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Buying Blind

A young couple starting their portfolio have made a habit of jumping in the deep end with their eyes wide shut, writes Joanna Jefferies. Photographs by Philip Scott

By: Joanna Jefferies

1 March 2020

When Gisborne couple Ronelle and Kyall Boonen surprised their guests by tying the knot at their engagement party, it was a sure sign of things to come.

The pair have made a habit out of surprising others and taking risks, including moving 800km east to the remote Chatham Islands, and from there, starting an investment property portfolio by buying two properties sight unseen.

The couple met at Bay of Plenty Polytechnic, where Kyall was studying marine biology and Ronelle was doing an animal handling paper.

At the time, Ronelle was working in quality assurance at a meat works, and was offered a job in the Waikato, so they packed up and moved there, and Kyall completed his degree at the University of Waikato.

While in the Waikato, they bought a home in Morrinsville – their first foray into property.

But they weren’t to stay for long following the completion of his qualification, Kyall was offered a position in Auckland, and so they sold their house and moved up north.

Funnily enough, it was the (comparatively small) profit they made on the sale of their Morrinsville property that sparked an interest in property investment.“We’d made about $20,000 after the sale and all the expenses, and we were like, oh my gosh, what a profit,” laughs Kyall. “Obviously it was quite juvenile, but then we started reading about [property investment] and learning and going to various seminars.”

A Leap Of Faith

Unfortunately, buying in Auckland wasn’t on the cards, due to their small deposit, but paying “too much” rent got the pair thinking about their future and how they could better set themselves up for financial success.

Kyall was soon transferred to the Whangarei office, where buying a house was on the cards due to the lower price point.

They purchased a modest family home and stayed there for two years, while starting their family.

‘We’d made about $20,000 after the sale and all the expenses, and we were like, oh my gosh, what a profit’ KYALL BOONEN

But soon opportunity came knocking, and a secondment in the Chatham Islands for a fixed term of 18 months was offered.

It was a daunting proposition for the couple and their young son Lachlan, but they threw caution to the wind and accepted the offer, moving 800km east to the remote islands, where there was no cell phone coverage and a total population of 600.

It was a strategic move on their part: it was a chance for Kyall to gain valuable experience as a sole fishery officer, and there were financial benefits too accommodation was included in the package, which meant they could make some serious savings while living there.

The couple sold their Whangarei house before they left, which left them with a $100,000 deposit. The cash in their pocket only fuelled their interest in property investment, and while living on the Chatham Islands Ronelle completed her Real Estate Certificate via correspondence.

Buying Blind

While away, they decided to live in Gisborne upon their return to the mainland so they got busy looking at property listings.

They bought their first rental (now their home) sight unseen in March 2018, paying $308,000 for it and renting it out for $340 per week.

But the purchase did nothing to subdue their desire to grow a portfolio; they were straight back into property education. “We were doing lots of seminars, podcasts and reading – we were watching what the market was doing, as far away from the market as possible,” laughs Kyall.

Kyall And Ronelle’s Top Tips For New Investors

1 Numbers – at the end of the day it’s a business and you need to keep it that way or you’ll end up with an emotional attachment.

2 “Price and location are the two most important factors.” Following these, look at infrastructure and employment in your investment location.

3 Use a property manager. “We try to minimise how much effort we have to put in ourselves.”

4 Pay for advice. People are often hesitant to get advice, for example from an accountant, which can cost $350 or $400 per hour, “but we feel that paying the professionals is definitely worth its weight in gold – you can easily make a mistake”.

5 Get out of your comfort zone and do something different, so you can get to where you want to go.

6 Sacrifice luxuries to achieve your end goal. “To this day we feel it’s good for us to progress. It does mean sacrificing a few things in the interim, but we’ve got what we need as far as our family, food to eat and a roof over our head.”

7 Use a mortgage broker. Kyall says people don’t realise the knowledge they have – they’re not just dealing with one lender, they’re across all lenders. “When I explain to people that generally they’re free and they get paid by the lender that takes a lot of people by surprise.”

8 Network with other investors. Property Investors’ Associations are great, but not every town or city has one. Kyall and Ronelle are a little bit out of the way, but wanted to surround themselves with like-minded people so they started networking via Instagram. To connect with them follow @the.journey.of.kyro.

9 Get educated: read books, attend seminars, and listen to podcasts.

10 Learn the market you’re investing in. “Fun for us is going to open homes in the weekend and keeping in the loop with the local real estate agents to get a feel for what’s happening – what prices people are paying and what rents are doing.”

Only five months after their initial purchase, they bought another property in Gisborne, also sight unseen.

The 1910 cottage on a 400m2 section in a good central location was purchased for $210,000 and rented for $270 per week. The couple budgeted $2,500 for a “clean up” of the property.

It was to be their first pushback against their strategy of diving in with their eyes closed, because when they travelled to the property for a whirlwind four days to do the tidy up, they were unpleasantly surprised.

“It ended up costing us close to $12,000,” says Kyall.

One of the lean-to roofs needed replacing and the insulation needed upgrading, on top of the cosmetic upgrade they’d planned.

However, the learning curve wasn’t too steep, as their efforts meant the rent was able to be increased to $340 per week (it’s now $355).

The surprise maintenance bill fortunately didn’t put the pair off, and in July 2019 they bought their third rental in Te Puke.

It’s a three-bedroom standalone 1960s house, purchased for $250,000 and rented for $350 per week.

It was the first rental property they actually physically inspected before putting in an offer, and so far it’s paying off – there are no unplanned renovations on the horizon.

‘We were doing lots of seminars, podcasts and reading – we were watching what the market was doing, as far away from the market as possible.’ KYALL BOONEN

Big Goals

Their approach to buying geographically diverse investment properties was no doubt fuelled by their success in purchasing from a far removed location. Their confidence in this strategy means in the future they won’t be limited by geography.

“We don’t really put a location as a boundary, because we feel we can find something suitable to work with anywhere,” says Kyall.

To this end, they have some big goals. The couple are in their early thirties, but want to be earning a passive income equal to Kyall’s salary by the time they are 40.

Their plan is to own 10 rental properties, which means buying one property per year for the next seven years. In order to achieve their goal, they plan to live frugally on Kyall’s salary and aim to pay down their mortgages in the short term, and upgrade their properties to allow them the equity to go again.

The fact that they managed to buy three properties within 16 months on one income from a remote location suggests they’re likely to succeed.

Plus, their experience living on the Chatham Islands, where they had to order groceries three weeks in advance, will no doubt make leading the simple life a breeze, while they pay down loans.

Ultimately, the goal is to have more financial freedom and time to spend with their young family – something that became even more significant when their second son Bodhi was born three months ago with a heart condition.

Thankfully, following an operation at Starship Hospital he’s on the mend, but this unforeseen challenge means the young family have their priorities straight.

“We don’t need hundreds of thousands of dollars to do what we want to do,” says Kyall. But achieving a passive income means “ultimately we can create more memories for our family”.


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