This episode meets Janet Durrant - property manager and director of Top Shelf Asset Management - as she guides us through her journey that’s taken her all around Australia, and how she followed in her parents’ footsteps in property management while building her own portfolio and achieve financial freedom!
Follow Durrant’s journey as she reveals how she began her investing career, overcame the challenges she faced along the way and went on to start her own business!
Durrant is the director of Top Shelf Asset Management, where she and her team manage over 100 properties.
I was working for other people and I think I always had it in my head that I wanted to work for myself and I was a bit, I was sick of getting told no. I had ideas and I wanted to make, implement changes and those sorts of things.
You know the bosses of the company were either not into it or it was restrictive. So I guess I thought stuff this I’ll do it myself.
Making time to develop her business and look after her clients is a daily challenge that keeps Durrant busy.
Every day is really different in the life of a property manager. I'm still at this stage business where I'm both working in it and on it so I do all the day to day tasks of a property manager from rent arrears, lease renewals, maintenance requests, advertising and leasing properties and all of that sort of stuff. But then I also do the business side of things, the business development where I'm going out you know getting new business as well as a marketing and business planning and bookkeeping and all of those fun jobs as well.
Although the company is relatively new, her hard work has already resulted in success.
Ever since July I think I've just got to a stage where I don't really do any marketing it's all referral based and I think I've just got to a stage where I've got enough clients. People are talking about me. People are thinking of me referring me on and yeah it's just really starting to ramp up which is great.
Moving around in her childhood, Durrant got to live all over Australia before settling in Western Australia.
We as a family moved around a lot. I was actually born in Sydney and my dad was in the Navy so, we kind of went Sydney, Melbourne, Sydney, over to Perth, back to Adelaide where dad got out of the Navy. We did actually settle in Adelaide for 12 months, dad said to Mum this is where we're going to be for the rest of our life and then he left the Navy and we moved. I think it was even 11 months later after being there. So then we moved up to Exmouth in WA which was a pretty cool place to spend some of my primary years. Then we moved down to Perth. Then mum and dad kind of moved up to Leinster which is northeast of Kalgoorlie, a closed mining town. And my brother and I went to boarding school in Perth from the age of 12.
While she is still based in Perth, Durrant has done her fair share of her own solo travelling.
Since high school years, I have had a couple of stints where when I was 18 turnings 19 I moved to London for a couple of years. I did the typical Aussie thing go over, get your two-year visa, be a nanny, live in with the family, travel Europe and then I came back here. And then I've done a two-year stint up in Broome, Western Australia as well so I think my parents kind of instilled in me the moving around
As well but I'm pretty settled in Perth now, this is me for the good foreseeable future I reckon, definitely.
Having family in the property managing business gave Durrant the exposure that would lead to her establishing her career as a property manager.
I left school and I went straight into uni. To be honest it probably wasn't the best decision for me. I wasn't ready to go or study’s just not really my my thing.
So I started my bachelor of business at uni. while I was at uni I was actually, my mum was a property manager so I was actually also working showing houses like vacant properties for rental property company she worked for and I didn't do so well at uni.
I was too busy having a good time to be honest then actually concentrating on my studies so I managed to pass the important ones, accounting and economics, kind of into my debits and my credits and my supply and demand. But everything else just wasn't really really my thing. So that's when I kind of decided uni wasn't for me. I deferred and I took off to London for two years.
While the expiry of her visa pushed her to return to Australia, Durrant was ready to plan for her future.
So you can only get a two year visa in the situation that I was in doing nannying. So but I think it was time for me, I was having a really good time over there but I was ready to kind of start working. And I guess preparing for my future. Putting some money away and that sort of stuff. Getting a bit serious about life.
Her hard work and motivation helped Durrant climb the corporate ladder when she returned to Australia, and had been instilled in her from her adolescence.
So I went straight into property management. I worked for a company where I kind of got a property management assistant role which I very quickly moved up to property manager and then eventually moving to manage the department for them in a sort of a short period of time. But I have done a lot of other, I reckon I'd probably been working since I was about 13 because we went to boarding school. Mum and Dad moved to Leinster when we were already at the schools that we were going to be boarding at.
