Not so long ago the stereotypical image of a person in agriculture was of an older, struggling, white male and the image of a Millennial was of a young person sitting around a café eating smashed avocado and complaining about the unattainable property market. In this edition of our Lessons Learnt series we talk to The Regional Investor and bust those stereotypes wide open.
The Regional Investor could be you. She is a 26-year-old agronomist working in regional NSW. Her job in agriculture is well paid. She lives in a rural town with a strong community of young professionals. And that busts the second myth that a career in this industry is no more than a low-paying job in the sticks. “To me, a career in agriculture means getting well paid to do something you love,” she says.
In fact, The Regional Investor’s career as an agronomist pays well enough to allow her to follow her financial dreams of building a property portfolio, with her partner, in rural Australia. “Property investment provides a tangible asset regardless of your location or starting point,” she says, “and investing in regional areas offers opportunities to get into property at lower price points with better cash flow to help you get started.”
Gaining financial skills alongside her agricultural degree has been a mixture of education and experience for The Regional Investor. “When I finished uni and got a well-paying job the first thing I did was get a dirty car loan and a big V8 ute,” she says. “I learnt very quickly that I didn’t like bad debt. I had that car for less than nine months and it would have cost me about eight grand. It was a valuable lesson about debt.”
The ute taught her that her surplus income from agriculture should go towards something that would appreciate rather than depreciate and so began a financial journey into property investment. She met with a mortgage broker who “opened our eyes to the different ways you can structure finance”, she used the internet to research for nearly four years and she then committed two years to a Master of Business Administration (MBA). “The MBA gave me more of that financial background but it also gave me business skills I now use day to day as an agronomist.”
The Regional Investor invests in rural towns with a diversified workforce – “we tend to stay away from mining towns that may go bust overnight” and in properties with positive cash flow. “We only buy properties that pay for themselves so we only have to fund that initial deposit,” she says “and from there they pay themselves off and grow a little bit in equity that we can pull out and put into the next one.” Ultimately it is her aim to own a range of properties – from residential to commercial – across Australia.
The Regional Investor sees many advantages to a career in agriculture in rural regions. There is the well-paid job, the opportunity to get into the property market and the network of young professionals like her. To give back she volunteers as co-chair of the local Young Aggies group and shares her property experiences on Instagram as @the_regional_investors where her tag line is: “Borderless investors from regional Australia. Building a property portfolio from scratch. No Lotto, No Inheritance. Just two PAYG 20-something’s.”
Recent surveys such as the SEED report (Developing student interest in the agriculture sector) and the Gallup Findings on the Changing Nature of Work, with Jim Harter have found that in young people’s minds a career in agriculture isn’t just a career but a lifestyle, and that the separation of work and life is less and less defined. Results also identify the lower cost of living and greater sense of freedom as the most positive aspects of regional living. These may become the stereotypes to which a new generation, and The Regional Investor, belong.
And to the avocado myth: Do Millennials sit around all day in cafes eating smashed avocado? “I think that’s an interesting point,” The Regional Investor says. “People may think a career in agriculture and investment in property means you have to save and have no life. That’s not the case. I’ve still been overseas every single year and will continue to do so. We are not going to sacrifice our lifestyle to build something when we could die tomorrow.” It seems you can have your avocado and eat it too.
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When I first started telling people that we were looking at property investing I was given ALOT of advice. Some good and some bad depending on the experiences that particular person had with property themselves. People giving you advice 100% have the best intentions, but sometimes you have to take a step back and ask yourself why the good and bad stuff happened.
Did they self manage a property and have a bad tenant?
Did they rent out the family home and not make money because it wasn’t investment worthy in the first place?
Did the bank of mum and dad help them out?
Most importantly were they proactive in educating themselves before they started or did the wing it and then wonder why it didn’t work?
I’ve learnt to take something out of every piece of advice especially horror stories. I work out what they did wrong, how it can be avoided and try to avoid making the same mistake myself.
Some of the best advice I’ve receive to date;
– Work out how someone is getting paid, often off the plan with the flash brochures and rental guarantees comes at a cost…. to you. Buy in an established market, not a new development with no resale history. – Create a win-win situation for yourself and the seller. Be negotiable, realistic & timely.
– Don’t get emotional, if the numbers don’t make sense walk away. If you can’t take emotion out of it outsource to someone that can; buyers agents, accountants and your broker. – Don’t be afraid to ask a silly question, a silly mistake is far worse and can be costly when it comes to property. – Employ services based on quality not price, it’s better to loose a little money for the right job than to pay for it twice. – Never cross collateralise. Ever. Pay your lenders mortgage insurance, if you can’t buy it without a guarantor then you simply can’t buy it.
– There’s no afterpay in property, if you can’t manage the money then property is not for you. Get rid of the Foxtel, the gym membership and everything else you don’t use. Monthly subscriptions hurt your serviceability hugely. – Don’t take advice of anyone who isn’t where you want to be.
– Don’t miss out on the things you want, work harder, save more, do both