The Leanne Erkes Interview : Invest In Property For The Future

The Leanne Erkes Interview : Invest In Property For The Futurue

The Leanne Erkes Interview : Invest In Property For The Futurue

The second of our real estate interviews involves Leanne Erkes who has a great story to tell – one which will both impress and pull at your heart strings. This is a very personal and a very open map of her hard journey to financial independence in Australia and the terrible set-backs which she experienced along the way. We hope that you enjoy the latest in our property market interviews and look forward to receiving your feedback.

What is your view of the worldwide real estate market over the next 12 months?

My best guess (or hope perhaps) is that the real estate markets worldwide make a full recovery and that everyone who owns property can benefit from a rise in the market. I can already see that happening in the areas that I invest in. Prices are starting to move upwards, which is great but this doesn’t mean that every real estate market in the world is going to do the same thing. I’d love to have a crystal ball, but alas I don’t.

What is your view of your specialist real estate markets over the next 12 months?

I invest in what I call “bread and butter” properties, that is a modest size 3 bedroom home on a good size block, close to an employment zone with good infrastructure, usually on the fringe of a prime location. I believe that these kinds of properties will always be in high demand because of their rental affordability, particularly to the kind of tenant who will never be in a position to buy their own home.

Is cheap finance supporting the worldwide real estate market?

No, I don’t think so. Isn’t “cheap finance” what caused the real estate crash in the first place? Maybe that seems too simplistic, but it certainly had a lot to do with it. Lending money to people who really could not afford to pay back a loan is not a good business decision, and it ultimately affected a lot of people worldwide. Hopefully the banks have learned their lesson.

As a property investor I borrow money all the time, but I am also smart enough to know when I should back off and not overcommit, even if I can get cheap finance; I can see the big picture. But for a lot of people borrowing money to invest, the big picture is not explained to them and all they see is the excitement of borrowing for their first investment property or first home. When the terms of the loan change after 12 months or whatever, or interest rates rise, they find themselves in financial trouble and wonder why.

Do you believe that politicians have too much influence over real estate markets?

It depends on the Country you live in. The politicians can make it sweet or sour for property investors based on the policies they implement. For example, here in Australia the politicians impose “stamp duty” which is a tax they charge upon the purchase of a property, whether it is owner occupied or an investment. Depending on the purchase price of the property, this could add between $10,000 or $25,000 plus to the cost of buying the property. This needs to be factored in to your borrowing costs, unless you have cash reserves to pay this upfront.

I know that New Zealand doesn’t have this ridiculous tax, so the advertised purchase price is just that. Then there’s capital gains tax in Australia when you sell. Why should the Government get a percentage of your profit when you sell? These taxes really impact on the profit margin for an investor. And don’t forget that a lot of investors are just the “mum and dad” type of investor trying to create a better financial future for themselves and their family, so I am not talking about the major players here.

How did you start out in the real estate sector?

The thing that got me started in the first place was a sentence I read in a book that said “what are you going to do for money when you leave the paid workforce?” At that time I was newly married, just bought our first home and worked in a job I didn’t like which took several hours a week to commute to. I wanted to leave my job but realised that if I did, I would have no money coming in because I had no savings to fall back on. This hit me like a bolt of lightning. At that moment I decided that I would take charge of my financial future so I didn’t need to rely on working 9-5 for the rest of my life, or worse, relying on Government hand-outs that my not even exist by the time I reach the age of 65.

I was always interested in property from a very early age and although I had a burning desire to purchase a property as soon as I could when I started in full time work, the reality was that I ended up travelling throughout the UK, Europe and Africa for 3 years. Once I came home and got married, that is when I bought my first home. The following year my husband and I purchased our first investment property, and it just went on from there.

What was the best piece of advice ever given to you about real estate?

To buy property that pays for itself. That is, the rental income should cover the mortgage repayments, the rates and the insurance on the property. Any rent left over from paying these expenses is pure profit in my pocket. I usually put this excess into the loan anyway which helps to pay down the loan gradually. This also gives me the ability to leverage into more property to build a sizeable portfolio.

Are you a buyer, seller or holder of real estate at this moment in time?

I am a holder of property and I am also on the look out for buying on a regular basis as well. It is a passion of mine, so I am continually searching for my next real estate deal.

What would you say to someone looking to move into real estate investment on a full-time basis?

I would say that it is a fine investment option and I would give anyone who wants to start investing in property all the encouragement and advice I could give. It has served me very well and has set me up financially for life.

Could you tell us a little bit about yourself and your involvement in real estate.

I live in Australia with my 3 children, aged 15, 13, and 5. My husband and I built up a multi-million dollar property portfolio on very modest wages over a 10 year period. I was about 33 when we started buying property and I created my own 10 year financial plan which was basically buy 10 properties over a 10 year period, then sell 5 to settle the debt on the others. The plan was to live off the rents of the remaining 5 houses, debt free. This plan worked perfectly. Fast forward 10 years and we were both ready to start selling up and retire at a very young age. But then the unthinkable happened….my husband died suddenly.

How would you describe your journey in the real estate sector?

When my husband died I was four months pregnant with our third child. I was ready to leave work permanently and be a stay at home mum for our three children. My husband’s unexpected death put the brakes on everything for a while. Although the portfolio we had accrued saved me from financial ruin when life dealt me such a cruel blow (see my full story at it enabled me to keep my head above water, particularly in the midst of the global financial crisis. Since my husband’s death I have continued to buy more properties to grow my portfolio.

The key message I want readers to take away from my situation, is that if I had not invested in property at all and continued to live week to week on our wages for the previous 10 years, as most people do, my husband’s death would have left me on the poverty line and I would now be living on welfare and living in Government housing trying to support my three children. Investing in property has given my children a bright financial future after being faced with the tragedy of losing their Dad.

Here is a short bio of Leanne Erkes:-

I spent my early childhood in the inner western suburbs of Sydney, where my Dad worked 3 jobs to make ends meet, and my Mum stayed at home to care for me and my brother and sister. I certainly wasn’t born into riches but I did have a burning desire to fend for myself financially. I am not sure why I was so driven but I just knew that I had to make my own money and not depend on anyone else. Property is what interested me, but if it wasn’t property, I would have achieved financial independence doing something else.

My teenage years were spent on the Central Coast of New South Wales where I started working full time once I finished school. The travel bug hit and off I went backpacking around the UK and Europe for 3 years. This is where I met my husband, Peter, a New Zealander. Ours was a typical boy meets girl scenario and once our travel days were over, we headed back home, got married and settled in Australia (although we always torn between settling in Oz or NZ). We rented for the first 12 months of our marriage, then bought our first home, had two children in quick succession, and each year thereafter bought more houses to build a multimillion dollar portfolio over a 10 year period. My husband’s unexpected death in 2008 shook me and my children to the core. Since my husband’s death, I have continued to buy property and build my portfolio.

My website is devoted to teaching people, particularly women, to take control of their financial future. My real life situation is proof that even with the best laid plans, life can throw a curved ball from left field and pull the rug from under you. In the depths of my sorrow from losing my young husband, and trying to comfort my young children, at least I had a glimmer of hope knowing that I had a positive financial future, even without life insurance (and that’s another story!)

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