So we didn't really have any friends or didn't go to school in Leinster so we didn't know a lot of people when school holiday time when we would go back up there so we brother and we just basically worked on our school holidays just started whether or not it was waitressing or kitchen hand or I think even cleaned motel rooms like we just did. Yeah just worked at a range of things. At that stage, it was you know five dollars an hour.
She also found inspiration to enter property management from her Dad’s own career path.
Dad got out of the Navy basically he's gone and worked for other companies that, you know Australian Defence Force or a mining company. So when we moved to Leinster he was the town manager. So it was a closed mining town and so you couldn't live there unless you worked there and so all the housing was provided.
So I guess from that point of view he was a bit of a property manager of the town as well so he gave accommodation to people who did the maintenance on or he didn't personally but he organised the maintenance on the accommodation and all of that sort of stuff. Um and now he kind of lectures in maintenance planning.
Motivation from coworkers and a booming housing market gave Durrant the idea to begin her own investing portfolio.
Not long after I started as the property management assistant, I originally got back from London and I was like right I’m going to work hard for six months and then I'm going to take off to Canada but then I started working with basically the company that I worked for.
It was a project marketing company so we would sell the big developments for developers and I would then be the property manager for say 30 out of the 80 in the building or something like that so I'd have to go in and canvass for the new management and release them all out and lots of the people that I worked with they were all buying in these complexes and I think Perth at this stage was really booming.
It was, what was it 2006 about.
And all these guys were buying off the plan and it was settling a couple of years later and they had a whole heap of equity in it and they were all really encouraging on me also getting into property investing so I kind of just got it in my head that I could do this too.
Even with the help of government grants, she still had to overcome the challenges of buying in a seller’s market.
I started looking around for a property to buy. The first home buyers grant was still around at that stage, I think it was seven thousand dollars. So I knew that after speaking to a mortgage broker that my budget that the banks would lend me was about 170000 I think. at that time of year
I knew that that was a little bit over and above my personal budget and what I wanted to spend. So I was just looking around but when, because it was booming I was going to home opens and literally there were 10 people at the home open, three of them were writing up offers on the dining room table right there and then at the first home opened for you know 30 grand more than what the asking price was.
Despite the competition, Durrant was able to finally get her start in property investing.
But I ended up looking at a few different places. Some which I'm actually really glad now that I didn't get in terms of didn't end up putting in an offer or my offer wasn't accepted and my mum was just talking to a friend of hers who happened to say that her dad had a one-bedroom unit sitting vacant.
It had been sitting vacant for two years so it wasn't income-producing for them and he really wanted to sell up and go travelling. So we organised for me to go and have a look at that place and to be honest it kind of turned my nose up at it to start with, until I realized that you know your first place doesn't necessarily have to be your forever home. So I managed to get my first place when it didn't go on to the sales market so I had no, I wasn't competing with other people. We ended up doing it privately. I got it valued, the valuation came in and I think it was 115 to 130 thousand for the property so I ended up offering them one hundred thirty thousand at the top end of the valuation.
Knowing full well that if it went the market it would probably get 160000 just because of the way that the market was going and that there was so much competition.
I got it at the 130 which I was stoked for I think it ends up being actually a really good outcome for the both of us because they just wanted a hassle-free sort of transaction. And I obviously got a good deal in the current market that was working out. I mean he'd owned it for I don't know 20 years or so.
Wow ok can you explain to us what type of property was this?
It's a one-bedroom apartment. Well unit, flat you'd probably call it. 47 square meters. And it's kind of like it is more of a bedsit really because you have to go through the bedroom to get to the bathroom and it's all kind of just on the top floor of a block of 40, 42 units on a really big bit of land. So it's in a suburb called Wembley which is not far from the CBD.
Wimbley has a mixture of million-dollar houses and it has this particular strip Hertzman Parade, which has a number of unit blocks on them which are very multicultural and good renters.
After breaking into the market, Durrant faced challenges of a different kind as she expanded her portfolio.
I think my worst investing moment was when I tried to buy my fifth house. Tried to buy being the operative word. I was living in Broome at the time and just scaling the real estate.com like I did on a daily basis looking for for the next one that I wanted to buy and I came across one in Kalgoorlie actually and I think it was, it was about two hundred ninety-five thousand dollars that it was selling for with a guaranteed grow or government lease.
