'It's not rocket science': Real estate expert shares tips of property market success
By the time Ben Everingham was 24 he’d already bought his first two investment properties.
Fast-forward to 2018, and Ben is 33. He’s already managed to build his dream home on the water on the Sunshine Coast, bought and sold 11 properties in Sydney and Melbourne, and formed his own property investment business, called Pumped on Property.
He’s part of a new generation of financial whiz kids who disagree with the common line that today’s generation will never be able to afford their own homes, given the inflated markets on Australia’s east coast.
“Don’t believe everything you read,” the father-of-two says. He believes it only takes two investment properties to reach the goal of financial freedom, and that you don’t need complex strategies built up by overpaid, underperforming financial advisors.
“It’s not rocket science,” he says. “The major stumbling block for a lot of young people is that we want it all now, we want to be living in palaces on the water.
“But the reality is, to live in the palace on the water you’ve got to gradually work towards that. Start with what you can realistically afford and based on your current position.
“If you want to be financially free, invent the lifestyle that you want, then work towards it over time.”
After graduating from university in Sydney with a degree in business management and sustainability, Ben went into IBM’s global graduate program as a project manager before “following a girl” to Queensland (she’s now his wife and mother to his two children).
He then established Pumped on Property, which is a family affair that also includes his mum, wife, brother and sister.
“We’ve bought $200m worth of property in the past three years through that business for clients with a very simple strategy, which is: buy close to the city, buy quality and buy at the right time,” he says.
“It’s that simple.”
He also believes that getting your first deposit together doesn’t necessarily mean having to sacrifice other aspects of your life – like having fun.
“You can have an awesome time and also work towards financial independence: it’s not one or the other,” he says.
“Move home for 12 months and save a deposit; pay yourself first. Young people tend to spend first and save what’s left over. I bought my first five properties earning $1000 a week. If you earn $1000 a week after tax, pay yourself $300 and then figure out how to live off the $700 you have left.
“Yes, it may take a few years to get a deposit together, but once you start saving, you reach a threshold where you have about $20,000 in your bank account and you’re no longer tempted to dip into it – you look at that and want to see it grow, and that becomes a powerful motivator.”
Ben is happy to admit that at first, he didn’t take his own advice. In his first job after uni, he managed to save $12,000 – then blew it all on a trip to America.
“I needed to go and do that, but then I came back and I was ready to save from there,” he says.
“If you’ve made a mistake and blown all your cash, it’s okay. Start again.”
What does financial freedom mean, exactly? Is it a big house and fancy cars and expensive holidays twice a year?
“It just means you have choices,” he says. “I’m not talking about mansions and Lamborghinis here, either. I’m talking about passive income coming in for the rest of your life regardless of global market cycles.
“A couple of good properties owned outright, providing you with $1000 a week each for the rest of your life, is a really nice place for most people to be in.”
Ben’s top five tips for gaining financial freedom
Pay yourself first: “Put the money aside, then spend the rest, not the other way around”.
Have a clear long-term vision: “How do you want to spend your day in 15, 20 years’ time? Instead of pushing yourself through the next 20 years, you’re getting pulled through it by your dream of the future.”
Have an investment strategy and understand the rules of investing: “Timing is the number one thing you can learn to understand. A great resource for first-time investors is the Herron Todd White Report on timing for the Australian market, which comes out every month on Google. Houses have outperformed units according to Core Logic by one to three per cent in Australia every year for the past 30 years. If you buy houses within 20km of Sydney, Melbourne and Brisbane, history shows these areas outperform every other place in Australia on average.”
Educate yourself online: “You don’t need a financial adviser; those guys are getting smashed by the Royal Banking Commission right now. There are some great YouTube videos, blogs, and podcasts – really cool young people who have a completely different approach to this stuff, who don’t believe you need to have this massive property portfolio. Two investment properties is enough.”
Don’t expect everything to happen right now: “Enjoy the journey; financial freedom might take five years, it might take 15 or 20, but that’s cool if you’re only 20. Imagine being financially free by the time you’re 40.”
