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5 minutes with Paula Robinson and Bevan Warn

Thursday, July 13, 2017

 


Paula Robinson and Bevan Warn are no property newbies. By the time they met in 2011, they have both accumulated over 30 years experience in property and landlord. Being enthusiastic about their investments as well as networking with fellow investors, Paula and Bevan have kindly put their hands up to host the regular Warkworth investor networking group that will start its first meeting Thursday 3rd of August. We grab a quick moment with the two to talk about their investment philosophy, biggest challenges, and tips for their fellow investors.

APIA: Tell us a bit about yourselves.

P&B: While we have a very different history with respect to property, we both became landlords in our early 20s some 30+ years ago. By the time we met, individually, we had already gained a vast amount of knowledge and experience in the property field. Bevan's focus at the time was the area from North Shore to Mangawhai and predominantly on properties where value could be added long-term (vs the quick lick-n-flick approach). His targeted opportunities to maximise value and upgrade each property and gained good experience spotting potential, renovations and trends. Paula's property knowledge was more diverse in the sense that over the years she had experienced being a tenant, an owner, and a landlord in as many as 6 countries. Since arriving in New Zealand in 2002, she has been involved in renovations, subdivisions, new-builds, conversions, and long-term speculating. Both Paula and Bevan have experience in leasing and owning properties for business use.

After both doing well independently of each other, we instantly saw that our knowledge and love of property could be a great way forward for us to create a future income and security for our later years. We like so many aspects of the investing side such as: the initial search & consideration of potential places, the ongoing challenges & learning, the renovation process and the satisfaction of seeing our initial vision for a property become a reality plus, of course, the capital gain which is our long-term goal.

APIA: What is your primary area of investment and main strategy?

P&B: When we began investing together in 2012, we focused on the Buy-&-Hold strategy the area we knew well – Warkworth, Snells Beach & surrounds. We could see the area was just beginning to climb and knew that property growth had to increase significantly over a 5 to 10 year period due to the future planned growth.

We decided Buy-&-Hold was the way forward for us and our goals for a number of reasons: At the time we both worked long hours in our own individual businesses plus had home & land (10 acres) to look after in our spare time. Although investing in anything carries a degree of risk we felt we didn’t need to increase that risk level with high volume, quick turnover property. We were in a good position and had worked extremely hard to be where we were. Our ages at the time were also a factor in our choice of investment strategy (Paula 48 and Bevan 55) – our main goal was to get ourselves in a position where we had the option to move into our retirement within 10 years, being mortgage free and with income from property that covered our outgoings plus giving us options to sell off in stages to free up capital that would allow us to live well, travel and enjoy a retirement together.

APIA: Does being in Warkworth make it harder or easier for you to invest? Do you own properties elsewhere? How do you overcome challenges of not being on the ground?

P&B: Yes, it does make it much easier being in the area where we invest. We’ve had no local network known to us specifically for investors other than the Networking Drinks Evenings held in Silverdale which we go to as much as time allows. They are really great and the whole reason why we know Warkworth needs one too!

As far as investments outside of the area go…. we own property overseas, one of which is a recent investment in Australia. The Sunshine Coast is experiencing huge growth and a change in its employment structure due to massive development that is creating more permanent work in the region. Before buying we did as we have done before, checked out our reasons, our ‘why’. Did huge research on the areas. By the time we saw the property we bought we had enough knowledge to recognise that it fit our criteria. We also took time out to engage conveyancers, accountants etc whilst there so we were as prepared as we could be once we had bought. We have a great tenant in place there and so far, all going well.

A property we have in Spain created a whole new challenge around the intricacies and challenges in foreign ownership. However, as with any property ownership (especially for investment), no matter where in the world it may be, doing thorough due diligence in all aspects is a must. This certainly doesn’t guarantee a smooth ride but armed with the right tools (information & good advisors) you should at least stay on track!

APIA: As an investor, what is the #1 challenge you have had to overcome?

P&B: We’ve been relatively fortunate. For us, being taken to Tribunal by an ex-tenant would probably qualify as our number one challenge. The threat of Tribunal and the subsequent court appearances went on for around 4 months.

In brief: the tenant claimed we had breached our contract as we had given 42 days’ notice of intention to move into the property but before that term had ended our circumstances had changed (we bought another property to move into instead). Tenant had left earlier than the notice period (owing water and rent…) threatening to take us to court. We attended one court hearing to claim the water and rent owing to us. We were successful (fortunately the Bond covered it). Another court date was then set as the tenant now decides to follow through and take us to court for many thousands of dollars for a list of ‘costs’ to them. They were unsuccessful.

The only reason we were able to avoid costs here was down to doing everything by the book and also keeping detailed records of all correspondences that could prove our actions and intentions.

One other challenge that comes to mind whilst writing this now is avoiding the temptation to buy property without really thinking it through properly! So often we see places that we just love and think ‘this is brilliant!’ but once we’ve taken the time to look at it from a different perspective and ask ourselves the right questions we often have to realise, and accept, it’s not a good purchase for us and walk away (even if we still love it!).

APIA: Being part of APIA is all about networking and sharing knowledge. Looking back to your experience so far, can you share five tips with your fellow members?

P&B:

  1. Choose your strategy carefully and stay flexible. A stubbornness to adjust or change won’t serve you well!
  2. Learn, learn, learn! As much as you can from all available avenues and resources. Even the most educated and knowledgeable investors make mistakes or ‘hit bumps’ (affectionally known as learning curves!). Investing is a risk but having knowledge and support can significantly help reduce that risk and help get you through any bumps you may encounter.
  3. Take your time. Really dissect things and consider your reasons for buying carefully before you commit. Stick to your guns on what you will pay. In a nutshell; Buy with your head, not your heart.
  4. When renovating a property bear in mind not everybody’s taste will be the same as yours so aim to appeal to the majority as opposed to the minority.
  5. Always treat your tenant as you would a customer, that’s essentially what they are. Once you have found yourself a good tenant do all you can (within limits!) to keep them. We prefer to keep a lower rent good tenant than risk a higher rent not so good tenant.
To meet Paula and Bevan as well as Warkworth based investors, be sure to attend the upcoming networking drinks on the 3rd.  Registration is open here.

 


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