A property investor who moved to Australia with just $4,500 to his name - and now owns more than 100 rentals - has given his tips on how to get into the market amid the national housing crisis.
Victor Kumar and his wife Reshmi moved to Australia from Fiji in February 1997. Mr Kumar, a qualified sonographer and radiographer, lectured at the School of Medicine while his wife was a junior hospital radiographer.
The pair lived in Victors sisters garage for three months before renting a unit and buying their first home a year later.
Mr Kumar told Daily Mail Australia they both soon realised that working in the medical industry was holding them back from their long-term financial goals.
Mr Kumar bought his first investment property in 1999 and in three short years his portfolio has expanded to 11 properties.
In 2001, Mr Kumar and his wife left their jobs in the medical industry and started their own investment company the Right Property Group.
Now, the pair boast a multi-million dollar portfolio with more than 100 properties across NSW, Queensland, South Australia and Western Australia.
Director of Right property Group migrated to Australia from Fiji and turned $4,500 into a multi-million dollar property portfolio with more than 100 properties across the country
Mr Kumar is often criticised for his extensive property portfolio, with many accusing him of contributing to Australias housing crisis.
Investors like myself are not to blame for the housing crisis, Mr Kumar said.
Im actually adding to housing supply, not taking away, because none of my properties are vacant and they are providing accommodation.
With the properties I buy, I also build granny flats, I build multiple dwellings on them. Im actually increasing the supply, as opposed to taking it away.
Mr Kumar added that he and his property managers also make a conscious effort to help people who do not have a rental history.
We were renters once as well. So we know how it works, and we know the troubles we had gone through when we were renting, he said.
If a person does not have a rental history, we give them a go so that they can actually get a rental property.
Negative gearing
Trolls have also sent Mr Kumar a barrage of messages claiming he was taking Australians taxpayer money via negative gearing.
However, Mr Kumar said those who think that do not know how negative gearing actually works.
Its no different to the ordinary punter doing their tax return and claiming their uniforms or their work tools for a tax deduction, Mr Kumar said.
I am not taking any tax from anyone else. I am claiming the losses of tax on my own properties that I have paid personally.
Mr Kumar said negative gearing is an incentive from the government to encourage people to invest so that there is more property supply in the market.
He added investors who feared negative gearing being taken away were using the wrong methodology and were investing only for tax reasons and not for wealth or cash flow.
If youre holding your properties only because of the tax deductions youre getting, and thats the only way youre able to hold on to them, then I dare suggest youve taken the wrong approach, Mr Kumar said.
The better approach is to to find and add value so that you always have a safety margin in each purchase.
Its best to make sure that there is a non-reliance on government incentives, so that if those rules change, and they can change, youre not stuck.
Mr Kumar also fears the housing crisis would get worse if negative gearing was taken away from owners of investment properties.
Mr Kumar said investors like himself were not to blame for the housing crisis, as his properties added to the supply of rentals
It was reported in September that the Albanese government wanted to revisit existing negative gearing and capital gains discount policies.
It is believed Labor has commissioned Treasury to do modelling on possible changes to housing policy.
Negative gearing was taken away during the Paul Keating era in an attempt to help renters and first home buyers get into the market.
Mr Kumar said the move backfired phenomenally and saw rentals jump by about 20 per cent.
When negative gearing was repealed the 20 per cent increase in rentals did not drop down to previous prices.
Ultimately, they impacted the very people that they were trying to help, Mr Kumar said.
Advice for young Australians
Mr Kumar said that while he was able to make the Great Australian Dream come true, it came with a lot of hard work and sacrifice.
Mr Kumar explained he and his wife made a conscious decision to defer starting a family, which went against their culture.
The pair did not take any major holidays and lived very frugally for the first few years so they could funnel their spare cash into property ownership.
Mr Kumar added they had a sizable debt from going to property investing seminars and courses but made sure to implement tips they learnt to further their goals.
However, Mr Kumar admitted it was much harder for Australias younger generation to get into the housing or investor market than when he purchased his first home.
Mr Kumar explained he bought his first home for $137,000, which if he were to buy today would cost $850,000.
With a 10 per cent deposit, I only needed $13,000 but today you would need $85,000 for the same property, So therein lies the problem, Mr Kumar said.
Im aware that there is a disparity between then and now and that is because of current inflation and where house prices are sitting.
He advised younger Aussies trying to buy their first home to purchase a property within their means that is further away from where they would prefer to live.
He added prospective first home buyers should have a strategic plan and should also think about smart renovations that increase the propertys value.
You dont want to redline your borrowing capacity, nor do you want to be eating two minute noodles just because you bought a few properties, Mr Kumar said.
It has to be within a means. So that needs to be a thought-out strategic plan, so youre not just reliant on the market moving the needle.
Youve got to move the needle yourself through some smart renovations that dont require a huge skill set and force the value up.
You need a target and when it hits that price, regardless of whats happening on the market, you offload so you can buy investment properties or your forever home.
Mr Kumar said the solution to Australias housing crisis was for the federal and state governments to cut the red tape and make building granny flats cheaper for homeowners
The solution to Australias housing crisis
Mr Kumar believes one way for the housing crisis to ease in Australia was for the federal and state governments, along with local councils, to cut red tape.
The government right from federal down to local councils need to take the red tape away and give the power to the ordinary mum and dad homeowners, Mr Kumar said.
Get rid of the red tape with compliant developments and allow granny flats so that homeowners can add to the supply.
He explained removing council contributions for building a granny flat would make construction cheaper, lower the overall debt and in turn decrease the rental asking price.
He also suggested the government give a rebate or incentive to investors who charge 10 to 20 per cent less rent than the relevant areas average for the first three years.
Its one of the thought bubbles I have... it could open up supply and get people who are struggling to meet rental requirements in the door, Mr Kumar said.
All of a sudden youve helped the investor because they have two rental income streams and youve also helped the renter as well.
Mr Kumar said the only real way to permanently fix the housing crisis was to take a step backwards and implement structural change backed by all political parties.
For structural change to happen, there has to be a step backwards and thats never a popular decision, its more like political suicide, Mr Kumar said.
But if all parties got together and said, "Hey, lets band together, lets fix this problem," the problem is fixable.