amenities, shops, schools, transport & arterial roads (not too close to the last one).
• The house has to be appealing to prospective tenants with ample car accommodation, easy to care for yard, plenty of cupboard space. In short all the things YOU would expect in your home.
• Pools are a big no, no; they will always end up costing you money.
• Get started as soon as you possibly can but don’t get yourself into a financial mess. Do your budget, do you due-diligence, have all your paperwork at hand, get your finance pre-approved, ask lots of questions.
• Look for bargains every day, know exactly what you can afford and negotiate hard.