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The Property Investor Playbook
Welcome to The Property Investor Playbook, your ultimate guide to building wealth through property investment. Hosted by Daniel Chadrawy and Lara Osborn, this podcast offers step-by-step insights into growing your financial portfolio through real estate.
Join us as we bring you in-depth interviews with industry experts, successful investors, and everyday Australians on their journey to financial freedom. Learn from those who have successfully navigated the path to prosperity and gain invaluable tips to kickstart your own investment journey.
Tune in to discover the strategies, tips, and secrets to creating long-term wealth through property investments, only on The Property Investor Playbook.
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The Property Investor Playbook
From 29 Properties to Co-Living Success: A Journey Through Near Bankruptcy and Investment Mastery - The Property Investor Playbook
Ever wondered what it takes to build an impressive property portfolio while jet-setting around the globe? Tune in as we sit down with Andre Knott, a seasoned property investor who has owned 29 properties and currently holds six. Andre shares his remarkable journey, including the highs and lows of the property market, and the invaluable lessons he's learned from his ventures, such as the importance of seeking advice from experienced investors and financial planners. You'll even hear about his biggest regret—investing in a volatile mining town—and how that experience shaped his investment strategies.
Discover the innovative concept of co-living, an investment strategy that can offer substantial financial benefits. Andre gives a behind-the-scenes look at his favourite investment—a two-bedroom apartment in South Yarra, Victoria—which serendipitously led to an encounter with tennis star Novak Djokovic. We delve into the balance between expanding a property portfolio and managing cash flow, emphasising that sometimes consolidation is key to financial stability. For young investors, we offer practical advice on the benefits of starting early and seeking guidance from knowledgeable mentors to secure a financially stable future.
We also explore the current state of the Melbourne property market and how investors can capitalise on low prices. Learn how co-living homes, designed to meet the needs of multi-generational families and immigrant populations, offer high rental potential and significant market demand.
Don't miss this insightful episode packed with wisdom, practical advice, and a glimpse into the future of property investment.
Welcome to the Property Investor Playbook. I'm Lara.
Speaker 2:And I'm Daniel. We're going to show you, step by step, how you can grow your wealth.
Speaker 1:Hi Daniel.
Speaker 2:Miss Lara, how are you today?
Speaker 1:I'm good. How are you?
Speaker 2:I'm always good, always positive, always trying to take over the world.
Speaker 1:Always.
Speaker 2:Another day in paradise.
Speaker 1:Yes, yeah, today we have a special guest on.
Speaker 2:Andre. Apparently he's got 29 properties 29? Yes 29, that's um. That's a fair achievement.
Speaker 1:Let's just say that yes, definitely, and he did a lot of it whilst traveling the world. Yep, yeah, no, yeah, he. He said, though, he has consolidated it down to six, which I think is a really important message for investors, that it's not always about um building your portfolio, that it is okay to sell property if there is a specific purpose behind it.
Speaker 2:Um, and yeah yeah, I want to know about. He said that he had one regret, so I want to know what that is and how it's good for us, the learner as well.
Speaker 1:But for our listeners.
Speaker 2:Let's see what's the pros and cons of what he's experienced and let's just rally off it yeah, definitely.
Speaker 1:Um, I'm actually excited to hear from him about co-living. Yep, for me it's a new concept. I don't know about the investment industry, but for me co-living is a new concept, so I'm keen to get his take on it and see how it can fit into people's portfolios, what the benefits are, what the financial gains and whatnot can be, let's get it. Let's go.
Speaker 2:Hey Lara.
Speaker 1:Hey Daniel.
Speaker 3:Andre, how are you today? How are you daniel? How are you lara?
Speaker 1:I'm good nice to have you on great to be here, thank you that's good, I think let's jump straight into it we have a little segment that we do, called fast five. Um, we've got a couple of questions to ask you and you'll have around 30 seconds in total to answer. So see how you go.
Speaker 2:Ready.
Speaker 1:We ready, Daniel.
Speaker 2:Ready, Andre, Ready set, let's go.
Speaker 1:What's your name and age?
Speaker 3:Andre Knott, 47 years young.
Speaker 1:How many properties do you own?
Speaker 3:I've had 29, but I've got six currently.
Speaker 1:Wow, what's your biggest property regret?
Speaker 3:Buying in a mining town.
Speaker 1:What's one thing about you that you have never told anyone? Pass what's your most embarrassing moment?
