How passion led to profit - and $350k income

A former architect and now a buyers agent, Steve - with his fiancee - invested “a deposit worth” of money into themselves. This meant training, property investment seminars, and mentorships. Soon after, with a $60,000 deposit, Steve and his fiancee bought their first property.

“We have since then scaled our portfolio with strong cash flow investments with a focus on short-stay,” he told Your Investment Property Magazine.

The four properties are all located in Western Australia.

At a glance:

• Portfolio value: $2.5m
• Current number of properties: 4
• Annual rental income: $355,000

Property One - Perth

The couple’s first project in inner-Perth started with a “junky” property and lots of sweat equity. It involved purchasing a fixer-upper three-bedroom/one bathroom in inner Perth. The bones were there, and so was the land.

It was marketed as a demolish-and-develop job by the agents, but Steve persisted with a renovation, instead seeing it as a “blank canvas”.

“That blank canvas enabled us to convert the biggest bedroom into a self-contained studio that we now rent as a serviced fully-furnished apartment. We added a bathroom, kitchenette, and a separate external entrance,” Steve said.

Before

After

It’s estimated the conversion cost $15,000.

Due to its proximity to Perth’s CBD, the self-contained studio now generates about $17,000 in income per year on short-stay sites like Airbnb.

Property Two - Geraldton

For the second property, the two looked beyond Perth and into rural Western Australia. Steve and his fiancee picked the town with “the biggest signs of economic health and growth”.

They invested $17,000 in income from the first property plus $40,000 of savings into a rural three-bedroom home. The end purchase was only $135,000.

This is because it needed renovations and some re-stumping, according to Steve. Now that house is rented on Airbnb and is said to generate about $38,000 in income per year.

Property Three - Geraldton

Despite a job loss leading to reduced mortgage serviceability, Steve persisted with his investment aspirations.

This is where partnering in a joint venture came to fruition in a two-bedroom, one-bathroom property with a shed - “the shed really was a granny flat, but not approved” as Steve describes it.

It’s a house in a central location and was purchased for $147,000 by the joint venture partner with Steve and his partner putting in $60,000 in renovations.

Before

After

It was sold for a steal because it was a former drug lab.

After renovations, it was re-valued at $250,000, and the team refinanced at a loan-to-value ratio (LVR) of 80%. This freed up some equity, and Steve estimates that $20,000 of his own money was left in the deal.

Both the granny flat and house are rented out on Airbnb as two separate stays at approximately $50,000 per year. Steve says the return on investment was well north of 100%.

Property Four - Busselton

This is where Steve and his partner started hitting the big leagues - again with a joint venture partner.

In the state’s southwest, Steve, his fiancee, and business partner researched homes over a three-month period “to really get to know the local market”. They picked Busselton.

The end result was a guesthouse with high turnover potential - it was purchased for $1 million and again it was renovated.

Property managers were enlisted, who helped raise the guesthouse’s turnover from $120,000 to $250,000.

The income generated is being reinvested into the mortgage, and Steve hopes the debts will be paid off over the next eight to 10 years.

How to ‘house hack’ with short-stay accommodation

All four of these properties are listed on short-stay sites such as Airbnb - with council approval of course. This is what Steve calls ‘house hacking’ - getting the properties to do the hard work for you and cover your mortgage.

Speaking of the $17,000 income generated from his first property, Steve said this more than covers the mortgage interest and allows them to put the savings towards his other properties.

“It also enabled us to live in a central more expensive and very convenient location - something first home buyers are struggling with,” he said.

“The best thing about house hacking is that it not only helps you financially, it also helps other people in need looking for affordable short-or-medium term accommodation.

“We are more than 90% booked, and the free days in-between are blocked for cleaning. There is a huge demand for smaller studios and it’s permitted under most councils' granny flat schemes.”

Of course, every council across every state is different - so it’s advised investors do their research.

Pictured: Steve Mucha and fiancee Ivette

Steve’s Top Four investment tips

1. Invest in yourself

“One of the best investments you can make is the investment in your own knowledge. Develop a hunger and listen to real estate podcasts and audiobooks. Learn and listen to the people that are where you want to be.”

2. Your network is your net worth

“You don’t achieve success by yourself. Put together a power team of professionals and potential partners. There are a lot of high-income earners who have the capital but little time. If you don’t have the capital, put in the time and legwork! When you find a high-yield deal, money will find you.”

3. Have a reason

“Know your reason ‘why’. Having legitimate reasons - like being stuck in a dead-end job, not having time for your kids because you have to grind away from 9-5, or even work three shifts to put food on the table - will keep you grinding away even in the tough times.”

4. Surround yourself with people who are on the same path

“It’s easy to throw in the towel when times get tough. Surround yourself with people who are on the same path. Sharing success stories and failures will keep you motivated. It also helps to have someone who keeps you accountable if you derail.”

Steve’s Property Portfolio Timeline

Year purchased	Highlights	Property Image
2018	Inner Perth Studio Conversion Started with a $60,000 deposit Converted the main bedroom into a private studio Generates $17,000 in income per year on short-stay sites
2019	Rural WA Getaway House Bought using income from the first property plus more savings Three bedroom house for only $135,000, in need of renovations Generates $38,000 short-stay income per year
2020	Geraldton Home with Granny Flat Purchased for $147,500 with joint venture partner Steve put in $60k in renovations Re-valued at $250,000, and now generates $50,000 per year in Airbnb income
2021	South West WA Guesthouse Purchased as a joint venture for $1m Enlisted property managers, boosted turnover from $120k to $250k Profit re-invested into a mortgage with a timeline of 8-10 years before it’s paid off

Steve’s Portfolio

Total spent: $1,844,350

Annual rental income: $355,000