A migrant couple living in Western Sydney have revealed how they used granny flats, astute property targeting and savvy tax claims to amass a property empire of 30 homes worth $11m.
Ten of Bharat Patel and wife Vaishali’s properties were snapped up in the past year alone and the couple claim that more than 60 per cent of the total value of their portfolio is equity, with about $3.7m still owing on their loans.
Their gross rental income from properties spread across five states is about $390,000 and Mr Patel estimated that they net more than $100,000 in passive income once their repayments and other ownership costs are paid.
Claiming for negative gearing on certain properties at “strategic” times was an essential pillar of their investment strategy, Mr Patel said.
He noted that the tax claims made it more affordable for them to pull out equity from each property to fund the purchasing costs of new property buys – a process of refinancing known in the banking world as “leveraging”.
Bharat Patel and wife Vaishali own 30 investment properties. Picture: Tim Hunter.
“Using the equity by refinancing means you push up the interest on your existing mortgages and can claim more tax,” he said.
“If there was no negative gearing I wouldn’t use this strategy. I’d probably buy new properties where you can claim other tax … if you can’t claim anything, what’s the point of buying?”
Mr Patel added that negative gearing tax claims made their property portfolio cheaper to hold but it was value increases on their properties over time that were building their wealth, not repaying their loans.
“The more properties you have and the more time you have (them), the more money you make on the price inflation,” he said.
The couple started property investing in 2009. Mr Patel worked as an IT technician at the time while Mrs Patel was a full-time carer for their son.
One of their properties is this house in Rockhampton.
They had only been in the country a few years and had just got their permanent residency, originally moving from India to Sydney so Mr Patel could commence studies at UTS.
He described his 2009 job as “entry level” and his income was about $54,000 a year. He supplemented these wages by working a second job at a fruit market.
The couple put down a 20 per cent deposit for a $322,000 two-bedroom house in Doonside in Western Sydney. They soon added a granny flat, with Mr Patel acquiring a building licence and doing some work himself to bring down the costs.
The granny flat was tenanted as soon as it was completed, while the Patels moved into the main house.
They didn’t buy again until 2015, snapping up a plot in Schofields, where they built their dream home. Again, they added a granny flat out the back.
They also own properties in Tasmania.
By 2018, Mr Patel was promoted to a management position and Mrs Patel was working in childcare. His salary had grown to about $180,000 a year. With more income, they took a more aggressive approach.
MORE: Tom Cruise’s Sydney mansion sold for $80m
They used a combination of savings and equity gained from value increases on their older properties to buy properties in Brisbane, Ipswich, Cairns and the Gold Coast.
Another buying blitz followed in 2021 when interest rates were at record lows and the Australian property market went through an unprecedented boom. The sudden surge in home values helped them net rapid equity gains on their properties.
In 2022, Mr Patel quit his job in IT and started his own property business, which increased his income substantially and improved his borrowing capacity, he said.
The couple then used a similar strategy of refinancing deals and boosting rents with granny flats to secure 10 properties in the past year, including a property in South Australia, two homes in Tasmania, and multiple Perth homes.
Bharat Patel bought 10 properties in the last year alone, mainly relying on “leveraging” through refinance deals.
The purchase prices on some of these recent properties ranged from $65,000 to $475,000.
Mr Patel said cheaper properties like the $65,000 one were bought solely to improve his cash flow position and make it easier to secure new loans from banks.
MORE: Horror $10m TikTok mansion finally for sale
“One of the important things is having a team,” Mr Patel said. “I found someone who can help me with different strategies and banks. They find out which banks can give me loans.
“My advice to others is to start as early as possible. It’s unlikely the market will collapse. Rates may even come down this year.
“Most people have the wrong mindset. They buy too expensive, too soon. You can build in any market if you buy the right properties, in the right places and in the right order.”
Bharat Patel’s advice to investors:
– “Buy below-market and under-rebuilt-value property. Hold it until the next cycle.
– “Mix and match capital growth and cashflow properties.
– “Do not sell your assets if you don’t have to. Inflation will make you a millionaire.”
His advice for first-time buyers:
– “Rentvesting is not a bad option if you cannot afford your first home.”
– “Your first home won’t be your last home. Begin with fewer emotions and take action.”
– “Rent money is dead money. Start thinking about having an investment property if you cannot afford a home.”
English (US) · 