So you know teachers policies those sorts of things would have been renting it for I think about 450 dollars a week was the rental income on that which I mean yeah yeah I was looking at it and I was going this is too good to be true.
Like why is that you know why is that like that there must be a catch. But anyway I put an offer in and got accepted and then I went through the finance process and my finance actually got declined which was mortifying for me. I was just like oh my gosh that's not cool at all. My finance got declined because I had a let’s say a disagreement with a telco company and I instead of dealing with it and sorting it out and paying the bill or negotiating to pay the bill etc. I forgot about it and unfortunately that put a black dot against my credit history. It was a bit mortifying to find that out because I had moved, I wasn't getting the notifications and those sorts of things to realise that yeah to go through the finance process and they were like oh you've got a black dot against your name. I was like oh my gosh that is not good at all.
Although she was able to work around her credit, other financial deterrents proved to have a silver lining.
I ended up doing a stat dec and explaining the situation and all of those sorts of things. But I didn't quite have 20 per cent deposit or equity so it ended up being that I, I think this is when they kind of started tightening up the rules on lending as well. So it was getting a little bit harder to get money as it is.
But it ended up being I could have got the finance but I would have had to pay mortgage lending insurance which at that point in time I was a bit like no that's not you know as you know it's something that protects the bank it doesn't protect you like some people might think that it does. It's a one-off fee I guess. So in saying that I decided not to go down that road and I wasn't able to go ahead with the purchase but it actually ended up being a blessing in disguise given that the downturn in the WA property market and I've since looked up those properties which have definitely dropped in value as well as the rental return has significantly gone down as well. So although it was my worst investing moment realising that I couldn't get finance for something it actually probably turned out to be a blessing in disguise.
Pushing her boundaries and capitalising on a falling property market led Durrant to realise her potential as an investor.
It was probably when I bought my third property, I was living in Broome at the time and something came up in the same complex that I already had property in. And this guy had obviously he bought it at the peak of the market, started to renovate it, ran out of money. So it was a bit of a shell. So I ended up getting it at a really good price. I think he probably purchased it at about 230, 240000. And I got it for 152 I think it was from him. I bought it sight unseen so knowing I was like oh wow I can do that.
I didn't think I could let go and not to view something before I actually spent that amount of money on it. And then I flew back down to Perth and I gutted the property myself and then project managed the renovation from up in Broome after being down there and checking it all out. So that kind of for me was a bit like oh I can actually do this you know you can actually buy properties under market value, you can actually do a renovation, and add value to it and then rent it out and have a good income-producing asset I guess.
What was the highlight of her experience?
I got a jackhammer.
So you went in there and there
It was so much fun. You're getting all the tiles off the walls, ripping out the kitchen cupboards and those sorts of things. It was yes it was a lot of fun. My big boots and yeah just went in and gutted it, I guess because that's what cost you a lot of money in renovations is the labour so that sort of thing. Although probably in future I'd probably just pay people to do renovations, it was a really great experience for me just to get in there and get my hands dirty and do it.
Looking to the future, Durrant has begun the long process of returning to investing and focusing on her finances.
I haven't gone for another home loan so I haven't purchased anything after that because
I've been changed into being self-employed. So my focus has actually been on my business and getting that up and running. So I'm in a bit of a position now where I'm about to start looking at investing in property again so I'm going through the processes of getting all of that in order so you know doing all the things that the banks want you to do at the moment you know that six months of your bank statements and all of that sort of stuff.
So just you know curbing your spending and making sure that you've got zero dollars on your credit card and all your mortgages are in front and you’re up to date with all of them and all of that sort of stuff.
The Do’s And Don’ts To Finding Financial Freedom With Janet Durrant
Amidst the successes of Durrant’s career, there were some obstacles holding her back in her investing.
I think probably not having the funds to do it to start off with is probably one of the things, but I find with property I on all other levels sort of like business-wise I think I can probably hold myself back from my full potential but property’s just been something that's really just clicked with me. So I guess I just when I started I was like this is what I'm doing just went a bit gung ho and got into it. I'm not a very good saver in terms of my money. So for me when I got the property I'm quite happy to chuck all my money into a mortgage. But you know and pay it off. But to save money it's a lot harder for me so it kind of just made sense for savings I guess. Which is probably not the right way to start it but that's kind of the way that I did.
