Migrant gets $7.3m from simple tax trick

A migrant IT worker, who used to sell fruit to supplement his $54k a year salary, has revealed the loophole he used to earn $7.3m in wealth.

Bharat Patel and wife Vaishali at their home – the couple have 30 investment properties. Picture: Tim Hunter.

A migrant couple has shared their remarkable journey of building a property empire worth $11 million.

Bharat Patel and his wife Vaishali, who migrated to Australia from India, claim about $7.3 million in the value of their properties is equity.

It’s a position they’ve achieved using a combination of strategic investments, savvy tax claims, and rising rents.

Their portfolio includes 30 properties purchased over the past decade – 10 of which were purchased in the last 18 months alone.

Bharat Patel uses negative gearing as a central pillar of his investment strategy.

The Patels claim that more than 60 per cent of their portfolio’s total value is equity, with approximately $3.7 million still owed on their loans.

Their properties, spread across five states, generate a gross rental income of around $390,000 annually.

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After accounting for mortgage repayments and other ownership costs, Mr. Patel estimates that they net over $100,000 in passive income.

A cornerstone of their investment strategy has been the use of negative gearing, a tax concession that has allowed them to leverage their property equity for further investments.

Mr Patel explained that this approach has enabled them to claim more tax benefits, making it feasible to refinance their properties and use the equity to fund new acquisitions.

“Using the equity by refinancing means you push up the interest on your existing mortgages and can claim more tax,” Mr Patel 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.”

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The Patels began their property journey in 2009 when Mr. Patel was an entry-level IT technician earning about $54,000 a year, supplemented by a second job at a fruit market.

The couple purchased their first property — a $322,000 two-bedroom house in Doonside, Western Sydney — with a 20 per cent deposit and added a granny flat to increase rental income.

Their investment approach evolved over the years. By 2015, they had saved enough to build their dream home in Schofields, complete with another granny flat.

One of Mr Patel’s properties in Townsville.

With Mr Patel’s salary increasing to about $180,000 annually, and Mrs Patel’s income from working in childcare, they expanded their investments aggressively, acquiring properties in Brisbane, Ipswich, Cairns, and the Gold Coast.

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The real estate boom of 2021, driven by record-low interest rates, provided a significant boost to their portfolio.

And by 2022, Mr. Patel transitioned from IT to start his own property business, which enhanced his income and borrowing capacity.

This transition enabled the couple to purchase an additional 10 properties in 2023, including homes in South Australia, Tasmania, and Perth.

Mr Patel’s high rents have put him in a good position to weather interest rate rises. Picture: Brendon Thorne

The Patels’ recent acquisitions varied widely in price, from a $65,000 property bought to improve cash flow to higher-value homes up to $475,000.

Mr Patel advised potential investors who wanted to replicate his success start early and adopt a mindset focused on strategic property selection.

Originally published as Migrant gets $7.3m from simple tax trick