Tom Alexander’s life took an unexpected turn after he finished university.
After spending a year as a ski instructor, he headed back to his home town in Hawke’s Bay.
“My parents had a few rentals that weren’t performing well. So, I – possibly foolishly – put my hand up to try to sort that out. I thought it might keep me out of trouble for a few months.”
He found a NZ$40,000 house in Flaxmere in a mortgagee sale and bought it using savings, then leveraged his equity to keep buying.
Fast-forward seven years and Alexander, now 31, is managing not only his parents’ properties, but also his own.
He’d always had an interest in property investment but, as he learned more about the nitty-gritty of the industry, it turned into a genuine passion.
Kiwi classics in demand
With his new-found understanding of the local market, he realised people were clamouring for good-quality family rental homes, and he saw a chance to supply them.
“I was starting from a point of little-to-no income, so it was about adding value and getting good cashflow right from the start,” Alexander says.
He buys classic Kiwi rentals: three-bedroom stand-alone homes that need a lot of improvement. Tenants love the finished product and banks appreciate the positive cashflow.
Eyes on the future
“Every house you buy, you have to be thinking about how it’s going to help you buy the next one. “Otherwise you find yourself getting stuck very quickly,” Alexander says.
Alexander definitely didn’t get stuck. He amassed many properties between 2011 and 2017, and he now owns 33 rentals.
He hasn’t bought any properties in the past
12 months because the numbers haven’t stacked up, but he admits he’s getting “itchy fingers”.
He’s keeping one eye on the market, but says you don’t have a lot of time to spare when you’re managing more than 60 properties.
Hard work but flexible too
It’s not just full time, “it’s very full time”, he says with a laugh. “You love the New Year’s Eve call-out, when the tenants are locked out of the house.”
He’s caring for so many properties that he’s now hiring someone to help him out part-time with inspections and other regular jobs. His job is occasionally stressful, but Alexander says he enjoys the flexibility of being his own boss.
He and partner Amber have been able to buy a home together, “although that was the last house I bought!”
One of the best aspects of property investment is that there’s no one way to succeed, says Alexander, so you can choose a strategy that suits you.
Get to know your own local market and see if you can spot opportunities, and don’t delude yourself that it’s a passive investment, he says.
“At the end of the day, your tenants are your clients, and unless you’re supplying a good product, you’re not going to be getting a good tenant.”
First published 28 May, 2018.
Story by Amy Hamilton Chadwick
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