Stories of Success! Rita built a huge property portfolio- she shares how

Hello, everyone. It is Jane Slacksmith here. Hello. Especially to the clubbers. Well, as you know, it is March and it is Capital Growth Month. And as we are doing every Friday, we are chatting to an incredible member of our community who has, you know, taken capital growth under their wing and have done amazing things. And no more so than the gorgeous Rita, who I am going to have a chat to. Hey, Rita.

Hi, Jane. How are you going?

Good, good. It's so nice to see your beautiful smiling face.

Thank you, Jane. And yours too.

No, it's funny, we were having a chat earlier and talking all things family, etc. And you reminded me that we were in the middle of a conversation when my son was like three months old. So we have known each other for well over 10 years now.

We have, yes. We had. I met you when you were first starting out, I think.

Yeah. So I would. I think 2005, I became a mortgage broker. So we've got big anniversary coming up. 13 years this year, I think. But it's. So we've been working with each other for all that time and it has just been such an incredible journey in watching your portfolio and your property plans progress and being, and I'm being really humble of being part of that and, and then helping your son and his girlfriend and now wife and your daughter and her husband.

And I'll refer you to friends as well. And. Yeah.

And we've had five grandchildren over the time.

Yeah, four. Four.

Four grandchildren pre empting yeah.

Yeah. I'm sure that there'll be another one along the way.

Well, look, I want to start with just the beginning and what capital growth has meant to you, how many properties you have now and the grand plan. And we'll just go into a little bit of detail maybe on one of those properties.

Okay. Yeah. I started investing way before I met you, Jane, but I never did any good with it. I don't know, I just didn't do any research. I just bought property and thought it would rise in value, which it did. However, I never sort of had that mentality. And then I met you and I had already bought, I think, one investment property after a separation. And you told me about capital growth and not cross collateralizing things, which I already done and things like that. And that was when I actually started taking it more seriously. And you've given me some great tips over the years and I've followed through on just about every single one of them. My most recent tip you gave me was I'd diversified over a few states to spread the Risk a bit. So I was in Queensland, New South Wales and South Australia at that time, and I'd always shied away from Victoria. And I had a discussion with you and I decided, yep. I don't know why I never wanted to go to Victoria, but I just never did. So, anyway, I bought a house down there. That was my last investment, and that was about two years ago. And in the last 12 months, that property has shown 27% capital gains in the median price of the area. And I just couldn't be more pleased. It is brilliant. And I don't think I've ever had a house go up that much within that period of time. Although I do have four houses in New South Wales. I have eight altogether. The four in New South Wales includes the one I live in, and they've shown great capital growth over the last few years, especially with the boom. I had to sit on 1, 4, 5 years without it doing much at all. But I was patient. There's a lot of times I thought, this is not going anywhere, this property, I need to sell it. But then I changed that. And then all of a sudden with the Cindy boom, it's now doubled in value since it started, so I've never taken it more seriously in my life. And we're at the stage now where if we sold all of our properties, we could own our own house outright, which is our dream home, and probably have quite a few hundred thousand in the bank to put our feet up a bit. But we don't want to do that just yet.

Success story. And you know what I just love about this, Rita? You didn't have kind of that system in place and you took exactly what we talked about. You followed the steps, you put it in place, had success, but you really did a few extra things. So you know that diversifying across different states. The beauty of that is, number one, you don't get lumped with land tax, you know, altogether having everything in one state. So you minimize some of that land tax exposure, but you also maximize your opportunity to capitalize on the growth when the growth comes. So you've had the New South Wales and Melbourne growth. Arguably, you've got the Brisbane growth to come. You know, all the experts I'm talking to were saying, we've still got Brisbane to move. So it's not like you've got all your eggs in one basket.

No, and that's. That is the beauty of it. I mean, like I said, I didn't really take it seriously until I started having those conversations with you. I started Doing my research about, you know, spreading the risk and, you know, different markets in different states at different times. And, you know, I didn't realize how much was involved in property investing. You know, it's not rocket science but. But there is a bit of thought that has to go into it, you know, to be successful at it. And you're right about the land tax. You know, I deliberately stopped buying houses in New South Wales because that would push me over the threshold, which, you know, I'm very conscious of that. And also I am in a high tax bracket. So my main criteria has been negative gearing, although I have over the years gone into other properties to balance it a bit. My portfolio at the moment is probably mainly capital, sorry, negatively geared. However, I do have a few properties in there that actually earn income to balance it a bit because otherwise my borrowing capacity would have been limited as well.