Speaker 3:my mother calling me a guinea pig when I was about 12 years old, in front of my whole class very nice 30, 36 and I copped it for how long?
Speaker 1:The rest of the year, wow, wow 29 properties you said you owned or have owned.
Speaker 3:Yeah, across a journey of 23 years, I've invested in 29 properties and I've sold up about what? 23 of them and I now own six. I've built what eight properties in that time, including my own family home in Hampton Victoria, and I've got four children, four wonderful girls to inhabit all those rooms, as well as a wife and au pair, if you don't mind.
Speaker 2:Wow, you were investing in property before. It was cool. Yeah, that's amazing. Yeah, you were investing in property before it was cool. Yeah, that's amazing.
Speaker 1:Yeah.
Speaker 2:Tell me about this mining town. So what is the biggest regret of a mining town? So it's good, because myself even, I know there's a lot of people out there who still want to invest in mining towns. What's the pros and cons or what's been your experience there?
Speaker 3:Well, look, I was reasonably young, I there. Well, look I was, I was reasonably young, I, I thought my property portfolio could withstand anything at that time. And uh, and and I, I. But I wasn't prepared for something approximating a 70 drop in property prices. Um, quite, quite literally, mining towns can tend to be uh, boom and bust.
Speaker 3:I, I turned to, I believed some of the my own rhetoric of some of the people I was around at the time and I probably didn't get the right sage advice that I should have. I didn't check with enough people in the industry finance, financial planners, accountants and other property investors. I mean, property investors are probably the best people you could ask. People have been doing it for 20 or 25 or 30 years. They've seen all sorts of up and down cycles. So that was probably my biggest downfall. It almost sent me bankrupt but it didn't quite, and I was able to maintain a steady and decent property portfolio even though that occurred. But I suppose the big plus to the thing that sucks people into these types of investments, you could say, tends to be the massive returns you can make. You know, $2,000, $3,000 a week on a property sounds really nice. Until a year later it might be at $400 or $500 a week and the prices have dropped 60, 70, 80 percent in that time yeah yeah, definitely so I got a question, andre, um just on that.
Speaker 2:What was your out of 29 properties? What's been your favorite property, um excluding family home, that you've purchased?
Speaker 3:yeah, it's interesting that it's probably the very first. That's a good question. It's probably the first I ever bought, daniel. It was a property in Victoria, in South Yarra. It was a two-bedroom apartment. I thought that one day I would live in that house, in that apartment, and I did.
Speaker 3:I liked the area, I got a bit emotionally attached to it. I suppose and you know funny story I actually did get to meet Novak Djokovic because of that. He was staying at a hotel two doors down and he invited me to dinner one day. So it was probably a good thing that I did buy that and live in that at some stage through that journey. But no, I suppose that's personally, but across the journey I think it's been the fact that I've just bought for capital growth along that journey, and capital growth is in decent areas, picking the market as much as I could and diversifying. I've diversified into quite a number of states of Victoria and also into the United States, into New Zealand, even Canada and South Africa, would you believe it across the journey. But so my property experience has been worldwide and vast and varied. You know I've now consolidated a lot of that and been able to now get a reasonable, a very good cash flow off the properties that I've consolidated into my portfolio.
Speaker 1:Yeah, We've spoken a couple of times, Daniel and I, about you. Know a lot of people regret selling property. Is there any of your properties that you regret selling? Or you know, maybe you thought you sold too soon?
Speaker 3:yeah, look, I mean it all. It all depends, right I? I met a I met a client one time many years ago who he said I've got a property problem. I said what is it? He says I I've, um, I've got a bit of a cash flow issue. I said what is it? He said I've got, I've got it might have been 47 properties or something like that. And he said and and I'm finding it hard to make ends meet. I said well, pretty easy solution. You might sell five or ten of them and maybe pay things down a little bit. So I can never do that. I said all right, okay, uh, keep living on food stamps, but anyway, no I what I, what I have found is that there's been a couple of decent capital growth properties one particularly in Carlton North in Melbourne, victoria that I probably sold too soon.
Speaker 3:I probably waited only five years on that and I still saw about $250,000 in capital growth. So it wasn't a bad investment, capital growth. So it wasn't a bad investment. But had I held it for another property cycle or two, dare I say there could have been another one or even $2 million growth in that. And so when I look back on that and see that I actually used some of that capital growth to buy into some mining town property. It hurts a little bit but hey, that's all swings and roundabouts, that's what happens. I think that you get to a point in your property investing career where you go. Well you know it doesn't need to get massive and bigger and bigger. You could actually consolidate it down and take the pressure of the bills away that can start mounting up, and that's what I've done and my wife in order to help put the kids through school.
