talking to friends who own their own homes and picking the brains of
those in the know. Don’t hold back.
From my experience, the people who really want to find out generally
soak up information like a sponge and they become very knowledgeable
very quickly. That’s because their personal radar system zones in on
anything to do with home ownership and how to do it.
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One more thing you need to be aware of. My way of approaching this
subject involves money saving strategies that may seem trivial, basic or
unlikely to make much of a difference, but it is those strategies which
tend to get overlooked simply because they are viewed as such. Making
a start involves building from the basics and quite literally from scratch.
One of the biggest barriers for people trying to make any headway into
something that seems totally out of reach is the fact that much of the
information that is out there says you can do it starting from scratch or
from nothing at all, but in actual fact still requires you have a secure well
paid job, no debt, the ability to easily access loans and so on.
Unfortunately, this leaves a large group of people who don’t have those
prerequisites floundering.
I get annoyed when I hear people at conferences or seminars speak
about how to get to your dream, build wealth or get rich from scratch,
and then go on to talk about using your own house as equity to buy
shares, get the best return on your taxable income, or how to maximise
your current money in short or long-term managed funds and so on. I
feel like standing up and shouting at them, “You said from scratch!” If
you have a house already or an income where you’re trying to get the
best taxable return, then you are NOT starting from SCRATCH!
I’ll be going back quite a few paces to actually get people to think
about how to go forward and where to start even if they have very little
to start with. My lessons involve actually starting from the bare bones:
from the beginning of a savings plan to building confidence when facing
the many and varied services you will need to be in contact with. I will
try not to assume anything about people (and if I do I sincerely
apologise for the oversight), and work from the very beginning if I can.
20
Who is Tracy Harvey?
So who am I - and what makes me think I can teach you ways of
getting into your own address when it all seems impossible?
Well, I don’t profess to know it all, in fact, I continue to embrace new
information when it comes my way, but I am someone who
acknowledges that nothing gives more credibility than when it comes
from someone who has ‘walked the walk’, so to speak.
Yes, it is possible to get an abundant amount of information from this
world of information overload, but unfortunately the human aspect often
gets lost along the way and to me, it is the human aspect which is the
magical component to overcoming any adversity.
I’m an ordinary Australian mum, in my mid-forties, who grew up in
Western Australia but now lives in Queensland.
I’ve had to live pay week to pay week, experienced repeated
knockbacks by financiers, barely survived on welfare for nine long years
(not including when I was a child), lost all the assets I ever owned to
have to start all over again not once but several times, grew up in a
single-parent family living from hand to mouth, went through the
highest home loan interest rates ever recorded in Australia, watched my
mum and step-dad’s house get repossessed by the bank, lived in the back
of a car, in caravans, tents, with family members and in what should
have been condemned dwellings. I have subsisted on a single income
with children and one with a disability, lived well beyond my means to
become swamped in debt and suffered an illness that continued into deep
depression.
As a child my life involved moving around from one rental premises
to another and that meant adjusting to different schools, making new
friends and always looking for stability. When I was twelve years old,
my parents broke up for the final time, and with four children, no home
of our own and no job, my mother was forced to apply for a community
service pension until she could secure employment that worked around
school hours. We eventually settled in a housing commission suburb
called Langford, and basically survived hand to mouth week to week.
When I was old enough to leave home, I did. At the tender age of 16,
I worked three jobs in low-paying positions in order to survive. I slept in
a shared one bedroom flat in the then high crime suburb of Victoria
Park.
When my first child was born I was 21 years old and living in rented
21
accommodation in Brisbane, Queensland with my first husband. The
birth was horrendous leaving me very unwell for over a year, but it was
son who suffered the most. He would later be diagnosed with Aspergers
Syndrome (high functioning autism).
By 1992, my marriage was over and I found myself with two
children, one with a disability. I had no employment, no experience and
very little money. I was forced to claim a single mother’s pension to live
on, just as my own mother had had to do when I was growing up. Within
two years I lost my home, my son (custody was given to his father) and
had blown my monies received from the marriage settlement. I still had
no job, no regular income and became involved in a violent co-
dependent relationship.
