How 21-year old bought two blue-chip Sydney properties in one year during a pandemic

At a time when many in Gen Z are dealing with HECS debts and weighing up career choices, one 21-year-old has managed to collect two properties in Australia’s priciest city in a year. Here’s how he did it.

At a time when many in Generation Z are dealing with HECS debts and weighing up career choices during a global health crisis, one 21-year-old has managed to collect two properties in Australia’s priciest city in just one year.

James Brown secured his first slice of Sydney real estate in August 2020, after pooling finances with his cousin.

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The pair, both in their early 20s, had no cash injection from parents to buy but still managed to purchase a one-bedroom apartment together in the affluent eastern suburbs pocket of Vaucluse for $750,000.

James Brown bought his first property in Vaucluse with his cousin. Picture: Justin Lloyd

In mid-2020, at the height of Covid confusion, Mr Brown said he and his cousin decided to leap into the market while others were hesitating. As a result, they saw the unit’s value grow by more than $100,000 in 12 months.

Back then he was working part-time at a pub and part-time with buyer’s agency ‘Your Empire’ while his cousin was working with the army.

“The whole idea from the outset was for us to both try and get our foot in the door together, and we did. Then after that, I thought I’d try and go off on my own,” he said.

Fast-forward one year and Mr Brown has bought his second investment property alone, for $770,000 – a one-bedroom unit in the pricey north shore suburb of Cremorne.

This time around, market confidence has flipped 180-degrees, with buyer demand currently outstripping supply in Sydney and many other markets.

Despite the increased competition from purchasers, Mr Brown said he still felt that it was the right time to buy property number two.

“It’s about buying when you have the opportunity. Last time a lot of people were saying it wasn’t a good time to buy. Now, it’s almost the opposite in terms of market sentiment. However, I knew I could buy, I had the money, I could borrow the money, so it made sense to buy again,” he said.

Mr Brown has since purchased a second property in Cremorne. Picture: Supplied

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“Interestingly, even though the market is very strong there are still a lot of people saying ‘Oh, why would you buy now when the market has gone up so much? You’ve missed the boat.’ But the thing is, when the market was a bit shaky the same people were saying not to buy. If you listened to them, then you’d never actually buy,” he said.

Mr Brown said taking an educated leap into the world of property investing can be tricky for his generation because they can feel paralysed by information overload.

“That’s probably one of the hardest things; you’ve got so many people telling you what to do or what they think you should do. Nine times out of 10 – or probably 10 times out of 10 – I think it comes from a good place,” he said.

Mr Brown has since purchased a second property, nearly a year after his first purchase. Picture: Supplied

“I’m very conscious of who I take my advice from. At the end of the day, I’m doing what’s right for me. But what’s right for me may not be right for someone else,” he added.

After ditching the pub gig and taking up full time work as a buyer’s agent and property development site analyst with Your Empire alongside property entrepreneur Chris Gray, Mr Brown decided against just pouring money into his existing mortgage, instead adding to his portfolio.

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“For me it’s about holding as large of an asset base as possible, for as long as possible. We bought the Vaucluse property for $750,000 and it’s now worth about $850,000 to $900,000.

“If I stayed with that one property it would be my whole portfolio, whereas now with the Cremorne property as well, which was $770,000, my portfolio is worth about $1.2 million.

Inside Mr Brown’s second property. Picture: Supplied

Obviously, growth on a $1.2 million portfolio is better than having growth on a $425,000 to $500,000 portfolio,” he said, adding that he is prepared for whichever direction the property market takes in the near future because his sights are set on a 10 to 20-year property plan.

Rising real estate prices across the country have frustrated countless first-home buyers, but Mr Brown said younger purchasers should consider all options if they are serious about getting on the property ladder.

“My advice is to consider it as long as the banks will give you the money, as long as you’ve got the deposit, and as long as you’ve got a cash buffer just to make sure you can get through any downturns in the short term,” he said.

“Ultimately, if you’re comfortable and you’re not going to have sleepless nights then I’d say take the risk – and I don’t even think it’s that risky if you do your research. You’re always going to be slightly nervous and unsure, but that’s sort of just the nature of it. Sometimes you’ve got to be a bit uncomfortable for it to actually work,” he said.

And when it comes to being just 21, Mr Brown said youth shouldn’t be an obstacle to beginning a property portfolio. In fact, he believed it should be considered an asset.

“When you think about the world right now, none of us have been in a situation like this before so it’s important to be adaptable. And maybe the younger you are, the better equipped you are to adapt. Maybe experience isn’t always a good thing,” he said.

Many young buyers find it difficult to take the first step into the property market.

The pandemic has also accidentally taught younger generations to save, so his advice is to embrace new-found lessons in budgeting.

“If you’re not spending as much now with all these lockdowns – well, I know I’m certainly not – then now is the best time to invest. And while you don’t have kids or dependants, then personally I feel like my appetite for risk is probably higher at the moment than it may be in 10 or 15 years’ time,” he said.

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He admits that while he had no cash gift from family to get started, the fact he still lives at home is a significant financial leg up that not every first-time buyer has access to.

Mr Brown says said younger purchasers should consider all options if they are serious about getting on the property ladder. Artwork: Steve Grice/The Advertiser.

“I guess my circumstances are probably different to some other 21-year-olds, but there are other ways to get started like trying to increase your income where you can or doing a joint venture with someone else,” he said.

“Buying with someone can work really well as long as the expectations are very clear from the outset and you have a good experienced solicitor on board, that’s the most important thing. You just need to think outside the box,” he said.

Originally published as How 21-year old bought two blue-chip Sydney properties in one year during a pandemic