Kevin Hui had a ‘mum and dad’ mentality when he started purchasing property – and he quickly learned about everything that can go wrong.
“I was a very inexperienced property investor. I still had that kind of ‘mum and dad’ property investment mentality in the sense that I wanted to buy something close to home and I bought with my heart rather than my head.
I wanted something that was in my own backyard. Something that I could visit.
My first purchase was in Adelaide. I bought it because it was the biggest piece of land in the suburbs close to me that I could afford.
The process of buying the property was a little bit complicated. I had already found the property by myself. I found it on realestate.com.au and then got a buyer’s agency to take a look at it. The buyer’s agency then looked into the area for me and actually suggested the same property again to me.
I assumed I was getting expert advice, so I went ahead and bought the property. I later found out that this property group was based in Sydney and didn’t actually know the area very well. Moreover, the property group didn’t fully take into account my goals – so the property was bought to fit into a 10-year investment strategy, when actually I just wanted it as a five-year investment.
The land size was 750 square metres. The house itself was 150 square metres. It was a house on stilts – a transportable kind of home.
I got a property manager, but I was very unhappy with the service. I had selected this property management company because when I was renting, one of their managers had been my manager and from that experience I was under the impression that they were a good agency.
They did all their checks to a good standard, the inspections and rental payments were always on time – but as time went by, they got worse and worse. This can easily happen – they start out well to secure your business and build that trust, but then there’s little follow through. They were in a different part of Adelaide and couldn’t give my property the kind of management that it needed. The communication really broke down.
It was only after I changed property managers that I learnt that the property was a complete mess.
I ended up selling this property in January last year. I’ve learnt that you need to buy the right property from the get go, not just keep struggling to manage one that may not be performing very well. It’s all about location.”
3-bedroom, 1-bathroom house
Northfield, South Australia
Purchased: February 2011
Purchase price: $315,000
Loan amount: $300,000
Rent: $295 p/w
Rental yield: 4.79%
Resale date: January 2014
Resale price: $305,000