An unconventional investment strategy has paid off for Victorian Ashley Thorsen, 33, who recently bought his 10th property.
While most property investors advise purchasing inner-city real estate for quick capital growth, Thorsen focuses solely on buying land in small towns just outside Greater Melbourne.
"What you get rent-wise for properties in Craigieburn is pretty similar to what we get out here, and for half the amount of spend," he says.
Thorsen's first property purchase in 2010 was a block of land in his hometown of Broadford (about 80 kilometres north of Melbourne's CBD) on which he used Metricon to build a four-bedroom house.
"I just bought it as a first house to live in. I didn't realise that it [the property value] was going to change so much, especially that quickly," he says.
At the time, first home buyers of newly constructed homes in regional Victoria were eligible for a $36,500 grant.
"The total cost of the new home with land was around the $275,000 mark, minus the grant, which meant the real cost was only $238,500."
Nine months later, the property was valued at $330,000.
"I decided to list it and sold it on the second day on the market for $335,000 ??? From that day I was $100,000 up and I had a bug for it!"
While land prices in the Broadford area have risen considerably over the past seven years, Thorsen says they remain relatively cheap compared with city real estate.
"Percentage wise the land has probably gone up 60 per cent, but as a price point it's not much because the land was $76,000 when I first bought it - it's cheap," he says.
"By using this method of buying and building in my area I have been able to pay off my own home while only ever paying the interest component on my loan over the past six years."
Thorsen's investment property success has also benefited his parents, who were recently forced to hand back their family home of 20 years to the bank.
Using his investment strategy and profit from previous sales, Thorsen purchased a Broadford property off-market in December 2015 for $210,000 with two titles - one vacant block, and one with a house for his parents to live in. Remarkably, the location was directly next door to his parent's beloved former home.
"I thought I could buy the land and build a new house, and they could pay the repayments on it and it would still be cheaper than what they pay in rent each week."
The existing house was solid but extremely rundown, so much so that it was considered by most people, including his parents, to be headed for demolishment.
"The agents were just saying it was worth the land only ??? But I just thought it was a solid mudbrick home with double-brick walls, I could completely gut it and start fresh," Thorsen says.
"We just got trades in and within six weeks we'd completely flipped the whole house around inside - new kitchen, new bathrooms, new flooring and paint."
On the neighbouring vacant block, Thorsen plans to build two new homes that will pay for the original property plus the renovations on his parent's home.
Thorsen is currently building his dream home in Kilmore, plus a waterfront holiday house in Yarrawonga. He credits his investment success to time management and buying house and land products over established homes.
"If you buy an established house you're looking at the stamp duty component on the total price point as well, but if you buy house and land, there's stamp duty on the land only," he says.
"For the last seven years, and mainly the last four, I've bought land from a real estate agent, and used Simonds as a builder ??? I'd put a house and land together and it would be worth 15, to 20 to 25 per cent more than the total cost as soon as it was finished."
Previously a car salesman and a Simonds customer, Thorsen has gone on to become a sales consultant for the company.
"After my seventh home with Simonds they actually offered me a job in sales for them so I get to work through everything for myself now," he says.
