Sarah Kim and Hew Kenn Chew outside their first Auckland property.
Two 24-year-old Aucklanders, who collectively saved about $30,000 for their first place in their first year of work, could have a $1 million-plus portfolio by the end of this year.
Owning one Auckland property is not enough for Hew Kenn Chew, a first-year architectural graduate and girlfriend Sarah Kim, an accounts administrator.
Their first place is a two-bedroom unit on St Lukes Rd, Sandringham, but they plan to add a third bedroom to add value and get more rent. But they have much bigger plans.
"We only have one property so far, but we are already looking to purchase a second one in the next five months after we finish renovating our St Lukes property. Also, if everything goes according to plan we're hoping to grab the third one during the end-of-year break," Chew said.
They will then use the St Lukes value uplift to allow them to borrow more to buy the second. The same pattern will be repeated with the third.
Both are students of Mt Roskill's Ron Hoy Fong's Ronovationz business, with the marketing line 'we will help you become a successful property investor'.
"At the moment, as a two-bedroom unit it'll rent for approximately $450 to $470/week. However we are intending to do cosmetic improvements and add an extra bedroom. This will bump up the rent to approximately $580/week," Chew said.
"The market value of the place is approximately $660,000 to $730,000 based on recent sales around the area. We purchased it around 640,000 in February. So we reckon we managed to get a decent price under market value - instant equity of at least $20,000 but we haven't got a registered valuation of it yet. We anticipate it'll be worth $820,000 to $850K,000 after renovations are complete," Chew said.
So how did a couple only in their first year of working life afford all this?
"We borrowed 60 per cent of the purchase price. The rest of it came from parents as an equity gift," he said.
They now aim to find a second place, slightly under the price of the first.
"Based on some limitations of budget, we will be purchasing something below $600,000 for the second one. We will use the same strategy as we did for the first property and add value through renovations. We are going to be purchasing the second one carefully and will search for a good deal," Chew said.
"We only saved what we could to cover the renovations and fees for advisers. All of this was saved during our first year of working as soon as we graduated uni. Together we saved approximately $30,000 together," Chew said.
The couple's story is not unlike that of Maxim Sherstobitov, 28, who only arrived in Auckland from Vladivostok in 2006 yet today has a $1.7 million property portfolio.
The freight forwarder began buying only four years ago, now owns three properties. He has a 10-point plan for people wanting to buy here. He also hopes his story might inspire others but like Chew and Kim he got financial help from his parents.
Phil Twyford, Labour's housing spokesman, said last week he admired people who worked hard and took risks but their investing caused massive social and economic problems.
"If they can do that and by playing within the rules, good luck to them. But the question we have to ask ourselves is, is this good for New Zealand and our children and grandchildren that the only way to make a dollar is to speculate in real estate?
"We're never going to get wealthy as a country by selling houses to each other. It doesn't generate jobs or exports or make the country wealthier. It just shifts wealth between one group of people and another and drives inequality between poor and rich and that's what's going on. This speculation-driven housing bubble in Auckland is a social and economic disaster," Twyford said.