Bernadette spoke to Prue Muirhead, a true rock star in the property industry. She is well known in the media and investment industry, being the winner of an Australian Property Investor of the Year award. She also lectured in property investment and management at TAFE, South Australia, for ten years.
Prue Muirhead holds an extensive positive cash flow property portfolio with her husband, Andy. They run their own property management business, Muirhead Property Management, and comprehensively understand how property can change your life. She described herself by saying:
I’m a mother of two…And I just adore my kids…property only really kicked in because we nearly lost everything. And so back against the wall, [we] had to make some good decisions, and I knew you could borrow money for property…I really love my kids. I’m sure we all do…I like the game of monopoly, and I like numbers. I play the saxophone and the piano, and I sing and dance. I’m the first one on the dance floor. So that’s pretty much me into a tea.”
The Property Prue Muirhead Nearly Lost Before Becoming A Rock Star Property Investor
Prue and Andy Muirhead bought the home they live in today in their early twenties. At the time, they didn’t have children, and both had a reliable income – Prue was a secretary, and Andy was in the Airforce. When they decided to buy their first investment property, they had two children and a failing DJ business.
I went to the bank to borrow some money to buy my first investment property in 2006. And they said you can’t even afford your own home.”
How Investing In Property Helped Prue And Andy Muirhead Bounce Back
REI Home Loans were offering a low-doc or self-certified loan, a loan that allows you to sign a piece of paper to say you earn a lot more money than you do. Prue Muirhead used the $150,000 she and Andy were given based on the equity of their primary place of residence to pay the loan repayments, but they needed an income.
Prue Muirhead had read a few inspiring books to learn about property investment before deciding to start buying properties. Authors Jan Summers, Margaret Lomez, and Robert Kiyosaki taught her what she needed to know before jumping into the real estate investment business.
She had read about positively geared cash flow properties or properties that put money in your pocket. They couldn’t afford to have negative-geared houses that would have cost them money to hold.
And so I started to buy houses that would at least pay for themselves immediately. And then four years later, I won property investor of the year with 14 properties.”
Prue’s property investment portfolio has gone from strength to strength. However, she needed to make intelligent decisions when she was close to losing everything. Her strategic plan catapulted her into teaching property investing and property management at TAFEs. She advised people how to self-manage their houses and look for a good property manager.
The Support You Need To Thrive In The Business Of Property Investment
Family values are fundamental to us at The School of Renovating, and Prue Muirhead says her husband, Andy, has always supported her. He trusted her property investment choices from the beginning. And now he is completely involved in the business. To help their business thrive, Andy got his builder’s license and now takes care of the maintenance and routine inspections in their property management business.
Like Prue Muirhead, Bernadette also has the support of her husband, Steve. Unfortunately, not everyone she works with is in the same position, creating a need for the mentoring offered by Bernadette and the team at The School of Renovating. The property business can be a tough gig to navigate on your own.
I believe the best predictor of how successful you’ll be in life is the partner you choose…if the person closest to you is really down on everything you do, it erodes your confidence. When you’ve got someone who trusts you implicitly and is with you for the ride…it is a huge advantage in terms of getting to where you want to go.”
Prue’s family involvement doesn’t end with her husband. Their son Benson is fully qualified and has worked with them for four years. Prue sees him as their future, carrying on the Muirhead name.
The Importance Of Mentorship In Property Investment
After winning the Australian Property Investor of the Year Award, Prue Muirhead found she was contacted by people looking for advice on property investment. Although she enjoyed helping them, she was frustrated because her way was not necessarily the right way for everyone who reached out to her. She said:
There’s plenty of ways to load a dishwasher, right? So there are plenty of ways to make money in property. And my way’s one way.”
After giving someone advice, Prue Muirhead often found they would walk away and not do anything with it. As a result, her skills and knowledge weren’t utilised as much as they could have been. Consequently, she finds it is better to deal with people as a property manager because then she can hold their hand through the entire process.
That’s what we do at The School of Renovating. Our mentorship and guidance are what sets our program apart from others. People enter our program after doing numerous property renovation courses without being able to get started. They can achieve success using our step-by-step guides and take advantage of our mentorship and nurturing support.
Your Primary Residence Can Help You Fund Your Investment Properties
Prue and Bernadette have both used their primary residences as a pool of money to fund lots of property projects. It goes against what Robert Kiyosaki says: Your home is not an asset. However, for most people, their family home is the jewel in their crown. And if you view it as an asset, you can realise what you can do with the increased value you add.
What Makes A Good Landlord?
As a property manager, Prue Muirhead has been lucky most people come to her as her previous student or because they are familiar with her profile, so they already trust her decisions. When asked what makes a good landlord, she said people accept their property manager knows what is suitable for their investment.