By 1997, I was at the end of my tether and contemplating suicide
after being diagnosed with cervical cancer and not even being able to
afford to get an abscessed tooth treated. With no money and no
prospects, my future and that of my remaining custodial child looked
bleak.
By this stage my biggest dream was to own a home, one that would
be wholly owned by me, that no one could take away. It was a dream
that seemed way out of reach, an unlikely fairytale, but I wouldn’t let
that hope fade. I’d daydream regularly about what it would look like and
how I would furnish it. I didn’t know how I would do it or where to go
for help, I just knew I had to do it.
I turned my personal hopelessness into a life of meaning and secured
my own home and many more within four years. I am now considered, if
you believe the media hype, a self-made multi-millionaire.
But I quickly discovered that it wasn’t the dollar value that would
make such a huge difference to my life as much as the sense of security
of knowing I have my own comfortable place to come home at the end
of the day. It is my sanctuary and I believe this is a place everyone is
entitled to have.
I no longer live precariously on the edge of a razor’s edge wondering
when to duck or weave from whatever it might be that is likely to come
unstuck. And I no longer need to count every penny on every day just to
make sure my family is fed.
No, I didn’t receive an inheritance, win a lottery or find myself a
benevolent sugar daddy to
kick-start my future, but I did change
something about myself and the way I was thinking.
I started by setting goals towards my dream no matter what the
obstacles - I just had to overcome them. One of those obstacles was
22
getting knocked back time and again for a loan by the major banks.
Other obstacles were many and varied but my focus remained. Each
small inroad encouraged me to keep going until… one day I sat down
with the telephone directory and began ringing one financier after
another, asking them what I needed to do in order to get a small housing
loan. Most had similar lending criteria but I eventually found one lender
who was at least willing to work with me, not against me.
The lending criteria were more flexible but the loan cost was higher
due to the risk factor. In other words, the interest rate would be at a
slightly higher rate and I had to pay an extra for each month on top of
the interest rate. I did some sums and knew that if I stayed vigilant with
my payments I could do it. The loan was for an owner-occupier only,
which meant I wouldn’t be able to borrow again for an investment loan
with the same financier.
In May 1999 I bought my first solely owned property. The tiny unit
was in disrepair and without any kitchen to speak of, but I didn’t care. It
was mine. I went without some basic essentials (such as a completed
kitchen), until I believed I’d paid a sufficient amount off the loan to
warrant the expense of putting a kitchen in. When I did, it was courtesy
of salvage yard, secondhand shops and garage sales.
I continued to pay extra money off the mortgage as often as I could,
even going so far as using birthday present money. Within 18 months I
had accrued enough equity to start looking at buying another property.
By this time I had become gainfully employed but my income was still
only $28,000 per year, which didn’t make me a good candidate for an
investment loan.
Again, I approached lenders one after the other and again I couldn’t
get anyone to give me a go. So… I sat down on the floor and went
through the telephone directory again, ringing one lender after another.
Eventually, I found a lender who would give me an appointment. I knew
it was up to me to sell myself and as hard as it was to convince the
lender, my payment record and determination shone through and I was
given the go-ahead to purchase my second very cheap property.
By 2002 I had purchased two more properties using the equity
accrued from the first property and still own each of them to this day.
My portfolio has grown substantially since then, but I am still an
ordinary mother with more determination than ever. The only difference
is that my goals have changed. My main goal now is to work hard at
demonstrating to people, particularly battlers, that home ownership is a
possibility and that it can be done!
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Furthermore, while getting my own home was at the forefront of my
goals, I soon discovered that the journey would not only provide me
with monetary rewards, but other life experiences that I will always
cherish.
In 2006 I wrote a book called Goodbye Welfare. The book was aimed
at people struggling to get off the welfare cycle. My experience was that
limited (if any) relevant information was available to help people who
was stuck in the welfare cycle. This lack of education, I believed,
contributed to the perpetuation of welfare dependency. As a Community
Services Worker I discovered there was a need for some guidance and a
pathway available to people who had never been given the opportunity,
much less information that would assist them, to overcome barriers and
to get them off the cycle of poverty.