Speaker 1:Yeah, and definitely the client you mentioned that had 40 something properties. That's a great example of you know. He obviously had that mindset of I need to grow my portfolio, it needs to get bigger, I need to have more properties and he got to a point where he just couldn't sustain it any longer. But he also had the mentality of not wanting to sell.
Speaker 3:Exactly Now. I mean, not everyone's going to go and buy 20 or 30 or 40 properties, you know. But if they buy five or six properties across a 10, 15 year journey and they were to consolidate a couple of those and live off the cash flow in retirement of those other three or four that they hold, that's a nice model. That's a really nice model. It's modest but it's hard working. You still have to work very, very hard in your career to achieve something like that, but if you put your nose to the grind for 10 or 15 years, you can really take some of the pressure off later on.
Speaker 2:While we're on this topic, it is all mindset, hey, it's you if you want to purchase those properties. You just got to be. You got to understand that it's not going to be easy, maybe tough. Like you said, that mining town property almost kind of wiped you out. Um, everyone has that same kind of um vision that if I buy too much I might over capitalize myself. I don't know if I can do this. Everyone's's saying not to do this. So you're getting the right advice and you're a perfect example of it. You've had that life experience. You've had all those properties happening. So now, if I want to ask you a question, what would you tell someone or the younger generation buying their first property? What would be the first advice other than mindset that they need to ensure before they purchase that first property or looking to purchase that first investment property?
Speaker 3:Well, there's obviously this fear of taking action right, and I think people need to get over that fear. I mean, I'm not sitting here in a selling of real estate capacity. I look at all things property-wise, through an investor's lens. Whether it comes the designs of the homes that we build or whether it's the properties that I'm looking to purchase or looking to present and sell to people. I want them to have good capital growth right. So there's a few good design elements in it and there's also location elements that you've got to take into account. But I think the biggest thing that people but I think the biggest thing that people they hold themselves back is the fear of getting in.
Speaker 3:And I would say to people you know, it's not about timing the market, it's about time in the market. The sooner you can do it, the better for you and for your family and for your future family. If you haven't developed a family yet of your own, I mean, I always knew that I was buying for my family. I just didn't have one yet, right, and I knew that one day I would love to have a family, a wife and kids someday and I knew I was doing it all for them. But if I didn't do it.
Speaker 3:The sooner you can get in, the better. And if that means that you've got a big burrow and steal a little bit from friends or family to get there, do it. You know, take the advice of people who know what they're talking about. You know, if you are low on property education and you're all, you're low on time or both of those things, that's when you should be taking the advice of quality mentors and coaches property coaches, so um, and they will steer you into the right directions. Hopefully, you know. Then get a little bit. You know, make sure that you're asking a few, a few people, you know, not just, not just the one person, but um but getting in is much more important than timing the market.
Speaker 3:You need to be time in the market.
Speaker 1:That quote's definitely been consistent probably in every episode and, you know, probably every week. Here we talk about time in the market, not timing the market, and it is. You're right, it's one of the most important things and, as simple as the saying sounds, a lot of people still want to time the market.
Speaker 3:Yeah, look I, I'm not looking to spruik that message at all, it's just what is for me. Um, I, I just I've made every, I've made every mistake a property investor could make. Probably I've made a lot of, probably not every mistake, but I've made a lot of mistakes. I've also made a lot of really good decisions. You're not going to get everything right. That's the thing. If you're trying to get everything right in life or or in property investment or anything um you're, you're probably doing the. It's the wrong thing for you, right, um, but as long as you can, if a bank will give you a loan, they believe in the value of that property If they give you, and if you've got, if you can pick a decent location with a decent design, and then you hold it for the long term, not just.
Speaker 3:I think a lot of people actually sell properties. After about five years they get a little bit worried, um, that things are going to um, I don't know. They get worried that, oh, things haven't gone up enough, I'll just sell it, I'll get out of it that. That was a bit of a dog of a property. And then, over the ensuing two years, things just go wild, they go gangbusters and the the final two years of the seven-year property cycle kick in and they miss it. Someone else's name?
Speaker 1:Yeah, definitely. Look, we've heard a little bit about, I guess, your personal journey so far, but I'm also pretty keen to hear about your industry experience specifically and you know where you're currently working and where you've come from, and then I think we'll jump into a little focus on a specific product after that.
