Dire warnings that the time for investing in property had passed greeted Sharon Cullwick when she first started thinking about doing so. It wasn’t the advice she expected. Nor was it encouraging. But instinct led her to ignore it and pursue her property dreams.

It was the right call. Following her instinct paid off for Cullwick. Twenty years on, she has a nine title, 13-income stream portfolio which provides her with a decent annual income. To top it off, she has just become the NZ Property Investors’ Federation’s first woman president.

As such, she is a staunch advocate for the benefits that property investment can bring across the board. Not only is the provision of rental properties a crucial social service, but it opens up opportunities for individuals, she says. “For me, investing in properties has helped me get a lot further financially than I would have got from just working.”

Property investment may have become a calling for Cullwick, but it wasn’t always this way. While many investors come from backgrounds where property has played a part, she doesn’t. “I haven’t got any family who are into property investing, there was no history there before I got into it.”

But back in the mid-1990s, she was living in Sydney, working in the clothing industry and feeling like she just wasn’t getting ahead. Then, late one night she watched a TV show about property.

“It featured a man who earned less than I did but owned five houses and was doing well. The main guest was Jan Somers, an Australian property investor legend. I watched them and it really got me thinking. I thought maybe that’s something I could do. It was my lightbulb moment – it triggered everything.”

Cullwick spent the next two years reading all she could find on property investment, schooling herself in preparation for the journey she wanted to embark on. In the end, it was Jan Somers’ investment strategy that held most appeal for her.

Somers famously stuck to a buy-holdrenovate formula with a focus on yields. “I thought I would follow that strategy. That is what I initially set out to do. And what I have largely done. My motto has always been ‘to have and to hold – or to drive past’. I just don’t like to sell.”

Portfolio Building

Armed with a strategy, Cullwick began searching for the right property to begin her investing journey. She wanted a property which would return high yields. Still living in Sydney, she looked there first but quickly discovered that the sort of yields she was looking for were more likely in New Zealand.

In 1999, while on a trip back home, she found and bought her first property in Hastings. It was a four bedroom, one bathroom house with a granny flat at the back. “No one was buying at the time, especially not in the Hawke’s Bay,” she says. “So I got it for $145,000 and it was bringing in $330 rent per week. It was all about yields. And I still have that house today.”

Her next investment was a property in Havelock North, which also offered good returns. After a move back to Auckland for work, she started to buy in the Super City.

“My first Auckland purchase was in Otahuhu. It was a five double bedroom, one bathroom house. It cost $225,000. I sold it recently for $640,000. It’s pretty good growth but it was over a long period of time. It’s not exactly the level of growth that you would expect from the media.”

In 2004, she bought a second Auckland property, this one in Mangere East. It was one section with two houses on it and it was one of the triggers for her preference for dual income property deals. To this day, she tries to invest in dual income properties.

Over the subsequent years Cullwick got married, started a family and moved to a series of different locations: Taupo, Dubai, Hamilton and then finally Havelock North. Much like her property role model –Jan Somers before her – she acquired a series of properties along the way.

One of her few regrets is that she didn’t buy more properties in Auckland when she was living there. “At the time, I bought as many as I felt comfortable with so that’s fine. It’s just looking at the Auckland market’s performance in recent years, it does make you wonder.”

However, since arriving in Havelock North in 2016, she has been on a bit of an investing binge. Along with a family home, which they are shortly to exchange for another, she bought four properties in the Hawke’s Bay. The family home in Havelock North has given her the best capital growth, making $200,000 in 18 months. But all of the new investments return healthy yields.

She says her recent investing was prompted by the amount of equity that had built up in their Auckland and Hamilton properties thanks to the recently supercharged market. “For example, one of our Hamilton properties used to have a garage in front of it, but now that site has been converted into a restaurant and the value has shot up.”

‘People need houses to live in and not everyone can afford to, or wants to, own their own house. So there will always be strong demand for accommodation’ SHARON CULLWICK

Solid Relationships

These days Cullwick, who is also the vice president of the Hawke’s Bay Property Investors’ Association, is a fulltime property investor. She runs her portfolio tightly and manages most of her properties herself, although she does use thoroughly vetted property managers for her Auckland and Hamilton properties.

Being an effective investor and landlord is all about relationships – with tenants, property managers, tradies, banks, insurers, and with agents, she says. That’s because it means friction is avoided, information is shared and business runs smoothly for all involved.

In Cullwick’s view, good relationships are critical when it comes to tenant management. “I like to have good tenants in my properties for the long term. It’s easier for me because there is a lot of work involved with constantly having to find new tenants and get the property and paperwork in order. And good, happy tenants will take care of the property too.”

For this reason, she is very friendly with all of her tenants. “We have regular chats and I think it’s important to be yourself with them and to treat them well. It works for me. One of my property’s tenants have been there for 11 years, another for eight. I have got to know my tenants’ whole families – kids, parents, grandchildren – over the years. I was even invited to a wedding in Fiji by one of my tenants. And I have never had to give a tenant notice to move out.”

Adding value to her properties is another important part of Cullwick’s approach. As a result, she has done a lot of renovation work over the years. But it is something that, if done sensibly and well, always pays off, she says.

“Some good examples are my two Hamilton properties. I bought them in 2014. I then spent $45,000 on each house. I put in new carpets, new bathrooms and new kitchens, and painted both the interiors and exteriors. They looked completely different after the work was finished. I did it because it made a rent increase possible. Those properties went from bringing in $250 to $320 rent per week. So it was worth it.”

Challenges Ahead

While Cullwick believes there are always good property deals to be had if you look hard enough, she says the current environment is challenging for investors. Not only has the market softened after its boom run, but there is a lot of uncertainty around new government policies.

Landlords are facing a significant increase in regulation and compliance requirements, along with the associated costs. Then there are tax changes, like the end of negative gearing, as well as whatever comes out of the Tax Working Group.

No-one is sure of exactly what is to come – a rental property WOF or capital gains tax could be introduced – and the uncertainty is hard, she says. “A lot is now being asked of landlords and that looks set to increase. So there are a lot of investors out there who are thinking that it’s all become too hard and who are selling down their portfolios.”

Given the climate, she sees part of her role as NZPIF president as trying to get the message out to the wider public that property investors are average people just trying to make a living. “But my main focus as president will be on growing membership throughout the country and across the age groups to provide support to the investors, and aspiring investors, out there.”

That’s because Cullwick continues to believe there is a future for investors. “Often people think they will get into investing and then never really do. It does take time to build up relationships and do research and they sort-of lose impetus. And now there are all these extra challenges.”

But property remains a solid investment and, going forward, she plans to do more investing herself, she says. “Simply put, people need houses to live in and not everyone can afford to, or wants to, own their own house. So there will always be strong demand for accommodation, especially decent accommodation.”