Some people want to know everything about what Prue and her team are doing, which makes her job frustrating. So, she has portals for them to log into to keep track of their real estate investments. She pointed out you must have found the right property manager with the appropriate experience to feel they have everything under control and your best interests at heart.
Finding The Best Property Manager
Property management can be a thankless job, so the average property manager will only stay in the business for nine months. So, the person you initially list with is not the same when it comes time to renew a lease, find a new tenant, or list your next rental property. Therefore, when you find a great property manager who has been in the business for a long time, you should hold on to them with both hands.
People who work for larger property management companies can find themselves looking after up to two hundred properties. They are engaging with the landlord and the tenant, and their boss also tells them to find more properties to manage. So, your investments can get lost amongst all the others.
It works differently at Muirhead Property Management. Prue, Andy and Benson are all hands-on in the business; between them, they manage one hundred and eighty properties. The difference is visible because their focus is only on property management; they are not involved in sales.
Prue says landlords must find out how many properties their property manager is looking after. It is equally essential to talk to the person who is going to be managing their properties. Your initial contact may be a salesperson who is unaware of how the property manager will work with your home, and you don’t get what you thought you were going to.
What It Takes To Make Property Management A Viable Business
When Prue Muirhead went out on her own, she started with sixty properties and grew it from there. She says it was viable, even though property management fees can be pretty low, especially in South Australia because their rental prices are lower than in other areas in Australia.
Prue says the average property management fee varies depending on your location. For example, Muirhead Property Management’s average management fee in Adelaide is 8.8%. While it is normal for the fee to lie between 7.7% and 9.9% in South Australia, it ranges between 5.5% and 7.7% in Victoria. Each state is different, and they’re all under separate legislation.
4 Tips To Maximise Your Rental Properties
- Allow pets: 70% of the rental market owns pets, and you can ask for an extra $5 to $20 per week in rent.
- Paint and carpet: A fresh coat of paint and new carpets will entice tenants to sign a lease.
- If you have a pool or rental property near the beach, try to ensure your lease comes up in summer. Then, when the sun shines, you’ll get more rent.
- Solar panels can get you $20 to $40 a week more in rent.
Prue Muirhead’s Advice On Starting In Property Investing
Prue’s number one piece of advice is: “Start now!” If she could redo her life, she says she would have started investing in property sooner.
Your investment strategy is also essential. Prue sees the most value in buying and holding property to achieve capital growth. She points out capital gains tax is only relevant when you sell the property. Also, if you flip your properties, you have to pay stamp duty over and over, instead of just once if you hold them.
Prue Muirhead encourages you to avoid collateralising; every property should have its own loan. However, using the equity out of your rental properties is a great way to fund a new project. Another way to ensure you have access to money when you want to buy a new property, or run into unexpected expenses, is to have a self-managed super fund.
When you’re trying to build your wealth, you do it through property.”
We couldn’t agree more. Bernadette recently wrote an article about why flipping properties is a bad idea. Sometimes it is necessary, but we advise you to adopt a two-speed strategy when possible. What we mean is: Continue flipping renovated properties on the one hand, and on the other, buy and hold properties to build capital. This strategy gives you the best of both worlds.
One of our Wonder Women calculated how much wealth she would have now if she had never sold anything. And it was an eye-watering amount. So, when you know better, you do better.
The Benefits For Family In Property Investment
Bernadette’s success in the property business has had a ripple effect on her family. They continue building on what she learned in her decades-long career in renovating for profit. Similarly, Prue’s children are following in her footsteps. At the ages of 22 and 24, they both own property. Prue reports her daughter, Casey, has made $180,000 worth of capital growth in eighteen months and is ready to buy her next rental property.
Their son, Benson, was keen to join the business straight out of school, but Prue and Andy insisted he get some experience working for other people first. He is gentle and soft, good with numbers and business orientated.
Muirhead Property Management is the third time Prue and Andy have worked together. They have had staff working for them, which was difficult. So, they have made a vow never to take on any more.
“So we’ve kept a real lid on our business and not taken on anything outside of an area”.
To keep their business viable and sought after, their fees are a per cent higher than the average in Adelaide. It ensures only the people who really want to work with them can do so.
A Rental Property Portfolio Is A Great Way To Build Wealth
Prue is strategic about the rental properties she adds to her portfolio and has been from the beginning of her journey in property investment. It has earned her both fame and fortune and a reputation for being the person to speak to if you need advice on where to start. You can find her through a quick Google search, on Facebook or the Muirhead Property Management website, and she is happy to receive your emails.
Muirhead Property Management is the place to go if you are looking for a top-quality property manager in Adelaide. To maintain their reputation, they need to be careful about how many properties they take on, but if they can accommodate your rental property, you can rest assured you are in good hands.
Our Facebook group is a beautiful place for you to meet like-minded people in the business of property investment and management. It is completely free and growing to include hundreds of savvy renovators who offer the support you need to make your property business a success.
