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This week we had the great pleasure of interviewing Jeremy Iannuzzelli from Parramatta in NSW.
At the age of 14, when Jeremy’s friends were getting bikes and playstations for their birthdays, Jeremy was given 1,000 Telstra shares to start his investment journey.
Guided by hard working, immigrant parents, Jeremy became interested in money from a very young age. He then found a passion for property investing through a specialist accounting firm he joined after uni.
Jeremy now owns 9 investment properties with nearly $1M equity and he’s only 26 yrs old! The same accounting firm he joined is now transitioning him to Partner.
For the first time in a public setting, Jeremy openly shares the story of the duplex he bought in Cowra, NSW. He discusses what went wrong, the lessons he learned, and how it has now made him a better investor.
Jeremy offers two contributions to Soldier Tom’s set of rules/criteria we are developing for successful property investing:
1. Identify the objective of your investment, then develop a plan to achieve that, and don’t get sidetracked
2. Dual tenancies offer dual rental incomes, but only when both tenancies are rented, avoid properties where there are risks of high vacancies
Enjoy the interview!
ST: Could you tell us about any mistakes that you have made with your investments, what did you learn from the experience, and is there anything you do differently now as a result of this?
Jeremy: I haven’t shared this too many times, only the people close to me really know, but I will share it here today.
I wanted to build a portfolio quite aggressively, and I believe it was still part of myself maturing of age, and really understanding myself as a person as well.
I found a duplex with two sides renting for approximately $350 per week, $175 each side. It was in an area called Cowra in regional New South Wales. The the purchase price was about $150,000 or $155,000.
I looked purely at the yield (about 12%), and forgot about the fundamentals of my research which was about being close to amenities, major arteries, schools, highways and bus routes.
I thought that by buying the property I could pay for one, but really get two. So I bought it.
I bought the property but then quickly I realised I couldn’t rent out the second side when the tenant left, so the true rent was only $175 per week, not the $350 per week I had assumed.
ST: I see, so you had vacancy issues.
Jeremy: That’s right. So where my investment was supposed to be positive geared, it turned out to be negative geared, and I couldn’t afford that.
So I worked out quite quickly that this was not in line with my goals. It was a silly decision which I rushed into without taking into account any of the fundamentals that were important to me and relevant for my goals.
After 12 months I made the decision to sell, and after all costs fortunately I came out about break-even.
So I was able to walk away unscathed, but at the same time, it gave me a reality check and I realised I couldn’t afford to be so silly, and I was very foolish for not sticking to my fundamentals.
ST: In hindsight it sounds like a very intelligent move, you walked away when you did, you effectively turned a negative into a positive.
Jeremy: The way I look at it is even if I had lost a bit of money, I still would have looked at it as a bit of an eye opener, something that helped my learning.
These things can happen, we can get what I like to call a “pickled eye”, it looks nice on face value, but deep down, we need to make sure it’s in line with our objectives.
ST: That actually leads me into the next question, has the experience reinforced your strategy in terms of what types of properties you look for now to add to your portfolio? Would you never go back to a high yield investment if you knew there could be vacancy risks?
Jeremy: Would I never touch something like that again, the answer is definitely not.
I think there’s a time and there’s a place for investments like that. Just at that particular stage of my portfolio, I chased the yield, when I should have been looking more at capital growth, because my key goal was to grow the size of my portfolio.
Jeremy was also happy to share his knowledge and insights on a range of bonus topics for us, including:
- You don’t have to be a rocket scientist
- Setting 5 “SMART” goals per year based on income & lifestyle preferences
- Investing in regional towns versus capital cities
- How to research investment opportunities
- Book, television and website recommendations
- Where to start out as a new investor
- Building a quality support team
- Migrant families succeeding against the odds
An audio copy of the full interview is available below. Note that the recording starts at 03:40.
Jeremy’s accounting practice is contactable on (02) 9633 5511 or at admin@keshab.com.au
Some other great articles about Jeremy can be found here:
- Your Investment Property – How I built my $2.5M portfolio on a $50K income
- Smart Property Investment – The Man with a Plan
Thanks for tuning in, and feel free to provide feedback on our new format.