Speaker 2:My favourite topic.
Speaker 1:Yeah, could you tell us a little bit about your industry kind of journey so far?
Speaker 3:Yeah, yeah, no, it's interesting. I actually started. I was actually many years ago travelling around the world. That's how I got access to many different properties in different locations around the world in a previous job in a previous life and what I would do is I would make money overseas and I would then send that back to Australia and then I would make property investments in Australia. My father would help me out with that.
Speaker 3:I really take my hat off to my father. He took me to an auction pardon me when I was seven years old and I didn't know what was going on. And he said to me, andre, I said what's going on, dad? Here they're putting their hands up and the guy up the front he's calling out all these numbers. And dad said you put your hand up like that and it means you want to buy the property. So I put my hand up and the auctioneer takes my bid and then my dad says no, no, no. And then he says, oh, I've got another bid over here. And he bid the property up and my dad had a heart attack and he ended up winning the bid on that. Not against me, but he won the bid and I think from that point on all the way through.
Speaker 3:My dad was a bit of an investor. He was on a school teacher's salary and he did a great job. Mum was a nurse and she had a nurse's salary right. So there wasn't huge money floating around our house. They just made decent decisions, over about a 15-year period bought about four investment properties plus the family home and then over the next 10, 15 years paid them all off and now they've got those to give to us us four kids right in their retirement.
Speaker 3:But I had those early influences and wherever you can get those influences is a good idea right and whatever education you can get along the journey. So I had that early on. But then when I would work out overseas, I'd send my money home. My dad would do the research he would buy. He'd help me buy those properties. I would then come when I came back from working overseas and came into the Australian market. I was looking for an opportunity in property. I thought maybe I would like to be an auctioneer or something or a real estate agent.
Speaker 3:But what I actually got involved with was one of the property marketing company and they were presenting and selling properties all over Australia to clients from all over Australia and helping people make wealth effectively, wealth creation and so I got involved with that and I was in that side of the game for about 10 years or maybe eight years, and then I transitioned, when I met my wife, into the building industry.
Speaker 3:So I'd been selling properties from the building industry but not actually involved in it in building per se, and then my wife got me into that and together she would work at one company, I'd work at another, I became a sales, I was in sales and then I became a sales manager and over time I've been around a few retail companies.
Speaker 3:I then worked in a what's called a wholesale turnkey building company most recently, and then over the last 18 months I was about 18,. Well, nearly two years ago I was asked by the current company, aldrich Homes, to come and be their general manager, where I would set up and take them from being a retail building company dealing directly with consumers or clients to become a turnkey wholesale building company that would deal with marketing people and who would then sell property coaches and guides, who would then go and sell the properties on our behalf. And that was what that company asked me to do, aldrich asked me to do, and so I came into this company and created a whole swathe of designs and we've been revolutionizing things here in Victoria over that journey.
Speaker 1:Yeah, nice, so Aldrich from my understanding, focus on a few different products house and land, co-living, not sure what else.
Speaker 2:Tell me about this co-living. It's a new concept to me as a property investor. All my clients are asking about it. There's a lot of stuff online but there's not really solid info on it. I would love to hear from you and your experience co-living, how it works. How would you explain to someone first-time investor how co-living can actually benefit from being in your portfolio, your first investment property, and just everything about co-living?
Speaker 3:Sure, look, I mean, it's a good question you ask and I'd like to know a bit more about what they're asking. But I'll just start by saying, daniel, that it's a unique concept in the world of property investing. It's where you've got multiple tenants under the one roof, on separate tenancies and with multiple bedrooms, that is, and then multiple bathrooms, and each bedroom has a bathroom, effectively and effectively their own living space. You could say there's a communal living area and a communal kitchen in these co-living designs, and it's really ticking a bit of a box for this housing crisis that we're facing at the moment. We happened upon it. I'd like to say that I designed all this concept. No, not really.
Speaker 3:I designed a thing called multi-generational homes because for so many years I was asked as a sales person and then a sales manager inside businesses I'd been in where a lot of the immigrant population to Australia were asking me for designs where they could have mum and dad, grandma, grandpa and the kids live under the same roof, and in doing so, they said why are there no designs for this? Because you had all these four-bedroom, two-bathroom homes with a double car garage. That's what all the Australian clients wanted, but the demographic was changing and we had people from all sorts of parts of the world wanting to live communally like this. So, but there were no designs out there. So we would go and then design something and create, effectively, a custom design, and that custom design would then end up costing $50,000 more, and then the client would run away because it's too expensive. And I'd say, why don't you design something that we want? And I couldn't get any of the managers or sales leaders or even company leaders to design some of these things.
