ABOUT HUNG KWAN
- Occupation: Pharmacist
- Age: 50
- Family: married with three children in their 20s living at home
- Began investing in residential property (year): 2000
- Property portfolio value (including principal place of residence): $17 million +
- Number of houses you own (including principal place of residence): 22 residential +1 commercial
Hung Kwan owns his own home, and has a portfolio of 21 residential investment properties, and one commercial property. Most of that investment has occurred in the past 10 years.
At seventeen, Hung Kwan moved from Hong Kong to Melbourne to finish his high school studies and go to university. When Hung qualified as a pharmacist, the pharmacist responsible for his on-the-job training offered Hung a one third partnership in the business. Hung borrowed the money to invest in the business which was a small loan and repaid it in about three years. Around that time, with some savings and help from his parents, Hung also put a deposit on a house in a brand new development in Doncaster East, an outer eastern suburb of Melbourne.
Hung had no other investments or savings until a friend encouraged him to contribute monthly into a share trust. He had no knowledge of investments and thought regularly investing a small amount of money and getting something at the end was better than nothing at all. All went well until the stock market crash of 1980. Hung reflects, “I lost money but I didn’t have the know-how to look for other investment options so I just concentrated on building up the business and going out and having fun.” In the late 1990s, Hung turned to residential property investment. He went to a few property seminars but it took him a while to understand the concept of negative gearing and capital growth. He didn’t feel confident in his ability to deal with investment property and it seemed like a ‘hassle’. In 2000, Hung saw an ad for Custodian and went along to hear John Fitzgerald speak. He says, “The main push to invest came from listening to John. He seemed straight forward and honest and I thought here’s someone who can do everything for me.” Hung bought his first Custodian property in Queensland in 2000. In the following year he bought another three, again in Queensland. He stopped for a while, concentrating on his business and consolidating.
Later, Hung went on to invest in ‘period homes’ within a seven kilometre radius of the Melbourne CBD as well as in other sort after locations. However, he reached a point where he felt the strain on his cash flow. “Those houses have large capital growth but they’re also very expensive. The rent is very low – 2.5 per cent,” Hung explains. “Now I buy new properties in outer suburban areas. I get a higher rent return and I can get good depreciation and tax advantages. I am just about to settle on four more Custodian properties.” Reflecting on his wealth building journey so far, Hung says, “Apart from property I’ve also invested in shares, day trade options, CFDs and derivatives, but they’re very unpredictable and eventually, I lost money on them.” Hung likes property as an asset class because it is stable, highly geared, there are good tax advantages, no day-to-day worries, and the banks love it as security.
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*extract from Custodian Millionaire Case Studies magazine printed in 2012.