It's a really good example also because often, I mean, I remember Money magazine used to ask me back in 2007, 2008, 9, they're like, we just want you as the meat and potatoes boring person who says you can have growth and cash flow in a property and I believe you can achieve that with renovation. At the extremes, we had the people who were doing just the positive cash flow and those that are doing just the growth. And I don't think you need to choose, but I think as we mature as investors, we can see that the portfolio itself can actually have some components of growth and some components of cash flow. Exactly what you've done. So South Australia probably hasn't measured up, but that's probably where your cash cow is, isn't it? That balances the whole portfolio.

The South Australia one has not done much. It does earn quite in terms of yield, it is higher than other properties. However, South Australia is much like Queensland, it hasn't seen that growth yet. The beauty of South Australia is that the zoning was. Change has changed since I bought it. So it is now medium density housing, which made the price jump quite significantly. So it's not about just about capital growth. It's sometimes about the position that you're buying in may be five years down the track where the zoning laws will change and that will significantly impact on the capital growth rather than just the price going up naturally.

And I know you had some initial reservations about Melbourne, but you know, the conversations that we had and the growth potential and population potential that we could see and I think, I hope you don't mind me sharing, we talked a little bit earlier about what happened with the Borrowing capacity changes with apra.

Yes, that stung. It did.

It hurt, didn't it? So we'd organized a mortgage for you. We had this great borrowing capacity and there was, you know, we had the three months pre approval period. So, you know, and let's just say from a certain point of view, $700,000 purchase price. So there was a purchase price that allowed you to buy within these suburbs that, you know, we kind of highlighted in those ripple effects. And, and there was opportunity for potential growth and there was an incredible amount of research and time and that has been spent on that. But when APRA and ASIC actually changed the servicing, we knew that we had the pre approval available for this amount. But we went and did the recalculation on if your pre approval lapses and we have to go back and get a new one. The servicing capacity took you from a purchase price of 700,000 and from memory it was down to like 400,000, which took us another 10ks out, you know, which is extraordinary.

Yeah, yeah. That it really did sting. And we haven't been able to invest. We've bought our principal property since that time with your assistance. And that wasn't that. Arigmarole. Jane. Oh my God.

Anyway, but anyway, we had a baby.

Oh, I'll never do that again. But anyway, someone rings up and says.

I found my dream home. We pull out all stops to make it work. As long as it's not fortunate. Lying.

Well, I'll tell you what, you saved me from a huge financial crash. And you know, I've always thanked you guys for that because you did. I made one silly mistake that I shouldn't have made anyway, besides that, you guys pulled me out of that, which is great. And we're now, you know, reaping the benefits of that. But yeah, the. What were we talking about? Oh, the, the prudential changes. Sorry. Yeah, the prudential changes affected us a lot. And we haven't been able to buy another property since time as an investment because of the changes. So we're crossing our fingers that it does change.

The thing is that you've got a portfolio that has that balance of some yield, some potential development and the growth. But you've also, you've got the dream home that's, you know, done and dusted, but you've got the capacity now to, you know, maximize that growth. As you said, sell off now and pay off the home loan if you wanted to. But why would you, if you can service that little bit extra it's costing you at the moment and still have some growth potential for when the next driver growth comes through.

Well, we're hope, we're keeping our fingers crossed. It's sort of like a tossing, you know, it's so tempting to sell everything and have that which we know we can do but it's when, you know, we go back and forth. But it's the security. Yeah, the security of that. Having that behind us really makes it all worthwhile. For the last 10 years we've done everything we can to maximize the growth. It's worked. Why would we turn around now and sell it all? You know, we are coming up to retirement age, however it's, we're starting to look at that. But if the opportunity arises that we can invest further, we will do it, you know, and we're working towards that. We're renovating our house that we're in in order to capitalise on the value and hopefully by the time we're finished those restrictions would have been relaxed a bit and we can go further with investments.