Speaker 3:So when I came to this company, I thought to myself you know what? That's been out there for so long? We're going to design this. So we created these four bedroom, three bathroom designs and they were 23 squares and they were lovely because they had the extra bathroom. Therefore, they had two master bedrooms, two en suites and one extra bathroom to service the other two bedrooms. And then, when I actually started talking to some of the selling agents who were dealing on the front line with clients, they would actually say to me, uh, that they that, hey, this is the sort of thing that you could put multiple tenants in, so that that is where the concept came from for us. And we then went okay, why don't we, uh, why don't we start designing something that's a little bit more deliberate in that way? And so we started creating these three bed, three bath designs and that's been meeting the 650, 670, 700 000 bracket just beautifully for clientele over the last, uh, last 12 months now so what would you say?
Speaker 2:so someone's buying a 650k co-living property um rental wise, what can they be expecting?
Speaker 3:yeah, good question. So these, these multiple tenancies, there's this gap in the market at the moment because we've got such. In answer, the short answer to your question is between 270 and 300 a week, just depending on the location, uh, or how close to transport it is, which, uh, which suburb or it is in, and that's per bedroom, correct bedroom, per week. So it ends up being somewhere between $750 or $800 and $900 per week per house. Yeah, and so that's kind of ticking. It's ticking a few boxes, because you might think to yourself, well, who would pay $300 just for the one room with a bathroom? Well, if you look on flatmatescomau, there's people lining up for that sort of thing and they're not even purpose-built for that reason.
Speaker 3:Because we've got this housing crisis, we've got rental affordability going through the ceiling. People can't afford $500 a week in rental or $500, $600 for a standard house. They line up in line forever to even get one of those rentals. There's so many other people wanting it too, and then they've got to pay for furniture to go into the house as well. So this is for the market who can afford $300 a week. They come with their suitcase and they move in and they might be there for two or three years and they've got two or three other tenants in the property, with them doing the same thing.
Speaker 1:That's really interesting because you know, I've heard of, you know, dual occupancy or dual key, where there's that multi-generational aspect, where you know there's one family and the grandparents living there. Um, but yeah, to me co-living is a really new concept. But is it a new concept or is it just um, I guess, lesser known in the investment community?
Speaker 3:well, I think I think the thing is it's come about as a need. Uh, from a couple of angles. One it's it's that people are looking for good yields. I mean, investors always look for good yields in order to support the capital growth. The difference is, though, often when you've got high yield, you've got low capital growth, or if you've got high capital growth, you've got low yield, and we see that in the major cities, particularly of Melbourne and Sydney, right, but what this does is because these properties are beautiful homes as well. They're designed so that a first home buyer, or even a second home buyer, would love living in. They could sell for more when they go to auction in 10 years time from now, or 15 years time. If a client's looking to get out of the investment, they're not just going to sell it to an investor. That's the beauty of it.
Speaker 3:So, effectively, you've got a high capital growth possibility with a medium to high cash flow. You know, a neutral cash flow at worst, and that's kind of ticking the boxes in these times of higher interest rates. Interest rates are not always going to be at this rate. The RBA is always huffing and puffing and bluffing that they're going to raise the interest rates. They're not, they're going to go sideways for a while and then they'll go down right, but they won't go down as fast as they went up. Let's put it that way. So, yeah, people are looking for this, uh, this higher cash flow at the same time as being able to lock away a nice capital growth on the property and I think we're getting more.
Speaker 2:Just just between us and our clients here, people are wanting to get more of those dual key, dual investment opportunities. Um, I guess many years ago people were building duplexes in townhouses, before that apartments. Even so, it's like you're getting into having three people in one dwelling. So you look at it as a long-term investment can work very well. And there is a housing supply demand. There's just a whole. It's swinging the whole other way where there is not enough homes being built. So developers and even builders, even local builders, are trying to set up the land they're trying to build. But again, your local agents will have people lined up ready to either rent the property or purchase the property.
Speaker 2:And I think that's where investors just like us can benefit from the co-living concept. I guess the education around it is very minimal, so the more that people know about it and how it works just will make a lot more sense. One thing that I can say that I know everyone's chasing is rental. The rates right now are obviously sky high. People want to have positive cash flow. Now, three years ago, when the rates were two percent, positive cash flow was anywhere so you didn't have to try as hard.
