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Jan Somers: How this Housewife Built Her Multimillion-Dollar Property Portfolio from Scratch

The Property Couch

Mon Nov 27 2023



Jan Somers' Property Investment Journey:

  • Jan Somers started her property investment journey in 1972, following a borrow, buy, and keep strategy. She initially accumulated properties due to frugality and continued the pattern as she moved from one house to another.
  • She highlighted that there were no mentors available during her early days of property investing. Her advice for people with multiple properties is that they know more than anyone else about anything else.

Borrowing Strategy and Debt Management:

  • Jan emphasized the importance of borrowing money to purchase assets that would appreciate in value over time. She advocated for assessing what one has to show at the end of a loan period for borrowed money.
  • To manage debt effectively, Jan kept her loans at around 60-70% of total assets. Additionally, she ensured some properties remained completely debt-free as a safeguard against financial pressure.

Long-Term Property Investment Wisdom:

  • Jan reiterated that properly financed and long-term held residential property remains a wonderful investment option. She compared this principle to practices dating back to Roman times, indicating its enduring validity.
  • The interview delved into the mindset shift required when accumulating debt for appreciating assets versus traditional beliefs about paying off debts quickly.

Legacy and Impact on Property Investing Education:

  • Despite being considered a pioneer in property investment education in Australia, Jan humbly expressed that others had likely made more money from property but did not make it publicly available.
  • Although recognized widely within the property investment community, Jan maintained an authentic approach without pushing any personal agenda or product promotion.

Software Development and Analytical Tools:

  • Jan's husband played a significant role in developing software tools for property investment analysis based on spreadsheets she created. This software continues to be relevant today and is available for sale.

Debt Management and Property Investment:

  • Jan Somers highlights the importance of controlled debt in property investment, emphasizing that when rents exceed interest payable, it can be beneficial.
  • She discusses the strategy of holding debt rather than solely focusing on debt reduction, pointing out that increasing rents and property values can help maintain a static level of debt while generating surplus cash flow.

Property Selection Criteria:

  • Jan Somers emphasizes the significance of infrastructure and aspects in property selection, highlighting the need for properties to be close to amenities such as shops, stations, or bus stops to attract tenants. She also underscores the importance of property aspect, particularly in Queensland's hot climate.

Investment Philosophy and Approach:

  • Jan Somers adopts a pragmatic approach towards investing, aiming to accumulate properties without setting an ultimate goal for acquisition. She draws parallels between property investment and personal endeavors like playing golf, focusing on continual improvement over time rather than achieving a specific target.
  • While she acknowledges the potential benefits of living off equity in principle, she cautions about maintaining disciplined control when utilizing this approach to prevent overextension and rapid erosion of equity.

Legacy Planning and Giving Back:

  • Jan Somers shares her philosophy regarding charitable contributions, advocating for directing funds where tangible benefits can be seen. She recounts channeling financial support into junior sporting teams and facilities with visible positive outcomes.
  • Emphasizing the need for results from charitable giving akin to pulling a lever on a poker machine, she underscores the importance of witnessing meaningful impacts from philanthropic efforts.

Financial Education for Children:

  • Jan Somers reflects on imparting financial lessons to her children by prioritizing spending decisions based on other priorities instead of stating outright affordability constraints. This approach aimed at instilling responsible money management practices through example and decision-making rationale.

Property Investment Strategies:

  • The podcasters discuss the concept of a "concrete box in the backyard" as an investment strategy, highlighting its potential benefits for individuals who struggle with impulsive spending.
  • They deliberate on the importance of self-control in managing finances and investments, emphasizing the need to resist temptations and adopt disciplined money management habits.
  • There is speculation about different investment mindsets and strategies, comparing the allure of instant gratification versus long-term financial stability through controlled spending and saving.

Online Community Engagement:

  • The conversation delves into the Summersoft forum and its role as a valuable resource for property investors, particularly those seeking education and knowledge in their early stages of investing.
  • The podcasters express concern over the overwhelming growth of the forum, leading to challenges in managing content and ensuring quality contributions from participants.
  • They explain the decision to transition control to another platform, highlighting the importance of maintaining credibility by not succumbing to advertising or paid promotions.

Life Hacks and Productivity Tips:

  • One podcaster shares a life hack focused on improving productivity by turning off all notifications on smartphones, citing it as an effective method for reducing distractions.
  • They contemplate how eliminating interruptions can enhance concentration during tasks such as writing articles or creating plans, ultimately boosting overall efficiency and focus.