A story that features in Australian property Investors (API), a property investor magazine that is distributed all over Australia and showcases the best of the best in property investment. Read Allan's Story below.
- - Candide Macdonald
At 20, Allan Barrett was a hobby property investor. That was then. This is now…
ALLAN IS 28 years old. He has a portfolio of 10 properties and a real estate company. “I’m a person who loves to work and enjoy the challenge that working brings.”
Clearly. An astute investor knows his market. All of Allan’s properties are in his small home town of Portland in Victoria. “The properties of Portland offer a great rate of return and this will only improve over time,” he says. “The town is growing, will continue to grow, has a strong market for rental properties and will see this expand during the next decade.” Allan wisely bought small first – a threebedroom brick-veneer home in May 2000, for just $72,500. It had been rented and needed a facelift. Allan did the work himself. He pulled up all the carpet, polished the floorboards and painted throughout. When the tenants moved on, he renovated the bathroom, made it an ensuite to the master bedroom and added another; he also built new decking and erected a fence. He now has the property rented for $210 a week and its value is $250,000. These details are provided for a reason. They demonstrate the theme threading through Allan’s portfolio. “It’s rewarding when you get a property that needs so much work and looks brilliant by the time you’ve finished it,” he says. He renovated two almost derelict threebedroom units bought in January 2003, and upped their rental return from $100 a week each to $170. It’s hardly a side effect that he also increased their value from $133,000 (purchase price) to $250,000. Last year, he bought the three-bedroom house around the corner that had a disused milk bar attached. The milk bar was in a horrible state. Allan needed a builder’s help.
Ingenuity, flexibility and a lot of toil (most of it after hours) enabled him to turn the milk bar into a unit and to rent it for $170 a week. The house required less angst to be ready to rent for $180 a week. Bought for $165,000, the site’s value has increased to $260,000 inside a year. A development site presented itself to Allan mid-2003. He bought an age-ravaged threebedroom house on a large block for $90,000. His labours (of love) on it have alreadyearned him 100 per cent profit. It’s currently worth $180,000. Allan’s intention for this property is to build five units on the site five years from now. By 2004, Allan’s confidence had blossomed. Ambition brightly coloured its buds. His next purchase was a potential townhouse development, bought for $115,000 and already worth $195,000. It’s a corner block close to town, on which stands a three-bedroom house, with an attached bungalow that Allan transformed into a fourth bedroom. “My strategy is simple: negotiate hard and seize the opportunities,” he says. While that property’s future is being determined, Allan has thoroughly renovated the elderly house and rents it for $220 a week. Location, location, location. Yes, it matters. Allan’s eighth property has both an excellent position and aesthetic appeal backing his investment in it.
It’s an attractive cottage in a quiet street. Allan removed the disfiguring warts of age and disrepair to allow its beauty to glow. For a purchase price of $145,000 he owns a $210,000 home with large capital growth in its future. Allan’s largest – and most heartfelt – investment was made in 2004. He bought a generous three-bedroom house with two living areas and two bathrooms, as a family home for his parents. His dream was to build a second house on the 1000 sqm acquired. The council had a less expansive vision for the site, however. He now plans to extend the original house. One day, he says, he’ll live there himself. “The location is perfect – behind my business and in the centre of town.” Allan has learned a great deal about property investment ‘on the job’. He’s learned it very quickly. He has been fortunate (or clever) enough to have learned mostly through successes.
This, he knows, is because he’s not averse to workloads others would find arduous. He enjoys renovating. He enjoys mostly the opportunity it offers to maximise both his capital gain and rental income quickly. Obstacles don’t stall him either (renovation plonks these often in his plans). He uses a flexible approach when tackling what must be done. Lastly, and far from least in importance, “just do it” is his credo. “There will always be a thousand and three reasons not to purchase,” he says. “You have to trust yourself. I remember when people were telling me that $100,000 was a ridiculous price for the houses I was considering. Those houses are now worth $250,000”. api