$6.5million On The Road to Success

It’s All For The Family

When it comes to the crunch I guess we all want a financially secure future. Meet Keith Hannah, this month’s successful investor from Western Australia who admits that his inspiration for property comes from the desire to provide a better future for his family. “I am 47 years old and have been happily married for fifteen years to Karyn and we have two gorgeous children, Matthew who is ten and Jessica who is 20 months. I realised that if I didn’t buy a house for my son he would probably never own a property. So that is what first got me to investigate buying an investment property. Now when my children grow up they can pick which house they want and they will have a great start in life”.

And what a great start they have as Keith’s portfolio currently includes ten investment properties, experience with eight renovations and one subdivision/development.

The Value Of Investments

When looking for his investments Keith told us, “I do a lot of research and I look for certain things. You can’t know everything about all suburbs, so you need to focus on one or two suburbs and learn to recognise a good buy and then negotiate hard because you make your money when you buy. For my first investment, I set a price range and looked for a suburb within 15km of Perth. I soon found Kenwick and in 2001 the properties were selling for around $130,000, with rent at about $150 per week. After the sale went through the property was rented out within two weeks and we had bought the property below market value and had $30,000 worth of instant equity. Over a two year period I bought four properties in Kenwick, and another in Gosnells nearby. I then read a book on buying properties in the country and so I bought a house for $63,000 and a whole duplex for $73,000 at a place called Wongan Hills which is 2 ½ hours from Perth. The properties in Kenwick are now worth about $340,000 each”.

Like other Reno Kings graduates, Keith is keen on finding properties which allow him to add value and increase his experience. “I renovate all of the properties I buy and I do as much of the renovation as I can, but I also use trades people such as electricians and plumbers. This way you can achieve a better rental return. I have also started using a Town Planning consultant as recommended by the Reno Kings to obtain Development Approvals which when approved will add great value to a property”.

“This relates to my first subdivision which was purchased this year. In January 2008 I settled on a two storey house on a 2039m2 block at Point Vernon in Hervey Bay. The house is one street from the beach and has ocean views to Fraser Island. The house was totally renovated inside and out with a new kitchen, bathrooms etc. At the same time I used the information I received at the Property to the Max workshop to employ a Town Planning consultant to apply for a Development Application to subdivide the block of land. This was approved six weeks later adding $100,000 to the purchase price of $450,000".

"Renovations to the house also included putting on a huge deck right across the front of the house both down stairs and upstairs as recommended by Geoff and Paul. The rear block is now 1100m2 whilst the house at the front is now fully renovated on its own 939m2 block. The valuation for the property is now $220,000 for the rear block and $550,000 for the house on the front block. Not bad for my first Development and I organised it all from WA only visiting the property twice this year”. 

There Is Always A Learning Curve

When we heard about Keith’s property journey, it sounded like lady luck was on his side. But according to Keith this was not the case as his lessons have come hard and fast and his experience has just been one big learning curve. “I had to sell six of the properties I used to own several years ago as I didn’t understand how to set things up financially. I soon found out that you should only use a finance person who is also a property investor. The same applies to your accountant. I quickly replaced all of the professional people I used with professional people who were also property investors. I have also learnt to only share my property goals with people I know will understand and are supportive. Even though I have ten investment properties and willing share my knowledge, do you think any of my family and friends have investment properties? No, they don’t”.

The Best Strategy

When deciding on the right investment strategy you need to determine the best approach that meets with your particular needs. In Keith’s case he says, “My strategy is to only buy property from motivated vendors who either accept the offer or I buy somewhere else. You have to buy below the median house price for the suburb and it has to be a property that you can add value to quickly such as renovating the house and landscaping or alternatively adding value to the land by obtaining a development approval. My aim is to never sell the properties and I have been educating my son on this point”.

Learning From The Reno Kings

Any investor could become successful in property investing as long as they have the right research and education behind them. Most of the investors we have profiled throughout the year have been big advocates of the Reno Kings workshops and the knowledge they have gained has undoubtedly helped them move forward on their journeys. Keith is no exception to this concept. “I have attended the Reno Kings workshops. The information is very valuable and easily applied. I have made over $200,000 clear profit after costs on the Point Vernon property alone this year as a direct result of using information obtain at the Property to the Max seminar last year. I have been able to do this whilst living in WA even though the property is in Queensland”. According to Keith, “My advice to first time investors is to go to as many seminars on property investment as you can so that you can understand what they are saying. I remember going to the same seminar three times before I understood what they were talking about”.  

Becoming Successful

So how do individual investors measure their success? In Keith’s case, property investing has been a life changing experience. Since he began in 2001 he has been able to accumulate ten properties even though having sold off another six other properties. His property portfolio is now worth over $6.5 million”.

“I was also able to go back to University in 2006 to obtain a Graduate Diploma in Education as I already have a B.A. and now even though I am still involved with computers and IT, I am able to do relief teaching at my son’s school which is great fun. My wife no longer works and I import cars from the USA as a hobby (I currently have four Corvettes)”.

“Most days I do what ever I want. I always remember as a kid watching the Addams Family on TV. I admired Gomez Addams because he never went to work as such and he would make his money on the share market at home. He also loved his wife and family and was always there for them. When I was growing up there were six kids and my mum and dad both worked. When I was eight and my elder brother was ten we used to sell newspapers door to door in Werribee, Victoria. Growing up all the family worked to make ends meet and I thought to myself that when I got older I would be more like Gomez, in that I would be financially secure, be able to do what I like when I like and spend time with my family and I have been able to achieve this now. In five years time I hope to have around twenty properties. My family also have plans to drive around the world in a Winnebago starting in the USA next year.

Keith’s Message to Investors

“My message is that, it is up to you, to look after yourself financially. There are only so many hours that you can work per week and the more you work the more taxes you have to pay. You need to be smarter than that and buy properties as mentioned above. Then you will eventually have financial independence. There is a saying, “ show me who you walk with and I will show you what you will become. Associate with successful property investors and that is what you will become and don’t listen to negative people and they can even be your family”.

“If you want to increase your portfolio, now is a great time to buy and add to your portfolio.

I have just purchased a five acre block of land at Bullsbrook about 35km from Perth and it will settle on the 2^nd January 2009. We will then have our dream house built, hopefully by the end of next year. I am also looking to do a few Joint Ventures with people I met at the last Reno Kings seminar in November”.

Life is sure looking sweet for Keith and his family. You also can take control of your destiny by becoming further educated in property. Keep your eye out in 2009 for more Reno Kings opportunities by visiting www.renos.com.au.