Migrants can successfully build wealth with Australian property by establishing a long term strategy, finding sustainable saving methods and tapping in to personal networks.
KnowHow’s Bushy Martin was recently joined by Aman Sethi on the Get Invested podcast to talk about how new migrants in Australia can kickstart their property journey.
Aman Sethi is a respected role model in the property investing industry, overcoming migrant challenges in Australia to build his successful talent business JICS while amassing a $10M property portfolio in just four years.
Step one: Establish a plan
Initial actions aspiring migrants and investors need to take include establishing a long-term plan.
“I find people generally focus on the little things too much and don’t look at the big picture sometimes. They’ll focus on what’s in front of them and not what’s going to give them the long term benefits or prosperity. So I think it’s just about taking a step back and and looking at it holistically and making decisions that are going to be best for your long term future,” Aman said.
“Another thing is that you should think about future steps as well. So always think two or three steps ahead when you’re planning the journey. So the migrant journey, as I’ve observed and personally experienced, is not an easy one. It’s a journey that, unless you’ve gone on it yourself, it’s sometimes a bit hard to understand, from an external point of view, the trials and tribulations and the small decisions that lead to future outcomes. The fact that there are so many elements that are critical, and if one of the elements break down, that can impact your whole journey and your whole experience. And I think that’s where looking at things from a holistic point of view, having a plan in place, having a one, three, five year plan, for a new migrant, is critical. And I think not enough people come with that plan.
“So I think number one is to figure out what is actually viable for you. Then based on your viability and budget, you need to build a strategy around it in terms of how to best use your borrowing capacity over the next three to four years. And then you work with an expert, or if you’re financially save and are really passionate about property, then obviously you can look at it as an independent as well. So yea, get the financial acumen that you need, and then try and understand the property market and the key drivers and functions that really drive the growth in the long term.”
Step two: Utilise your network and find an advocate
Aman said new migrants can tackle rental shortages and housing accessibility issues through developing and using personal networks within Australia and finding an on-ground advocate.
“There’s no magic magic solution to this problem. I think it’s a case of utilising all the avenues that you have available. So for example with us, we have collaborations in place with a couple of partners who have got extensive housing options across Australia and so for the people that come through us, we obviously we utilise that network to help them get into that first property. If I talk more broadly, it’s about utilising your network, the people in Australia that can maybe help you, because again, when you’re physically overseas, getting that rental apartment application approved can be challenging. And then if you have an advocate on the ground here that’s going to help you, like a friend or a family member that can definitely take the risk or reduce the risk in that process as well,” he explained.
Step three: Find a sustainable saving method
Migrants can successfully save and invest without creating a second job or sacrificing their lifestyle in the process.
“This is a very individualistic type approach that one needs to take. And it’s about doing things that are going to be sustainable in the long term,” Aman said.
“So one thing I see quite often is that people will come up with an extreme idea, and then try to implement that extreme idea, and it rarely works. So that’s where it’s about that consistency and longevity. If I talk a little bit high level, and so creating a plan that you can kind of stick to over a long period of time and it’s likely to not common stock. And I think if they come up with that sort of plan and build from small blocks.
“So as a migrant, it’s rare that you come to Australia and suddenly have that ability to splash out loads of cash. So mostly it’s about saving slowly, building it up slowly and having that, and that’s perfectly fine. And what I would suggest is even if you can get something for 300K or 400K as an investment property, start with that, get going in that direction and you’ll see the rewards in the next few years hopefully.”
Step four: Expand your knowledge
Aman recommended migrants and foreign investors source quality information from experts to boost their property investing know how.
“So I guess for my personal journey, I would say where I started was reading books and listening to podcasts. I was able to learn from other guests and experts like yourself (Bushy) who’ve been in the industry for a long time and have successfully done things,” he said.
“And I was able to share and listen to a lot of different views and different approaches and then make my own decision as to which approach resonated with me and which one I wanted to follow. So that’s a cost effective strategy to build that knowledge. And once you have the knowledge, that’s when you get the confidence and that’s where your risk appetite will also increase.”
Step five: Consider the benefits of rentvesting
While many people are aiming to own their own home, Aman encouraged migrants, investors and home buyers to embrace delayed gratification and consider all financial avenues.
“It’s a tricky one because I guess from a cultural mindset, I understand where people come from in terms of prioritising their home. That’s where your family roots are going to be, and that’s where you want to build a foundation in the building block for your life. So I completely respect and understand that point of view.
“But then if you look at it purely from a numbers point of view, then it might be that rentvesting is the smarter monetary move and something that allows you to scale the portfolio faster and then allow you to get a better dream home down the track. And I think this is where that whole narrative around delayed gratification comes into play. So I’m not here to say which approach is right or better in terms of that side, but it comes down to, what are you prioritising? What are your goals? And what’s going to give you that comfort over your life and your mindset?”
Listen to the full interview here.
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