Focusing on improving her saving habits and working hard to financially secure herself let Durrant pursue her investing goals.
Well, I guess I've always worked really hard. So even if I’ve had a full-time job quite often I had a second job on top of that. I've just always, instead of my focus has been on earning more money I guess so I've always worked really hard and been able to have the income to what’s the word -
To fund, to fund the deposit.
Yeah yeah. So I mean in the first instance I was a bit lucky in that I had I think I only had two thousand dollars to my name to be honest and but this was all low doc loans sort of thing and it was very easy to get money back then but Mum and Dad did gift me and I said that in inverted commas a 20 per cent deposit which I then paid off to them. But obviously, from the banks mind the bank didn't think that I had had to pay that back.
So that's actually how I did get the first one.
Excellent. That's really good advice actually I guess for all listeners out there they can sort of look at it from that point of view and try to get into the market that way too.
Yeah I'm a bit more about like how do I make this happen rather than just sitting there slugging away and trying to save that deposit. I was thinking of other ways.
Being fully immersed in the industry allowed Durrant to learn on the job and from a variety of different sources.
Cause I've been in the industry I guess I speak to property investors on a daily basis so I just think that although I haven't you know been out actively seeking for mentors and that sort of thing I have surrounded myself with people whether or not it's sales reps or business owners that I work with as well as clients that are also property investing. And just speaking to them I guess a little bit like what you're doing interviewing other property investors and just speaking to them working out what not to do and what is a good way to do it.
After working with these sources of inspiration, what’s the best advice she’s received?
I think kind of the buy and hold strategy or the never selling, or selling from a position of power and not selling from a position of weakness I guess has been the main thing that I have listened to and tried to do.
I think that I've seen a lot of people who have, you know obviously in WA, purchased property that might not have been the best purchase and then they’ve had to sell in a market that's in the middle of a downturn and lost a bit of money on it.
I think if you can put yourself in a position where you can ride through those downturns and possibly even buying in those downturns rather than when everyone else is freaking out and selling I think that can go a long way in your investment journey.
I totally agree. It's really I guess being smart about what you do at the end their day and obviously no one can predict the market but just knowing I guess being due diligence is really the key.
Yeah absolutely and doing things like you know the banks at the moment I think they either want you to be in a position where you can actually pay the principal and interest loans on the interest-only loans that you may have at the moment or when interest rates go up to 7 per cent in just having those buffers in place or the strategy in place to obviously have other properties that counter in those downtimes.
Durrant takes advantage of her commuting to continue to educate herself.
I don't really read books but I listen to a lot of audiobooks and podcasts. I think that's been me ever since high school instead of reading the English novels I used to get the audiobooks and listen to them instead. But I do a lot of driving for my job, I currently manage properties that are 60 kilometres north of the CBD and 60 kilometres south of the CBD. So an hour north, an hour south. So I spend a lot of time in the car as well so I see that sort of time as wasted time because you're driving what else are you going to do you can't answer your emails or you know to send your work orders and all of those sorts of things so I may as well be learning during that time.
So I guess Rich Dad Poor Dad is a great one. That one definitely is a good listen. I just recently listened to most of these I listened to a couple of times to be honest.
The Barefoot Investor, Scott Pape, although he doesn't necessarily recommend property investing until at least after you’ve paid off your first home and I guess I was a little bit disappointed at the end of that book that you if you follow everything that he says that you still end up with a government pension. But that has some really good ideas just on money management in terms of where you can save money and potentially invest your money in smart or low-risk areas as well.
It kind of struck me as well, thinking how is it possible to be recommending this when you still have to rely on a pension you know. And I thought we'd be self-sustaining, you know living off your own income from whether it be shares or property in having passive income. What are your thoughts on that? How do you think as investors we should go on a different path to that?
I guess I kind of have always thought that like I don't necessarily believe in handouts and all of those things. I've always had it in my mind that I was going to pay my own way throughout life as well as obviously in my retirement. I guess the book has to cater for lots of different types of people and I guess people on maybe lower incomes or that sort of thing it could get them to a much better position than what they would have gone if they had educated themselves and those sorts of things. But for me, I think my goals are just slightly higher than falling under that threshold where you still do absolutely get the pension from the government. What that is I don't actually know what the threshold is but I guess
I would much prefer that whole thing of you know paying tax still. I mean although there are lots of ways to minimize paying your tax at the end of the day if you are paying tax it means that you are actually earning money you know. So it's not necessarily a bad thing in my mind.
