Scott ONeill - Rethink Property Investing: Become Financially Free with Commercial Property Investing

1. Chapter 3
2. Chapter 5
3. Chapter 6
4. Chapter 7
5. Chapter 8
6. Chapter 10
7. Chapter 13
8. Chapter 14
9. Chapter 17

1. Chapter 14

SCOTT O'NEILL
MINA O'NEILL

First published in 2021 by John Wiley & Sons Australia, Ltd
42 McDougall St, Milton Qld 4064
Office also in Melbourne

John Wiley & Sons Australia, Ltd 2021

The moral rights of the authors have been asserted

ISBN: 9780730391524

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

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Front cover image: bingokid/Getty Images

Back cover photo: Melinda Hird

Table sources: Tables 1 and 2: The Australian Taxation Office Taxation, Statistics 201718, Individuals Table 27, Sourced on 15 December 2020, . Table 4: 1990 data: Peter Abelson and Demi Chung. The Real Story of Housing Prices in Australia from 1970 to 2003. The Australian Economic Review. 2005, Vol 38, Issues 3, pp. 265281.. 2020 data: Australian Bureau of Statistics 2020 Tables 4 and 5. Median price unstratified and number of transfers capital city and rest of state, Residential Property Price Indexes: Eight Capital Cities, , accessed 12 January 2021. Table 7: Australian Bureau of Statistics 2020 Tables 4 and 5. Median price unstratified and number of transfers capital city and rest of state, Residential Property Price Indexes: Eight Capital Cities, , accessed 12 January 2021.

Disclaimer
The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the authors and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

31 degrees. Sun on my face. Sand between my toes. Life was pretty relaxed as we lay on a beach on Kos, in the Greek islands. It was 2016 and Mina and I were relishing a sixmonth break from Australia.

We thought we'd hit the jackpot. I had retired from my day job at age 28. At that time we owned 25 residential and commercial properties scattered across four different states. It hadn't come easily or by accident, though; we'd worked hard, saved for many years and obsessed over every property decision we made. Thousands of hours had gone into building this portfolio. But we had won back time in our pursuit of a lifelong ambitionto replace both of our incomes so in future we could do what we wanted on our own terms.

Now we had taken the brakes off and flown to Greece to eat, drink, visit family and travel around Europe for six whole months, using the passive income we had earned from our properties. It was a deeply humbling feeling.

As I sat by the water and watched the beach chairs being stacked away for winter (signalling it was nearly time to go home), I mentally reviewed our expenses over the past few months. After all our accommodation, plane tickets, eating out and other expenses were added up, our properties still produced more income than we spent. This was our aha moment, when we knew life would be different forever. I couldn't believe it!

Our property income was now enough for us to live offand retire on. It was one of the most exciting moments I have ever felt, because I knew we had made it financially. And there was no reason why we couldn't keep travelling indefinitely. I felt like we had none of the stresses normally triggered by having to go back to jobs neither of us enjoyed.

However, there was an empty feeling there too, like something was missing, which was strange considering we had reached such a longheld personal goal. It made me think, what's next? How had we got here? We had been offering some investing advice on the side; maybe we could take this to the next level and use our experience as a platform to teach others? And why not? We seemed to be the only people I knew at the time chasing this highyielding commercial and residential investing strategy that worked so well for us. Many others in the industry were preaching outdated and slower ways to build wealth that we simply didn't agree with. We could see there was an opportunity to show people what to do and how to do it, and just what was achievable.

It struck me then that our success owed much to the fact that we have always looked beyond our own backyard. Beyond our familiar territory in Sydney, and even beyond the traditional investment focus of residential propertyto commercial property. We like to do things differently, to challenge the status quo. We like to take calculated risks, and we soon realised that you can invest outside of where you live. You can look to different asset classes to get you there, and discover that the local residential market is not the only way.

Our success has come from our move to invest in the commercial property market. It has held the key to our future wealth and underpinned why we set up our business, Rethink Investing, to help others on the same road. More than 2000 investors and counting, in fact.

As a result, we're part of a new generation of investors. We invest very differently from our parents, finding a different path from the one they followed to create their wealth. We chose to focus on higher cash flow investments rather than the outdated negative gearing model, because it works.

Four years after that aha moment on the beach, life is very different. When we sat down to write this book, the world had been hit by the coronavirus pandemic. With a newborn baby in our family and like everyone else, we hunkered down, practised social distancing and joined the effort to try to flatten the curve, two novel concepts that have become intimately familiar to all of us this past year. To our surprise only one of our nine commercial property incomes has been impacted by COVID19.

In the very early days the pandemic affected everything in our business. Things slowed right down in March and April 2020, but they picked up again in May, June and July, after which we experienced some of our busiest months ever. We attribute this rebound to a few factors. Facing job uncertainty, people are more than ever looking for high cash flow. Secondly, the record low interest rates are giving people more reason to invest their cash. Finally, many people now have extra time to concentrate on their investing rather than travelling or working nonstop.