Speaker 1:So now, three, three years later, you've got to look for that new opportunity, yeah.
Speaker 2:So it's like the new trend at the moment. So there's always a new trend in the market. So if you can get into that while it is a trend and it is trending, that's where you kind of get into it or explore that avenue. It may not fit for everyone, but as long as you explore it and understand that need, it's crucial. And we spoke earlier about getting the right mentor, getting the right coach. Myself, I my coach every every morning about life, sport, career gives me that kind of um stable ground as clients and as investors ourselves. We need to keep making sure we're upskilling ourselves. So getting the right mentor who knows this stuff and can help you elaborate on that and learn about it, yeah I think is the key yeah, and what's interesting to me with this concept is kind of combining that um, that immigrant mindset with this new opportunity.
Speaker 1:I suppose is a lot of um people coming in from overseas. They're used to this kind of living. They're used to having, whether it is just their family and multi generations of their family under the one roof or if it's, you know, cousins and aunties and uncles that's the norm for them, you know. So coming here and living in a rental property where they need to pay seven hundred dollars just for them and their partner you know a couple to live is insane, like they. They won't want to do it and in fact I know people, um, uh, that currently do this.
Speaker 1:They're from overseas and the minute they moved you they've moved in with three or four of their friends under the one roof. Now it's not a co-living property, it's a normal property. So there is that, you know, fight for the bathroom or fight for the who's gonna get ready first in the morning kind of situation. So this sort of property would be perfect for them, especially with a lot of students coming in from overseas as well. There's a lot of students coming back. Now that you know COVID's well and gone and behind us. Students are coming back and they also need an affordable place to live. So, yeah, it's a great option.
Speaker 3:There are so many opportunities and I tell you, the concept of it seems quite new, but people have been sharing rooms and houses, like you say, for years. It's been quite makeshift. People want just a little bit more. These days We've got mod cons like mobile phones that are. You know we, we interact with them all day long. You know we, we want, we want a bit of our own space, let's put it that way, right?
Speaker 3:And um, I think that there's different shifts and trend trends in the industry right now in in the whole market, and you're getting a lot more people a bit uh on, let's say it's single for longer, right, and they might not quite be ready to actually embark on their own property investing journey just yet, and so there'll be tenants forever. There'll be contract workers, shift workers Imagine people who you know they need to come and go and they're having to share bathrooms. You know that's not very liveable and the government's not coming up with many solutions. That's the other thing. I've spoken to politicians. I've spoken to people in parliament.
Speaker 3:I actually went to school with a politician in federal parliament and he states that if ever he was sitting in the chair he would be looking to actually get this some form of uh funding from the government, not only to the investors but also for the builders as well, to give incentive to create more of this, because it's not just simply a um apartments where uh people want those in their 20s, maybe early 30s, or again maybe in their retirement years. There's early 30s or again maybe in their retirement years. There's this big window of family time right there in the middle that's totally missing and yeah, so that's what it's kind of it's been used for. We're actually finding that not a majority. Half of the homes that we sell are to owner occupiers. Half of these co-living property these multi-generational properties are to owner occupiers. Half of these co-living property these multi-generational properties are to owner occupiers. The other half are to co-living uh people. So they're so versatile.
Speaker 1:Owner occupiers are buying them just as much as so 50 50 are going to own occupiers. Wow, that's crazy. So even in the owner occupier space, people want their own space, separate to their family or siblings, if they can buy a house with an extra bathroom in it.
Speaker 3:It will sell for more in the future, you know, or it's just more liveable for them, right? So they love these. I actually think the concept of multi-generational and co-living properties are really a big deal and a big part of the future. It's not just because we have them or we sell them. I just think this will become a market that's out of necessity that springs up, but it's actually a desired need or want from a large chunk of our community, our population, especially the immigrant community coming from overseas.
Speaker 1:Yeah, for sure. You mentioned the livability of it. Obviously, the livability of the actual building is really important, but the livability of the location as well. Can you share a little bit about, I guess, how Aldridge Homes looks at the livability of areas that they're building in?