Who would you think this book would be more suited for, then?
Like even if I had 10 years ago listening to the barefoot investor like I think that would have been even more beneficial to me.
So I mean I think it's really great for some younger people like you know when you're just starting out after school and that's just to listen to that and you start a lot earlier. I think you'd be in a lot better position when you come to your thirties when you've got a little bit more life experience and you might want to start something a little bit more risky or you know investment side of things.
Looking for resources for more than just investing has led Durrant to develop her mindset and focus on her mental health.
One I'm reading at the moment. Sarah McKnight, Get Your Shit Together. Yeah. It's all about mental decluttering basically. So it's really really good about just looking after your mind.
Recently I just finished my property diploma so that I could own a real estate company instead of just being a sales rep or a property manager and just the background or the subconsciousness of having those assignments that I had to get done or to finish. I didn't realise what a massive weight on my shoulders that was until I actually finished and then I was like wow I actually feel lighter now. It's not just about you know obviously decluttering your house and things that are around you etc. it’s actually about looking after your mind and just making sure that you're looking after your mental health as well just by doing simple things like not forgetting your keys or your phone or you know lots of very simple things.
Managing finances has been a key attributor to the success of her property career.
I mean working hard has always been my thing and good money and financial management so I probably check my bank account way too many times throughout the day. But I have budgets. I have a cash flow. I know when all my council rates and strata levies and all of that are due on the same particular month and I'm just able to monitor that and make sure that I've got enough money there to you know to pay it. And yeah I don't hold myself back in terms of buying like I don't go without things that I want to, still go out to dinner and have my smashed avocado for breakfast, all of those sorts of things. But I can also be frugal with my money as well and manage it well so I know where it's going. When I need to top something up or vice versa.
Driven by securing her financial future, Durrant employed several strategies to acquire her four properties.
Essentially I'm looking to be financially free I guess that is what a lot of people are into. I love to work so I don't think financially free for me is retiring early but it is being about having choices to obviously decide maybe work part-time or you know go on holidays when you want to go on holidays and do all of that sort of stuff just having the choice to be able to do what you want when you want so that essentially is my ultimate aim. I don't think I really started out with a strategy to be honest which is something that I would probably do differently if I started again. But I just kind of got into it and I think I think it's really important to have that management strategy which I think is what I'm building now to make sure that I'm looking at getting a team around me to help me through it you know getting better advice on the lending. So when I first, obviously I got my first loan fairly easily. The second property I did actually go 50/50 with mum and dad.
So we own that one half and half. That's probably something that I might not recommend. Well I mean if it's the only way that you can do it I think maybe it's a good idea as well. But the thing is that the lending they look at it from they take the full debt even though you're only 50 per cent liable for that technically but they only take 50 per cent of the rental income. So for future loans it kind of can put you at a little bit of a disadvantage because it just looks like the return on the investment isn't very good for that particular property when they're looking at lending again.
But I have managed to obviously always have that 20 per cent equity and borrowed on that and borrowed 100 per cent of the purchase price which is how I've done it from one to the next.
By securing her first property, leveraging became a major element in her investing strategy.
So the second one was a joint venture and the next one was using the equity from my first property. So that was good. I think that one you know I purchased it at one-thirty. I only owed ninety-six thousand and it's worth over 200 now so it's doubled in the timeframe so there's a little bit of equity there that I was able to use to purchase the next one and the one that I purchased to actually live in which is now an investment property. I did have to do another strategy where Mum and Dad helped me with being a guarantor for that particular, or a portion of that particular loan.
As she grew her portfolio, the strategy behind the location of her properties began to emerge.
I looked in a number of different suburbs all within 10 15 minutes of the CBD.
