Alfonso De Guzman’s focus on property investment in the past seven years has not only helped him and his family to provide for their financial future, but enjoy some of today’s pleasures as well.
Alfonso first became aware of the potential opportunities available to him in 2004 when his Smartline adviser Jon De Guzman (who is also Alfonso’s nephew) explained that the significant equity Alfonso had in the family home could be a springboard to invest in additional properties.
“I really wasn’t aware of how we could use our existing property to buy another property but once Jon explained the concept to me, I became pretty excited as I could see the opportunities there,” Alfonso said.
“Our key motivation was to be able to help our two daughters in the future – at that stage they were about nine-years-old and 12-months-old. We wanted to be able to provide them with a house each as adults.
“My wife Esther and I discussed the idea of investing in property at length.
“We both needed to be comfortable with the concept but we could see the benefits of doing this. We had secure jobs and felt we could afford to fund any shortfall between the income and expenses what would be required.”
Soon afterwards Alfonso bought the family’s first investment property, a townhouse south of Brisbane. With the property negatively geared by about $120 per week, the family cut back on eating out and Alfonso and Esther took their lunch to work more often to help cover the gap.
Over the coming years several more purchases followed, including a townhouse with a strong rental return, a joint venture investment with a friend which involved the construction of a new house in the Lockyer Valley and a second joint venture investment with the same friend which saw the construction of a duplex near the new North Lakes development.
In 2010 the decision was made to sell the original investment property to enjoy some of today’s pleasures.
“By that stage we had well and truly exceeded our investing goal of having a house each for our two daughters,” Alfonso said.
“We were paying a total of about $280 a week to fund all the properties and while we were able to do this relatively comfortably we had made some sacrifices along the way – we had cut back on our entertainment budget and my wife picked up an extra shift here and there.
“We were really happy with what we had achieved and decided to also enjoy some of the benefits now as a family.”
With the investment property having increased in value by about 65% (or 10% each year), Alfonso made a healthy profit on the sale. Each family member was able to purchase something they each really wanted and all four went on a five-week holiday to Europe and Malaysia.
With 20 years until retirement, Alfonso is keen to keep gradually building his property portfolio and is continually considering new opportunities, such as more duplex projects, student accommodation and smaller sized CBD apartments.
“Building a property portfolio was actually easier than I thought,” he said.
“With the right advice from trusted professionals it’s not that hard. But it is important to do your homework and research the options. Knowledge is power but I enjoyed doing the research – it became somewhat of a hobby for me.
“The world is changing and so is the property market so I’m keen to keep understanding the trends and what’s happening, and therefore how there might be opportunities to invest in the types of properties that people want.”