Speaker 3:Yeah, well, I mean again, I'll just say I put my investors hat on, first and foremost, always when we're selecting areas for these designs. I mean, obviously, the further you are from amenities and the further you are from schools and shops and bus lines and train lines and whatever, the cheaper the land is going to be. That's why country land is so much cheaper than city land, right, let's face it. But we would never, ever, select a property or a block of land that we're ever going to package on in an area that's not going to achieve a co-living result. So we wouldn't put that design there if there wasn't a market for it. So we're always looking for, yeah, transport hubs, we're looking for big employment hubs, we're looking for train stations and the like you know.
Speaker 1:So those things are important and there's certain suburbs around Melbourne that we just wouldn't do that in, frankly, yeah, I actually saw I think you might have shared it on LinkedIn recently about Melbourne being the fourth on a certain studies livability scale. Why yeah?
Speaker 3:I mean here's what's been happening in the Melbourne market across the last I guess the last 12 months. Right so well, first of all, across the last three years. Melbourne three and a half, even four years. Melbourne hasn't shown much growth at all since the start of COVID. So at the start of COVID things went quite ballistic in Melbourne. They went through the roof for about a year and then they went sideways. They've been sideways for probably three years, three and a half years since, let's say, during that period, a lot of investors have been piling into other city capitals, so into first of all, sydney.
Speaker 3:But Sydney's got too expensive for a lot of investors. Brisbane is a prime example. Southeast Queensland, wa, perth, south Australia even and Adelaide. These are places where savvy investors got in two, three years ago and they've ridden this nice curve on the way up. But a lot of smart investment groups and coaches and mentors and people who look at the metrics every day, they're saying that well, melbourne's gone sideways for quite a while. It's one of the only last cities in Australia, capital cities in Australia that hasn't jerked upwards across the last three years.
Speaker 3:So therein lies an opportunity and a lot of these groups and people and investors are starting. Savvy investors are starting to pile in because you know, warren Buffett, in investment terms, says have fear when others are greedy and have greed when others are fearful. Right, there's a lot of people who are fearful about jumping into the Melbourne market because they've heard all these horror stories of things going sideways for three years. The clever investors are starting to really really obtain excellent prices on good, well-priced blocks of land that are registered titled. They can actually get in now. They're not having to wait forever and this co-living product in concert with good land property prices that are available to purchase now not have to wait a year or two for your construction to start. It's blending for a really good outcome because if investors get in now, they can ride the next two or three years of growth and they can time the market a little bit. That's my personal belief.
Speaker 2:I'm no sage, but that's just what my experience tells me and I think, um, the whole, uh, just and back to back to your point before, the whole co-living concept or just in general, if you look at sydney, um, look around our areas or nearly anywhere sydney, what's everyone, what's everyone been doing? House, granular, house, granular, house, granular. That's like a co-living opportunity as it is, yeah, without defining it co-living. So what the developers do? They went from that and they saw people doing that. So now, um, dual occupancy properties where you have maybe mom or grandma on the side and kids on the other side, yeah, and then again your shift to co-living. So it's been there, we just never labeled it correctly.
Speaker 2:And now there's smarter and smarter designs with and technologies everywhere you can, you can google this stuff and see this stuff. And I guess that's a question that I want to ask you, andre. How would you, how would you say or do you feel that technology has changed the way co-living has kind of exploded down in melbourne, or just in general? How would, how would you say that, um, technology, just everyone at their fingertips, they can just google co-living opportunities, high rental income. How would you do you feel, what do you see that? Has technology changed the co-living market or just the property market in general?
Speaker 3:I don't think it's the yeah, I think it's the market in general, right. I think, uh, savvy investors know that they can. They can get information at their fingertips quite quickly, yeah, yeah, these days, whereas when I started investing, you had to literally buy the Age newspaper in Melbourne or the Sydney Morning Herald in New South Wales or whatever. You actually had to pour over it for two hours before you on a Saturday morning, before you actually went out there and went from inspection to inspection. It was looking back on it. It's quite funny actually, right, but now you can actually you can trawl through first of all, realestatecom that's become the new the age newspaper, right but then also people who are coaches and guides and mentors. They've had to become much more straight up and down, right. I mean, they actually have to be real about what they educate on. They can't bluff people anymore. They can't lie to people, because they're going to find out. There's just such a plethora of information out there. So I would say that what's really changed is that people's access to the amount of information has given them opportunities to use search terms like high yield properties or high capital growth properties or whatever they want to put in there and, sooner or later, this concept of co-living pops up right.