I knew I always wanted to be close to the CBD. The first one really was about what the banks would lend me and where I could buy for that amount. The other two I just could see that I was doing really well with the first one that I bought. So we purchased again in those, doing the numbers so basically just knowing that the rental returns were up at about 8 per cent. So they were pretty much, although they were neutral it's kind of fluctuated between them from when we first bought it compared to what it is now. The rents in Perth have definitely decreased in the last few years which makes things a little bit harder. And it's probably something that when I go to purchase the next property I'll think about, plan for you know rents going down and making sure that I can still sustain that cash flow and the differences between the interest repayments and the holding costs and the rental amount. I think most of them you know my one in Scarborough which is 15 minutes from the CBD and close to the beach was getting 400 dollars a week, it's now just reduced down to 310.
Oh wow, that's a substantial drop, how come?
It is. It’s the mining boom I guess and its flow-on effect in Perth. So the ones that I bought in Wembley at the peak were getting 250 to 290 a week. They're now getting 180 to 200 which is a massive drop within itself, for sure. But I've always bought property that is really easily rented so I've had very little vacancy rates.
Also knowing the market and doing it myself. I mean I definitely would recommend getting a property manager but it's all in my day to day normal routine of looking after properties, I just you know look after my own at the same time. But yeah easily rented properties is definitely something high on my priority when I'm looking at a property to buy because you don't want something that's a little bit quirky or it's got a few challenges that you could foresee when people are going in because even though you're in a peak market for rental properties.
When properties are just renting all the time you've also got to look at the downturn where there is an oversupply of rental properties and if yours is not in good nick or has a really tiny kitchen or odd-sized room or know those sorts of things it definitely can make renting it harder and so you can end up with the property vacant for weeks or months which definitely isn't ideal. My priority has been always having income-producing.
By prioritising the quality of her properties to secure her long term financial freedom, Durrant is continuing to develop her strategies to meet her financial goals.
There isn't a particular size amount, I would really ideally like 100 K passive income. With what I've got at the moment I'm very very far away from that unless I've paid down a lot of debt because obviously with the rent decreases I think you know my annual income was just under 60 K a year, it's now down under 50 so the next properties that I purchase will be a lot more strategic to both include capital growth properties as well as good cash flow properties so I can get to that stage.
I mean I have to say it's good that you're able to recognize that because a lot of people buy properties and don't realize what kind of revenue that they're generating from it and they just buy because they know that's an investment to hold on to long term and they will just follow what others do. In no case, changing your strategy up over the next few years, purchasing other types of properties to balance your portfolio or to increase your cash flow is good.
Yeah absolutely I think that's the stage that I'm going through at the moment where I'm just listening to so many podcasts and audiobooks and all that stuff and I'm just wishing that I had listened to these you know back in 2006 when I first bought my property. But I learn best doing things so I'm not really a studier. And so unless I really had that experience where I just got in there started buying properties and was working through that process even the offer and acceptance process and the finance process and all of those sorts of things, I think I wouldn't be absorbing all of the stuff that I am absorbing and learning now if I hadn't already had that experience.
So if Durrant met herself 10 years ago, what would she say to herself?
Start learning as in doing some research and have a strategy. I would have said to diversify in not only the types of property that you own but also the markets that you’re purchasing in. So you know for during this downtime in Perth if I had some investment properties in Sydney well like you know my capital growth would be still increasing. While Perth is kind of you know plateauing or not you know not really going anywhere so it wouldn't put you into a position where you’re not in a position to continue to purchase.
So just really having a strategy or a plan in place as well as educating yourself on what best ways to finance it or the types of properties that you are purchasing definitely.
Looking to the future, what is Durrant most excited about in her investment journey over the next five years?
To be honest it's just getting back into it. I deal with property all the time and although I haven't purchased in the last couple of years I haven't stopped looking and I'm just doing research on different areas that I think to diversify in, start purchasing in, getting to know different people and building a team around me.
Like a good mortgage broker and potentially a buyer's agent and you know all of those sorts of things and looking for that investment-grade I guess properties rather than you know your stock standard rentals that I currently have, well three out of the four probably stock standard
The other one is because it was a home that I bought to live in, it's got a little bit of that homeownership appeal which definitely goes a long way when you're looking at both capital growth and the rentability of the house.
So how can listeners get in touch with Durrant?
The best way to connect with me is well my mobile 0409 935 592. I'm also on LinkedIn, Facebook, topshelfassetmanagement.com.au is our Web addresses as well.