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Property investor Luke Harris has taken his faith in the market\u2019s historical track record of steady ascent to build a vast national portfolio comprising 29 properties with a total value of $18 million.<\/p>\n
Luke Harris, CEO of The Property Mentors and author of two books on property investing, has taken his faith in the market\u2019s historical track record of steady ascent to build a vast national portfolio comprising 29 properties with a total value of $18 million.<\/p>\n
\u201cI feel the biggest challenge really isn\u2019t about predicting what the market will do, history tells us that over the long term, property will perform well,” Mr Harris said.<\/p>\n
The 41-year-old, who divides his time between homes in inner Melbourne\u2019s Prahran<\/a> and Airlie Beach<\/a> in Queensland\u2019s Whitsunday Region, has centred a significant portion of his portfolio on Victoria, after buying his first in middle class Perth suburb Duncraig in 2000, as well as others in Queensland.<\/p>\n \u201cI hold a number of residential and commercial assets in Victoria, a bunch of properties in Western Australia, including some development sites for the future, and properties in Queensland too,\u201d Mr Harris told Australian Property Investor Magazine.<\/em><\/p>\n \u201cSome of the Queensland properties are also earmarked for development into the future.\u00a0<\/p>\n \u201cThe appeal for these locations has been based around doing due diligence on each area and each property, but also ensuring each property fits into the portfolio with a specific purpose.\u00a0<\/p>\n \u201cThese properties haven\u2019t been sourced with emotion, but with research and by looking at the numbers ensuring that each compliments the portfolio and allows for future growth,\u201d he said.<\/p>\n The move into property that has proven so successful wasn\u2019t always looking so rosy.<\/p>\n Mr Harris said he \u201chated\u201d school and set about starting his own business, spending 13 years in the electronic security industry.\u00a0\u00a0<\/p>\n Financing his first property as a 20-year-old self-employed school-leaver was his first hurdle.\u00a0\u00a0<\/p>\n \u201cMy first property, some 21 years ago was financed on a ‘low doc\u2019 loan and some savings but the banks didn\u2019t like self-employment, so my parents went guarantor on the loan,” Mr Harris said.<\/p>\n Recognising electronic security wasn\u2019t his passion, he sold the business in 2010 and took a mini retirement for 18 months.\u00a0\u00a0<\/p>\n \u201cI spent that time learning about the mistakes I had made in property and formulated a series of systems and processes to help property investors get better results \u2014 what worked and what didn\u2019t work, what do most people struggle with, why aren\u2019t most property investors more successful and how can I help them?,” he said.\u00a0<\/p>\n \u201cIt was then that I set out on my own to start a consulting business to test my processes and after that, formed The Property Mentors.”<\/p>\n Strategy evolves<\/strong>\u00a0<\/p>\n According to Mr Harris, investors can be their own worst enemy.<\/p>\n While always paying attention to market conditions, interest rates and, more recently, COVID, his philosophy is essentially akin to that of a certain shoe company \u2014 just do it.<\/p>\n \u201cI\u2019ll always do it and will continue buying no matter what,” Mr Harris said.<\/p>\n \u201cThe biggest challenges for investors in the years ahead will be the noise getting in the way of their own personal goals \u2014 interest rates will go up and down, property markets will move up, down and sideways, politicians will continue to make poor decisions and the sun will rise and set each day.<\/p>\n \u201cI feel the biggest challenge really isn\u2019t about predicting what the market will do, as history tells us that over the long term, property will perform well.\u00a0<\/p>\n \u201cHaving a mentor by your side is going to be crucial to understating how to interpret all this market noise and apply it to your own situation.”<\/p>\n He said there is no one-size fits all approach to building a successful portfolio and that strategy would change over time in response to markets, performance and personal life goals.\u00a0<\/p>\n \u201cMy strategy is to continue to build a self-sufficient, balanced portfolio that with provide both capital growth and cashflow and in the mix are some development sites that I will park for a period of time but they all fit in with the plan.\u201d<\/p>\n His three most recent purchases have been a diverse mix of commercial and residential bought this year, including a two-bedroom apartment in Craigieburn<\/a> on Melbourne\u2019s northern fringe for $389,000, a four-bedroom house Airlie Beach<\/a> ($695,000) and a commercial property in Prahran<\/a> ($650,000).<\/p>\n Banks and books<\/strong>\u00a0<\/p>\n With the equity his portfolio has built up now, finance is no longer the issue it was as young investor, to the point where he says he seems to \u201calways be in finance offices restructuring or refinancing or for a new purchase.\u201d<\/p>\n He used the big four among Australian banks but also financed through many other lenders.<\/p>\n As the lead author of investment books\u00a0Let\u2019s Get Real<\/em> (published 2018) and Property Fit<\/em>\u00a0(2021), he could be excused for thinking he knew better than those around him. But from astute mortgage brokers to knowledgeable property agents, Mr Harris has always been keen to utilise the skills of industry professionals.\u00a0<\/p>\n \u201cI rely on top-level property managers around the country and they are worth their weight in gold and worth paying their fee,” he said.<\/p>\n \u201cToo many investors buy property and then try and find the cheapest property management service to take care of their asset and really don\u2019t understand that logic.\u201d<\/p>\n The same philosophy applied to buying properties, he said.\u00a0<\/p>\n \u201cI have a great network of people bringing properties to me that are off-market, which means I get to see a lot of deals before they hit the market and our due diligence process at The Property Mentors helps me weed out the rubbish ones quickly \u2014 most of what I buy, is never advertised on the big Real Estate sites,” Mr Harris said.<\/p>\n What\u2019s next?<\/strong><\/p>\n Given his assertion that there\u2019s always another deal around the corner, what was on the radar for property number 30 and beyond?<\/p>\n \u201cI still see Victoria and Queensland population growth continuing in a broad sense but that certainly doesn\u2019t mean that all areas in those states will do well,\u201d Mr Harris said.\u00a0<\/p>\n \u201cPrice points that will do well in the residential markets are in the $450,000 to $650,000 range, as they will appeal to a wider range of buyers and often provide a decent capital growth versus yield ratio to assist with further asset accumulation.\u201d<\/p>\n His property purchases involve looking at more than 100 check points, with some deal-breakers and others influencing price valuation or potential growth.<\/p>\n \u201cAreas with good infrastructure will always have good growth potential however there is an emerging trend towards green and sustainable development, so new developments that have a focus on this will likely do well,\u201d he said.<\/p>\n \u201cThere is no such thing as the perfect property but if we can have eight-star energy ratings, EV ports, smart tech and other innovations without paying more then of course that future-proofs the property and makes it more appealling to a wider range of tenants.\u201d<\/p>\n And beyond property accumulation?\u00a0<\/p>\n \u201cAfter having a mini retirement around 10 years ago, I realised that retirement is never really something I\u2019ll ever do,” he said.<\/p>\n \u201cI do joke about retiring at 45, but before that I joked about retiring at 40.\u00a0<\/p>\n \u201cImagine waking up every day, teaching people how to build wealth and achieve their goals \u2013 what else would I want to do?\u201d<\/p>\n<\/p><\/div>\n