And I'm so humbled to watch the journey you've been on and I'm just so grateful that you've also introduced me to your children and we've kind of seen James and his wife do what you did just in a shorter period of time.

Right.

So they had investment properties and now have the dream that we've got them.

That's right. Both my son and my daughter are at the stage. My son's 32, my daughter's 30, they both have children, they're both in steady long term relationships, you know, marriages. They're both at the stage at the moment where they could quite comfortably sell their investment properties and maybe, just maybe have no mortgage. And these are on expensive properties in the Sydney area. $1 million plus. Their properties are at the age of 32 and 30. They have friends who haven't, who are still renting, you know, so based on what I've said to them, based on what you've told me and also then your recommendations or tips and that they've been able to do that and that is so reassuring to me that they're not waiting for me to kick the bucket in order to get. Because they're, they're doing their own work, they're doing their own research now and, and you know, and looking at what, where they can go with investment. You have helped them wonderfully. You know, I don't have to worry about my children, which gives me. Oh, you're sweet. You know, Jane, we've always, we've Always relied on you to, you know, help us through. And my kids are just doing so well. I couldn't be happier for them. Beautiful.

And look. Thank you.

Goosebumps. Look at this.

It's pathetic. But, you know, my mission is to help people get rid of their financial worries so they can get on with life and live to their full potential. And it just blows my mind when I speak to people like yourself. And I see it generationally because I just have this absolute belief that if we get it right and we pass on that knowledge to our children, you know, what opportunities are they giving their children as well, with, you know, better schooling or better learning opportunities for them to go, well, maybe I have to put in a little bit of hard work and then I can relax or all my mates are doing it tough and it's just. I'm just so grateful that you can share their story.

Yeah, look, I'm just so grateful for all the help you've given us over the years. You know, I could be, you know, 10 years down the track. Yeah. Yeah, well, I could be 10 years down the track making the same mistakes I was making all through my life, but for the conversation that we initially had, I would be probably making those same mistakes, but I'm not any longer. You know, it's just wonderful to have that financial. And I've always been. My. My father being Italian, was all about financial security. And I have that, you know, no matter what happens, whether, you know, I lose my job tomorrow, whether, you know, an accident happens, God forbid, anything like that happens, I always had that financial security behind me to know that at any given moment I can sell everything and I'll still keep my house, which is the main thing.

Yeah. Look, Rita, the thing is, you did the hard work and you found those properties and you made it work and you applied yourself. And really, if we look at the time frame, I bought my portfolio within six years. You bought your portfolio within a small amount of time. You've got the rest of your life to get on with and a bit of hard work upfront. And no one's saying it doesn't take a bit of effort to find the right location and the right area and the right property to buy, get the right lending set up so that you're maximalist future. But you can apply yourself and make it all happen.

You certainly can. Anyone can do it.

Well, look, I'm going to leave you. I know you're renovating in the hemp.

My children blame you for my renovating addiction.

I knew that was going to be a bad point. Don't worry. I think that's quite good. I think it's wonderful.

There's not. There's nothing I enjoy more than renovating. It's just wonderful.

I know, I know. It's just the transformation that it can make, not just to your life, but to the properties as well.

And to the bottom line.

Exactly. Exactly. Well, look, we'll let you go. Thank you so much for joining us. And Eve, you've been an absolute gift to the community and we're really looking forward to sharing this story with people.

Thanks, Jane. And thank you so much for all the help you've given me and my kids over the years.

It's a pleasure. Okay, I'll let you go. Thank you so much, Rita. Well, that was Rita, just an amazing person and obviously someone we have loved working with. And you know, as I said, this is Capital Growth Month. We want to share with you stories of people within our community that have used capital growth and you know, they have applied themselves. And as you heard, you know, the Trident strategy, know, buying below the market, renovating and adding value and then being in the capital growth area, tried and trusted. You know, Rita's been doing it for over 10 years, since I met her many years ago. And it's just such a gift to have such lovely people within the community. And if you're not in the community and you're not watching this in our your property success club, then why not you should be joining us. And for as little as $10, a donation to charity to get in. And I'm going to give you 10 modules of education that is definitely going to get you. So I really want to wish you all the best. I hope you're getting a lot from this capital growth Month and from the experts and from our wonderful community. All the best. And here is to your property success.