Jules Thomas is the first to admit that marrying her high school sweetheart has given her and husband Sean Thomas a head start in achieving financial security at a young age.

However, the couple’s commitment to that mutual goal is not something every young couple naturally has; their tenacity and long-term outlook means the pair has experienced early financial success as property investors and at just 30 years old they were mortgage free on their own home.

They’ve simply achieved their goals through “Good, calculated risk,” says Jules.

They bought their first investment property in their home town, Napier, at just 26 years old. They had already bought their own home in Taradale and had some equity available so they thought they’d just “give it a go”.

Once equity built up in their Maraenui rental property, they were able to purchase three more rentals in Taradale in 2003.

“They were hard work. The tenants couldn’t afford to be in those houses, so you were always chasing rent.” says Jules.

The financial pressure of managing their portfolio, combined with starting their family, meant that at just 29 years old Jules and Sean started to sell up their rental portfolio and by 2005 they had sold the lot.

They focused on paying off the mortgage on their own home and over six years had four children together.

Back In The Game

By 2012, with the family growing in age and the demands of parenthood lessening, the couple decided to get back into the property investment game. They had been mortgage free for several years on a self-build family home, which meant they had the equity to start purchasing.

Unfortunately, their bank “wouldn’t touch them with a barge pole” says Julie, because she wasn’t yet back working.

Finally they approached Kiwibank who did everything they could to help the couple start investing in property.

They were able to purchase a three-bedroom house in Tamatea, in 2012, followed by two, two-bedroom townhouses that same year.

‘If I can’t get the rent to cover the rates, insurance and mortgage, I won’t do it’ JULES THOMAS

There were some difficulties with tenants at one of the Tamatea townhouses and the police had to be called to remove a tenant’s partner who was damaging the property.

Jules and Sean were looking to sell the two leasehold cross-lease townhouse properties – one of which they had approached the neighbour to buy.

Because they owned the two houses and were able to freehold the land, they “increased their value by $100,000”.

One of the townhouses was purchased for only $90,000 and was sold for $240,000 after just two years, in 2014.

This freed up some cash to purchase two, one-bedroom apartments in the city centre.

Jules had had the idea to get into apartments when they were searching for a holiday home in Taupo. They were attracted to the idea of a Taupo apartment to rent out as short-term holiday accommodation, but while they were there looking, Jules realised they could apply the same idea to purchasing Napier apartments.

But when she started looking at the sums, it made more sense in terms of stability, for the apartments to be rented out on long-term rental agreements. The rents covered the weekly expenses, so it was a no-brainer for a hands-off investment.

They now have three apartments in the same complex, which Jules says have been a fantastic investment. However, there are key aspects of due diligence to pay attention to when looking at this niche investment.

“Do your due diligence on the body corps, take the time, read the minutes from their meetings, their AGMs; find out if there’s a long-term maintenance fund; talk to other apartment owners; and make sure your solicitor is really good and knows what they are talking about,” she says.

Building The Portfolio

A year after purchasing the last apartment, the couple were ready to go again. They bought a three-bedroom house in Greenmeadows, which had increased in value by $30,000 over the six week period between signing the deal and settlement.

The Napier market was certainly on the rise, and the couple wanted to capitalise, so in December 2016, they bought another three-bedroom house in Taradale, followed again by a similar purchase the following February.

The rapidly rising Hawke’s Bay market made it possible to use equity to make their latest and most significant purchase, a set of three, three-bedroom houses on Bluff Hill, all in need of renovation.

The three properties had been subdivided onto their own titles by a developer and Jules and Sean purchased them for $1.2 million.

Sean spent several months, outside of his full-time job as a service manager, renovating the properties and installing new bathrooms, extractor fans, and rangehoods, bringing all three up to the 2021 regulations.

“We didn’t see much of him for several months,” says Jules.

The houses now rent out at $520 per week, each.

Jules says buying neutral and positively geared properties is now possible in the Hawke’s Bay market and “If I can’t get the rent to cover the rates, insurance and mortgage, I won’t do it.”

Kids In Property?

The Thomas’ four kids, who are aged 10, 12, 14 and 17 have been raised with property investment and land-lording as a constant backdrop to their childhood, and Jules and Sean are active in passing on their knowledge.

It’s not unusual for the family to discuss property figures over dinner and they have instituted a “pocket money” system, which aims to help their children think about both saving and investing their money.

Is it paying off? We speak to the eldest and youngest about what they think about their investor parents.

GRACE, AGED 10

Q. What do you think of your parents being property investors?

A. It’s good, because lots of people don’t have homes or apartments and we provide them for them.

Q. Are your parents nice landlords? Why?

A. Yes, because they take care of the surroundings, like the people and the garden and they put in their own time to be at the apartments and houses … they don’t care about what people move in, as long as they aren’t bad people.

Q. What have you learnt from them about investing?

A. That it takes lots of time, because you need to organise the apartments and find the people to live in there, and you spend lots of money.

KIMBERLY, AGED 17

Q. Have you learnt any financial skills from your parents being investors/ landlords?

A. I’ve already started saving, I’ve got a few savings accounts already. My mum always says to prepare for the future.

Q. What’s the best thing about your parents investing in property?

A. When the rent comes through and they’re smiling.

Q. Are your parents good landlords? Why?

A. Yes because they let their tenants choose the colour of their house and the carpet. [It’s important] because it’s the tenants living in the house, not my mum and dad. My parents are amazing, they’re pretty cool people and they always care.

Self Managers

While Jules runs a full-time hair product business online, she also manages all the couple’s properties. She says it’s “very easy” and “you become a good reader” of potential tenants.

Jules advertises their properties for rent via Facebook and she asks potential tenants to message her with a blurb about themselves.

She says this weeds out those that are truly keen, and because rental supply is tight in Hawke’s Bay, she usually A healthy home is a hot investment Find out how to keep your rental healthy at raisethestandard.nz selects a list of six to view the property.

“I look at our tenants as our customers,” says Jules. For this reason, she treats them as valued clients and it seems to have paid off. “We have fantastic tenants in all our properties.”

Their relationship with their tenants is so good, that recently when there was a significant ongoing plumbing issue at one of their rentals, which required the plumbing to be shut off for a week, their tenants came and showered at their own home.

“These guys were saints, they really were.”

Because they understand families’ needs, Jules and Sean rent mainly to families and only buy properties they would live in themselves, because “We have a moral obligation to look after the people that we house.”

Naturally, every single one of their properties is already compliant with the 2021 standards.

Looking Ahead

With 10 properties in their portfolio, that are now all paying their own way, Jules and Sean are eyeing up early retirement at age 55, in ten years’ time.

Sean has enjoyed renovating their properties so much that he’d also like to become a full-time trader in the meantime.

Their advice for investors who want to secure early financial security is to prioritise the wellbeing of their customer.

“I feel like when you rent from us you’re getting some pretty cool landlords, if anything goes wrong, we’ll be there immediately.”