Meet Infolio’s Clients: Yi-Luen

Infolio Property Advisors present the second in our ‘Meet Infolio’s Clients’ series: carefully curated, editorial-style pieces which allow you to learn about the Infolio experience direct from our clients. Candid, humorous and insightful, you’re sure to enjoy this feature with Yi-Luen – a young Melbourne project manager, property investor and landlord. We met with Yi-Luen at popular Paleo-inspired Patch Café, and enjoyed a morning of  clean eats, saving for deposits and the sacrifices that took him to property ownership.

Infolio: Can you tell me about your property journey?

Yi-Luen: When I signed up to Infolio I had been looking for property for about a year. I was looking for a house or apartment to live in. I had done the scoping of different areas and decided I really liked Hawthorn to move into an apartment there. Over the course of a year I became really frustrated with trying to negotiate prices and go to auctions – I felt let down by the end of each failed negotiation. At the time I was living with my parents, and decided that I just had to get out. I was 26 and I felt like it was difficult to go out – I was living in Noble Park, out in the ‘burbs. So I decided that I should rent – which solved a problem in the immediate. I sat around for a while and got a bit lazy, and then I decided I should get into action – but I didn’t want to go through the process of going to auctions and looking for houses again. So I signed up to Infolio just from their Google reviews. When I met with them I was really surprised at how thorough and efficient they were.

I: Had your previous experience with real estate agents made you have low expectations?

Y: Yes, I had really low expectations. It was always about how the agent lowballed the price to get you to auction, and it would go for $70,000 or $80,000 more than you expected. When I spoke to my Infolio advocate, they told me about all the tricks agents use to stack potential purchasers and I realised that I was part of that process. It was really good to see it from the advocate’s point of view. I suppose it gave me an insight into how the market was manipulated by estate agents. I felt like I was enlightened on what was happening to me this whole time. It was great to understand how the market worked from the agent’s point of view, with Infolio’s help.

I: How long was it between you appointing Infolio and finding a property?

Y:I think it was around three months. They organised everything really quickly – if anything, it was me holding them back, because I had to go to work or reschedule. They tried to organise a few property tours and in the end it was me who couldn’t make them because of work commitments. I think they had a few properties they showed me within the first month or so of appointment, but I think at about two or three months into the process they called me up at 9:00 am and said ‘We’ve found one on the weekend that we think is perfect for you and what you need. Can you come and inspect it this afternoon?’ It was really a drop everything and go look moment. I managed to take time off work – I work in project management for premium sports facilities. I actually got this job after Uni as I didn’t know what I wanted to do, so I went to an employment agent (it seems a bit of a theme for me!) who got me a temping admin job. It turned out I loved it and years later I’m still working for the same business.

I: So you’re not a person who is afraid to consult with experts for assistance, then?

Y: Not at all. I wanted to buy a property with two objectives in place. One was to move out of home, and the second was for the purpose of investment. I figured I could tick one box off by renting, using the whole ‘rent where you want to live, buy where you can afford’ theory. If I was to invest 400,000 in shares I’ve never do it without the help of an expert. By extension of that I thought – how can I possibly invest the same amount of money in a home without getting expert advice?

I: So you saw the apartment that afternoon, and then what happened? Was it a private appointment?

Y: Yes – all my Infolio appointments were private. I don’t remember ever turning up to view a property with anyone else at the same time. They had the inroads to meet with the agents one-on-one. I think what really surprised me was that when we met with the agents, my Infolio advocate knew all them all on a really friendly first-name basis. They weren’t just guys out of a directory – they really knew the agents of Melbourne very well.

I: How do you feel that level of knowledge benefited you when it came to having access to property?

Y: That was the thing I was most pleased about – apart from the in-depth data that they provided me. My advocate knowing the real estate agents gave them a back channel into property that I never had – previously, I always had to go via the front, public channel along with all the other potential buyers. That was really frustrating and made me feel like I was hitting a brick wall. But being able to get access to off-market properties and stock that had just been listed before anyone else got a look-in at them meant that auctions and things like that weren’t such a concern. When I bought my property it was on the market as a private sale – I didn’t have to worry about going to Saturday morning open for inspections or waiting on a call from my advocate to tell me if I’d won a property at auction.

I: Had you had a crack at auction by yourself, and what was the experience?

Y: It was really stressful. I remember the agent saying to me ‘What’s your price range?’ and that sort of thing. Saying ‘That’s really great, we haven’t had anybody in that price range so on auction day I’ll look out for you.’ They’d give me tactics for how to be successful on auction day, but when it came to auction day I realised quite obviously that the agent had told everybody the same thing. There were a few auctions where I was knocked out really, really early – at about $100,000 less than the property eventually sold for. And some where I wasn’t even in contention. There was one where I missed out by a little bit, but I had already gone over my budget because it was an emotional purchase for me. I really wanted it. I bid at three or four and I walked away from all of them just really disappointed. I think with house-hunting – when it’s not an investment – you become emotionally invested. You walk inside and you have your heart set on it. If you’re going to spend that amount of money on something you’d have to be emotionally invested. And I’d build my dreams and life around this apartment that I hadn’t yet purchased. It really hurt when I wasn’t able to buy it. You walk around an open for inspection thinking the couch will go here, I’ll set this up like that –  and to walk away having lost at auction afterwards let down and knowing you weren’t even in the ballpark is really disheartening.

I: Without an Infolio advocate’s expertise, do you think you’d still be looking for a property?

Y: Look, I don’t know. I definitely wanted to buy something. I probably would have gone back to what I was doing before, but I realised after talking with Infolio how ill-equipped I was to actually take on the market. In hindsight, one of the properties I bid on probably wouldn’t have been the best decision. My Infolio advocate was really good at explaining everything – he’d be able to answer any question that I threw at him. And because of this knowledge – even if I chose to buy a property on my own next time – I’d be far better equipped to go about it thanks to my experience with Infolio.

