Property investor Sanjeev Sah claims interest rate hikes are making him more money

A real estate investor has revealed that he is making a $200,000 a year profit from the nation’s housing crisis, and it’s all thanks to rising interest rates.

Sanjeev Sah, founder of Investors Dream, owns 10 properties including an office and a house in Sydney, three in Perth and five houses in regional areas across the country.

Sah told the Daily Mail Australia it was a good time to make money as a property investor after the Reserve Bank of Australia raised interest rates for the ninth time in a row in February, raising the cash rate to 3.35 per cent. hundred.

He says investors benefit when the housing crisis forces rents up, but they can also profit from the homes they own when demand picks up after the current price slump, a boom fueled by low levels of home stocks, rather than ultra-low interest.

“I want a healthy economy, but what the RBA is doing is helping investors,” Sah said.

‘Investors, whether they have one property, 10 properties or 100 properties, have benefited because we have a crisis.

Mr. Sah started his real estate investment journey in 2015 after buying two houses in India. He now owns 10 properties in Australia, eight of which he rents out to tenants.

Prices are going up. Not that I want that, but of course I’m happy with it. I am getting richer every day, because we have a housing crisis,” he added.

‘Demand is so high and there is a supply problem, prices are going up. I mean, it’s simple supply and demand economics.

After immigrating to Australia from India, Mr. Sah began his financial investment journey in 2015 when he realized that working full-time did not leave him enough time with his wife and seven-year-old daughter.

He and his wife Illa Gupta bought their first two houses in India before settling in Australia and expanding their property portfolio with houses across the country.

He now rents eight properties that have a market value of approximately $5 million, earning a net profit of $200,000 a year despite increases in interest rates.

“Now what that means is, if my capital growth is happening at least 5 percent every year, which is very conservative for me, I’m making $250,000 every year,” Sah said.

‘Yeah [the] RBA raises interest rates further even if I lose $50,000 guess what? I’m making $250,000… [that] It’s still a net gain of $200,000 in capital growth.’

Sah said Australians should not be angry with property investors, saying they are needed to help with the housing crisis.

“People act or complain, so people have to choose where they want to sit,” Sah said.

‘I am part of this ownership game. I have some wealth created for me and my family and there is nothing wrong with that. Also, I am renting eight properties that give tenants a place to live.

‘There is nothing negative about property investors. We are not the bad guys. We are making money but we are also making room for the market.

“In fact, we need more of those investors to come to the party so they can buy properties and build houses and then rent them out to combat the supply problem.”

Sah argued that the government needs to introduce policies that encourage investors and the construction sector to buy and build more homes.

‘We have a housing crisis and the government is not doing anything. He has plans to build thousands of homes, but who is going to pay for that, the taxpayers?’ said Sah.

‘[The government] You need to come forward and give us good policies that attract investors, builders and developers to the real estate party.

‘They have to give some confidence and subsidy to the investor. What they can do is give out subsidies, give out free stamp duty and even speed up the council approval process for developers.

Mr Sah said Australians should not be angry with property investors, saying they are needed to help with the housing crisis (one of Mr Sah’s investment properties pictured)

The government should not punish investors and developers with rules and regulations and insert policies that entice them to build more houses for people to live in (Pictured owned by Mr. Sah)

‘What we need is for the government to promote support for investors and developers because they can go and start building grandma’s houses and flats. Give them some support, then they will vote, and then they will build more houses.

“Don’t punish us with rules and regulations, but create an environment with more incentives to build housing for people who are struggling to find a place to stay.”

Sah said that having passive income (income that comes from rental properties) allows him to spend time with his family and visit his elderly parents in India.

Australia needs to build an additional three million homes over the next two decades to provide the necessary infrastructure to house the ever-growing population.

Additional factors such as the Covid-19 pandemic, rising cost of living, rising immigration, collapsing construction companies, and foreign students are further putting pressure on the country’s real estate market.

As of January 2023, rental vacancies have fallen to a record low of 1 percent, according to SQM Research.

The total number of rental vacancies across Australia now stands at 31,592 residential properties, which is down from 39,568 in December.

Vacancies in the Sydney CBD, Melbourne CBD and Brisbane CBD decreased to 3.1 per cent, 2.7 per cent and 1.4 per cent in January.

Mr. Sah (pictured with his mother) said that having passive income allows him to spend time with his family and visit his elderly parents in India.

SQM Research Managing Director Louis Christopher warned that the extremely stringent conditions are likely to continue for the foreseeable future.

“We have previously warned that the months of February and March will be the most difficult for renters in the national rental market in many years,” Christopher said.

‘The ongoing rise in rents is boosting rental yields, especially with falling prices. If the cash rate rises above 4 percent, home buyers, including investors, are likely to steer clear of the housing market.

“Therefore, investment home approvals will remain in the doldrums, setting us up for another super-tight rental market in late 2024 and 2025.”