I moved to Australia with my wife and $4,500. We now own more than 100 properties worth millions. This is how we did it

A property investor who moved to Australia with just $4,500 to his name – and now owns more than 100 rental properties – 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, taught at the School of Medicine while his wife was a junior radiographer in a hospital.

The couple lived in Victor’s sister’s garage for three months before renting an apartment and buying their first home a year later.

Mr Kumar told Daily Mail Australia they both quickly realized that working in the medical industry was holding them back from achieving their long-term financial goals.

Mr Kumar purchased his first investment property in 1999 and in three short years his portfolio has grown to 11 properties.

In 2001, Mr. Kumar and his wife left their jobs in the medical industry and started their own investment company, Right Property Group.

Now the couple has a multi-million dollar portfolio of more than 100 properties in NSW, Queensland, South Australia and Western Australia.

Mr Kumar is often criticized for his extensive property portfolio, with many accusing him of contributing to Australia’s housing crisis.

“Investors like me are not responsible for the housing crisis,” Kumar said.

‘I am actually expanding the housing supply and not taking it away, because none of my properties are empty and they provide housing.

‘With the properties I buy, I also build granny flats, I build several homes on them. I actually increase the supply, instead of taking it away.’

Mr. Kumar added that he and his property managers also make a conscious effort to help people who have no rental history.

‘We were once tenants too. So we know how it works and we know the problems we went through when we rented,” he said.

‘If someone has no rental history, we actually try to help them find a rental home.’

Negative acceleration

Trolls have also sent Mr Kumar a barrage of messages claiming he was taking Australian taxpayers’ money through negative gearing.

However, Mr Kumar said those who think so do not know how negative gearing actually works.

“It is no different from the ordinary gambler who files his tax returns and claims his uniforms or implements for tax deductions,” Mr Kumar said.

‘I don’t take taxes from anyone else. I claim the loss of tax on my own property that I personally paid for.”

Mr Kumar said negative gearing is an incentive by the government to encourage people to invest so that more real estate supply comes into the market.

He added that investors who feared negative gearing would be removed were using the wrong methodology and only investing for “tax reasons” and not for “wealth or cash flow.”

“If you’re keeping your properties just because of the tax deductions you get, and that’s the only way you can keep them, then I dare say you’ve taken the wrong approach,” Mr Kumar said. .

“The better approach is to find and add value so that you always have a margin of safety with every purchase.

“It’s best to make sure there’s no reliance on government stimulus so you don’t get stuck if those rules change, and they may.”

Mr Kumar also fears that the housing crisis would worsen if the negative debt burden of investment property owners were removed.

In September it was reported that the Albanian government wanted to review existing policies on negative gearing and capital gains discounts.

It is believed that Labor has tasked the Treasury with modeling possible changes to housing policy.

Negative gearing was removed during the Paul Keating era in an attempt to help renters and first home buyers enter the market.

Mr Kumar said the move “backfired phenomenally” and saw rents rise by around 20 per cent.

When negative gearing was abolished, the 20 percent increase in rental prices did not decrease compared to previous prices.

“They ultimately affected the very people they were trying to help,” Kumar said.

Advice for young Australians

Mr Kumar said while he managed to achieve the Great Australian Dream, it came with a lot of hard work and sacrifice.

Mr. Kumar explained that he and his wife had made a conscious decision to delay starting a family, which was against their culture.

The couple didn’t take any big vacations and lived “very frugally” for the first few years so they could spend their extra money on property.

Mr Kumar added that they incurred significant debt from attending seminars and courses on real estate investing, but made sure they implemented the tips they learned to achieve their goals.

However, Mr Kumar admitted it was much harder for Australia’s younger generation to enter the housing or investment market than when he bought his first home.

Mr Kumar explained that he bought his first house for $137,000, which if he bought it today would cost $850,000.

“With a 10 percent down payment I only needed $13,000, but today you would need $85,000 for the same property. So that is where the problem lies,” Mr Kumar said.

‘I am aware that there is a difference between then and now, and that is because of current inflation and current house prices.’

He advised younger Aussies trying to buy their first home to buy “within their means” a home further away from where they would prefer to live.

He added that potential first-home buyers should have a strategic plan and also think about smart renovations that will increase the value of the property.

“You don’t want to increase your borrowing capacity, nor do you want to eat two-minute noodles just because you bought a few properties,” Mr Kumar said.

‘It must remain within the possibilities. This must therefore be a well-thought-out strategic plan, so that you are not solely dependent on the market taking the lead.

‘You have to move the needle yourself through some smart renovations that don’t require enormous skills and force the value up.

“You need a goal and when that price is reached, no matter what happens in the market, you’re going to overload so you can buy investment properties or your forever home.”

The solution to Australia’s housing crisis

Mr Kumar believes one way to ease Australia’s housing crisis was for the federal and state governments, along with local councils, to cut red tape.

“The government, from federal to municipal councils, must cut red tape and give power to ordinary homeowners,” Kumar said.

‘Get rid of red tape with compliant developments and allow granny flats so homeowners can increase supply.’

He explained that removing council contributions for building a granny flat would make construction cheaper, reduce overall debt and in turn reduce the asking price for rent.

He also suggested that the government provide a rebate or incentive to investors who charge 10 to 20 percent less rent than the area average for the first three years.

“It’s one of the thought bubbles I have… it could increase supply and bring in people who are struggling to meet rental requirements,” Mr Kumar said.

‘Suddenly you have helped the investor, because he has two income streams from rental, and you have also helped the tenant.’

Mr Kumar said the only real way to permanently solve the housing crisis is to take a step back and implement structural changes, supported by all political parties.

“For structural change to happen, there has to be a step back and that is never a popular decision, it is more like political suicide,” Kumar said.

But if all parties came together and said, “Hey, let’s work together, let’s solve this problem,” then the problem is solvable.”