A Word From InvestRent's New Neighbour
InvestRent has new a neighbour - Yellow Brick Road have moved in and we're delighted to have such a complimentary business beside us. We were invited by YBR recently to listen to a presentation by Mark Bouris; he was introduced by Andrew Morello. Below is an extract from one of his latest articles - of particular interest is the importance of treating your property investment like a business and finding mentors to help further your knowledge. These are two of the key points of difference that InvestRent have - we're proud of what we can offer to our clients. Read on, I love his mindset and attitude.
Andrew Morello founded his own business at the age of 14, won the first season of The Apprentice in 2009, and is now head of business development at Yellow Brick Road. Throw in the nine properties he owns, and it's a wonder that Andrew has achieved all this before his 30th birthday. How has he done so well at such a young age?
Andrew attributes his success to his parents, who came to Australia on a boat from Italy in the 1950s. He learnt from them the importance of a strong work ethic, and the benefits of investing money.
"I grew up in a household where it was normal to be comfortable with debt," says Andrew. "I realised that only through debt can you grow, and if you want to grow you need to be willing to take on calculated risks."
Choosing real estate over university
When Andrew's father asked him if he was going to university, his response was that he didn't think it was for him."My father was supportive he's a mechanic, and he'd done really well for himself. He could see that I was a hard worker and I was proactive," Andrew says.
"I'm all for higher education, but I think it needs to be relevant. Especially in this day and age, there are a lot of young people doing university degrees for the sake of doing university degrees, or to appease their parents."
Instead, Andrew got into real estate and auctioneering, and ended up joining his brother's business, Thomson Real Estate. This wise career choice resulted in Andrew auctioning more than 1,000 properties. Moreover, in 2009 Andrew tried out for, contested and won Australia's rst season of the reality TV show The Apprentice. Since that victory, Andrew has been head of business development at Yellow Brick Road, working alongside the executive chairman, Mark Bouris.
Chasing capital growth in the city
Two years after buying his first property, Andrew purchased a second property in his beloved Moonee Ponds.
"I always tell people you have to build the equity in your first one, and that's probably the hardest battle because you have to re-educate your spending habits," he says.
Andrew's overall strategy was to build a solid foundation of blue-chip real estate in major cities early in the investment process.
"Generally, when I was growing up, properties performed particularly well within 15km of the CBD. But the location has probably extended further out in the last 10 years, considering the gentrification of Melbourne and Sydney. I always say to people that before they do the speculative stuff such as subdivisions, they should just go and get themselves a two- or three-bedroom blue-chip property. It can always be rented out, you can build good equity off the back of it, and if the market takes a turn for the worse, it's not too volatile. People are always going to need to live there, and you're going to get good yield from them."
Andrew adds that buying an investment property is a big decision, and he is not one to be rushed into making a purchase.
"I like to be able to negotiate better terms for my properties, so I have time to think about what I'm going to do," he says.
Treating investing like a business
Property investors need to realise they are not just property investors; they are business owners, says Andrew.
"Effectively what I have done is get into the business of property investment. That's what I tell people," he adds.
He explains that as soon as you start to treat property investment like a business you can deal with the stress and the drama. This includes the ongoing battle with tenants and things of that nature, which are a little easier because with any business there are going to be challenges. He adds that it's also important to have a diverse portfolio in terms of different suburbs and a range of property types.
"If you buy all of your 10 investments in one apartment building and something goes wrong with that apartment building, you are stuffed," he says.
"Spread your investments out and try three or four or five different suburbs."
At the moment, Andrew is also keeping an eye on the Gold Coast, where he says there has been a lot of time, money and effort spent on bringing it into the 21st century.
"The reason why Gold Coast didn't work is because it's too emotional and has these highs then lows. But now, what's happening is that people are finding homes and investment properties, and they are commuting to Brisbane," he says.
"The Gold Coast is really being seen as a business hub now. There are a lot of people setting up head offices in the Gold Coast, and the Commonwealth Games is happening there."
Anything is possible
Andrew also acknowledges the help he has received from his "phenomenal mentors"."I was very blessed being in the property industry at 18. I met people that owned 30, 40, 50, 60 properties, and I would go and take them out to lunch," he says. I would hear about what their thoughts were and the mistakes they had made. If you want to be successful, you need to sit down with the smartest people in the industry. "