I: In that first couple of weeks of working with Infolio – the properties that were shown to you initially – did you feel that they weren’t quite right, or that you weren’t quite ready to purchase?

Y: For my first property tour, I took the morning off work and spent four hours inspecting eight properties – which is really amazing because inspecting two properties on my own usually took the whole morning. I was picked up by my Infolio advocate and taken on the property tour – he even had lunch to give me when he dropped me back at work afterwards! He drove me everywhere. We started off in Caulfield – for my own purposes, I was thinking about buying in Prahran – but because this purchase was for investment they took me from the south all the way to the north. I hadn’t previously considered buying in some of the areas we visited.

I: Where did you end up buying?

Y: In Elwood – which was another place I wouldn’t have thought of buying in because I thought I’d be priced out. It was only because of Infolio I was able to purchase a property in Elwood – without them I’d never have even looked there or negotiated a price that suited me. My advocate picked me up and we went on a tour of multiple properties. It was really good to learn about Pascoe Vale and Ascot Vale – in those suburbs you can get a two or three-bedroom unit for the same money you might buy a one-bedroom apartment for in St Kilda. He explained to me about growth areas where the Government is investing in additional infrastructure, and how people would be moving to these areas. My advocate told me about what was desirable in a property, and what wasn’t so desirable.

I: Did that information make you feel confident?

Y: It really did. While I’d narrowed my own parameters to a small pocket of the South-East, my advocate showed me most of Melbourne in a way that I’d never have looked at it myself.

I: With all this information and expertise under your belt, were you ready to make a decision to buy the apartment in Elwood on that Monday afternoon?

Y: I think so. If it wasn’t for that first day of seeing property of all kinds all around Melbourne, I probably wouldn’t have been comfortable.

I: When you saw the property you now own, did you have any emotional response?

Y: I really wanted it, and I knew it would perform. To me, buying in Elwood was a prestige area I never thought I could access.

I: First home ownership is a contentious topic, often viewed through a negative lens. Many think it’s impossible for first home buyers of today to enter the market. What do you think about the public perception versus the reality of your own experience?

Y: A tough question. I don’t really know. To me, the main difference between owning and renting is just the deposit. That’s the hard part. I lived at home with my parents to save up for that. So I suppose it’s more difficult for people who move to the city from the country to go to Uni who have no choice but to rent somewhere. That robs them of the opportunity to live with their parents and save.

I: That’s pretty much it, isn’t it? The deposit is the real barrier.

Y: I think so – otherwise it’s just money out every week, whether on a mortgage or on rent.

I: During the time you were at home was your goal to buy a property?

Yes, absolutely. I made the sacrifice of losing those three or four years of going out every weekend, of being in town and being able to get home easily. I think for me, when I started thinking about buying a home my ideas about property were quite different. I grew up in a big four-bedroom house with a backyard, and I was looking for something similar. I thought if I can’t get a house, I’ll get a unit. A lot of the early months of house hunting was working out what was important to me. I realised that I only needed a one-bedroom apartment, yet I was looking for a three-bedroom home. I was working in the city, and I didn’t want to have much of a commute. It helps to get into the market when you’re prepared to make sacrifices and to live more efficiently.

I: It took some time for you to come around, then, from the idea of the big home?

Y: It did, yeah. It took a while to adjust to apartment living – I culled a lot. But living so close to the city outweighed so many other things.

I: How do you find being a landlord?

Y: A bit strange. I still don’t feel like it’s really mine – most of the sale of the apartment took place while I was overseas in Japan. I didn’t do the pre-settlement inspection or anything like that – Infolio took care of everything. They found me a solicitor for my contracts. I was off on holidays while everyone else was working hard to settle this home for me! I only ever saw the place once, at that initial inspection. Because I use Infolio for property management services, it was a really seamless transition. They knew everything about me, and about my property. I got a phone call from one of the Infolio property managers who took care of everything. They found a tenant within a week – so in some ways it doesn’t feel like I own the place. It’s just another piece of paperwork that comes through each month.

I: Now that you’ve given property investment a go, do you think that it will become a part of your life?

Y: Previously, I wouldn’t have thought so – but my advocate taught me so much about equity in property and stacking your equity to acquire more. And there’s tax benefits to enjoy too.

I: Sometimes when people are young, they tend to be very emotionally engaged with property. They think a property must be the place they’ll live forever. Sometimes that’s a barrier to their getting into the market.

Y: I agree. With renting, I learned a lot about flexibility. When your situation changes, so too can your housing situation. People used to tell me that what I wanted was a four-bedroom home with room for the kids to run around – but that’s years and years away. I realised that renting was actually what I needed now, so I can adjust how I live and where I live to best suit my circumstances. At this stage I don’t need that ‘forever’ home.

I: Can you tell me more about your experience with Infolio? Would you recommend them?

I think that for me going up against estate agents and the market was really daunting. I’d read a few articles in The Age which made it clear to me that I wasn’t an expert. I was really going in blind, not knowing what I was doing. For agents this is their full-time job – but for me, it was something I did on a Saturday occasionally. While the agents made me feel like they were looking after me, they were actually looking after the vendor. Getting Infolio on board was really good. They were here to represent me and my interests. For a fee of course. But whatever the fee is – a good investment will multiply many times over when it comes to capital gains. And on top of that, Infolio provided advice that I’ll use for the rest of my life. A knowledge of how people invest in property, and why they build their portfolios will equip me better for the future. I was thinking about when I want to buy the next property – I could probably do it on my own. But I wouldn’t hesitate in seeking out Infolio’s services again.