Speaker 3:There are groups in other states doing it. There's very few in Melbourne that are doing it, and part of the reason very few are doing it in Melbourne is because in Melbourne you're only allowed to have three tenancies under the one roof. You can't have four or five or six. Otherwise it becomes what's known as a rooming house, and that's on a different type of building code. I don't really want to go into the nitty-gritty of that, but all I want to say with that is that if, if you've got a builder that doesn't quite understand it, then you could be going through months and months of planning at council, and that's. That's not what an investor wants. Uh, so we've designed all of our houses to be that way. We, they, they sail through developer approvals, they sail through a council and you get your building permits quick, smart.
Speaker 2:Well, let's explore Co-Living then. I think we hit the nail on the head of how it works, what it is, the trends. I guess the lead-up was always there, we just never saw it and I guess, Andre, you capitalized on that opportunity when you saw the chance and I guess it's trending guys. If you want to know more about it, talk to your property coach expert. Understand how it works. But I think you'll see in the near future, the next two to five years, it's going to be more of a common investment thing, just how duplexes and granny flats are so good to understand it early, before it becomes the common thing.
Speaker 1:Let's just say that A little fun fact for you both. When I first started my career, I worked for a granny flat builder.
Speaker 3:Okay, that's a messy billboard today saying granny flats.
Speaker 1:I still remember I used to. The clients would come in and I would literally be measuring their setbacks, looking at where their sewers are.
Speaker 3:Right, it's difficult to build a granny flat over an easement. I would say I don't think you're going to get much council approval for something like that, so your job would have been very important in that way.
Speaker 1:Yeah, definitely. I'm glad I'm not in that space anymore, though. But full circle, we're back here with co-living. But full circle, we're back here with co-living. Before we wrap up, andre, what would be your top three tips to aspiring investors? I guess that can take a listen to your property journey so far and think where do I start, what do I do? What would your top three tips be?
Speaker 3:This is such a good question. I really think the first thing would be to just make sure number one you're ready for some hard work. Yeah, you've got to get ready. To think We'd all like to say things are so easy, you know, but there's a reality about it, you know. You've got to actually be ready to work hard and it's not because buying a property is hard work as much as it is paying for a property over a period of time is hard work. You know you've got to. You will make some sacrifices, but I'll tell you it is so worth the effort. I didn't know it when I was doing it at the start, but looking back on it now that I've got a family and I've got all the things that I've got, it is absolutely worth the effort.
Speaker 3:So, first of all, get ready to actually have to dig in and do a bit of hard work. Second of all would be second tip would be truly go and educate yourself. Get the advice of people who have been there and done it, yeah, or around people doing it. Um, you do become similar to what people, to the people around you, right? And if you're going to keep keep rubbing shoulders with people who are not doing it, then you will not do it right. So get around people who are doing it, get around people who are educating about it and educate yourself.
Speaker 3:And I think the third thing would be enjoy the process. Enjoy the journey while it's, while it is hard. This is something I learned way, or I took this mindset way, way back, and that was enjoy the process of life, right, because it's it's not going to be necessarily an easy journey. All of life, right. But. But there'll be ups and downs. Don't get too high on the ups, don't get too low on the downs. Do your best to be somewhat level through the process, right, but enjoy that process because, day by day, if you're doing the one percenters better or more of them, those one percenters just grow to be something enormous over time. With the eighth wonder of the world by einstein was compound interest, yeah, compound interest in your, in your capital, but compound interest in your learning, yeah, the amount interest in your learning, yeah, the amount of compounding that can occur. So I don't know if that answered the question or not, but I hope it did.
Speaker 1:Yeah, you did. Yeah, no, that's great. Thank you, and for all our listeners, Be careful who's advised by, though I'll say that.
Speaker 3:I'm probably being quite nostalgic about it. You never know.
Speaker 1:That's all right. You're allowed to be nostalgic after you've had 20-something properties and you've reined it back into six. That's all right. Well, for all our listeners, I guess Liberty Property does have access to Aldridge Homes co-living properties and our team are definitely here to guide and educate and provide some insight on how they could be added to your portfolio.
Speaker 3:Well great, we welcome any of your clients and we'll build a home quickly. We'll build them in well, under six months, typically between four and five months. We'll get it to site quickly and we'll provide a fixed price as well. So we try to give a better build but an easier journey. That's what we do, our best to do.
Speaker 1:Perfect, all right. Well, thanks for your time, andre. It's great to have you on.
Speaker 3:Thank you. Thank you, lana and Lara, and also, uh, daniel thank you, have a good day, thank you.