Although the book was given little recognition by the community
service sector, it became an overnight success commercially after my
personal story was screened and featured nationally on Australian and
New Zealand television. The story demonstrated how I went from being
a single mother and having to live on a single parent’s pension (welfare
payment), then turning my life around at 35 years of age, getting
educated and building a property portfolio worth millions. When my
story was aired in New Zealand it was received with the same
overwhelming response.
No one was more surprised than me. I received thousands of long
personal emails from people desperate to achieve what I had done in
getting off the welfare cycle and becoming financially self-sufficient.
After people had read the book, they were keen for more information.
Many people requested this next book because they wanted to know
what to do now they had built their self-esteem and could visualise a
much more promising future. They had become personally motivated
and the possibility of doing better was in reach. The enthusiasm from
readers encouraged me to find out more ways for them to get to where
they wanted to be.
This book was written in response to those numerous requests from
people wanting to know how I managed to independently buy my first
home and how they too could achieve the same goal. To the many
people who wrote to me, the most important aspect of becoming self-
sufficient was in finding a place that provided a sense of security and
stability - a place that most people longed to have as their own - and that
place is their own.
With my personal experience overcoming some major barriers, I hope
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to demonstrate some of the possibilities there are with property and why
you can consider your future in a home of your own even when the ‘big
guns’ are telling you, you can’t!
Since my last book was published many people have been followed
my ideas and achieved much more than they had ever thought possible.
Their success has been my inspiration and it is my hope that my
motivational techniques and guidance will see as many people as
possible to eventually having and keeping their own homes.
My first demo renovation
I learnt how to sand, demolish, paint, plaster and pave. I went straight
from work during the day to renovating at night - phew! DON’T
PANIC! You don’t need to do all this to get into your own home, this
was my choice. I loved turning an ugly duckling into a swan, but it’s not
for everyone. There are other simpler ways… read on.
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Starting at the end
At the completion of this book, home loan interest rates in Australia
have risen for the 12th time in six years, which has quite literally
doubled the cost of mortgages since April 2002. Neighbouring New
Zealand is also experiencing the same level of volatility in the housing
market and the pressure on rental availability in both countries has
further intensified.
In the US the slump in the real estate market is considered to be so
severe (the number of home vacancies doubling to 34%), that some
economists are predicting a ‘Second Great Depression’
(www.marketoracle.co.uk).
Why then wo
uld anyone want to consider buying into such an
unstable market like this, even if they could?
The answer is very simple.
Regardless of what is happening in the world at any given time…
everyone needs a place to live. And in developing countries there really
isn’t any excuse for not having one’s own home. And that, my friend, is
the focus of this book.
All the monetary rewards that can be achieved from owning your own
home will be outlined, but the primary focus of this book is to get you
into a home of your own and to ensure you keep it. At present, the media
is showering us in negativity about home ownership, from the difficulty
of getting into your first home, to the continual rise on home loan
26
interest rates.
But what is not being portrayed in among the negative noise is the
realisation that having a home is still a basic requirement for life, and
that property is still the best performing investment on the planet!
There are so many other costs that we seem to have accepted in our
day-to-day living, such as paying three times more for bottled water per
litre than petrol, even though we can get water for free from the tape
(more on that later), and accepting without question the cost of mobile
phone calls for every minute you’re on it, as apposed to the old way of
one call, one minimum payment. It is this expenditure that has continued
to erode incomes without any of us thinking about it, but the
consequences have arrived and the basics of life are the hardest being
hit.
So… when you hear a financial expert suggest you might need to cut
back on some luxuries and you assume this means fewer trips to the
movies and more videos at home, it doesn’t.
I will give the same advice but it will involve a much more defined
description of what is meant by luxuries and what absolutely has to go -
starting now! In fact, the current generation has been indulged with so
many expendable and replaceable items that it may be too difficult for
them to determine what a luxury exactly is.
Later, I give my interpretation of the ‘Me Generation’, the generation
born between 1978 and 1995, and my concerns relating to their
resilience should some sort of cataclysm occur, such as a depression.
Goodbye Renting Page 3