‘Sucked in’: Aussie reveals big regret after buying first home

An Aussie man with 12 properties has revealed his massive debt and the big reason he regrets buying his first home.

Eight years ago, Aaron Duff and his partner bought their first home using the First Home Buyer’s Scheme, a decision he regrets.

Mr Duff, 41, bought the home for under $600,000 to take full advantage of the First Home Buyer’s incentive offered in Victoria. Under the scheme, stamp duty is abolished for first-time buyers who spend $600,000 or less.

Melbourne’s median house price is now over $1 million, but back in 2017 when the couple were buying, it was $750,000. To afford a house, they moved out of the city and into the suburbs and bought a home that needed so much work.

“We saved for years to get that and (with) what we bought I think we made a mistake because of where it was and what it was,” Mr Duff told news.com.au.

The 41-year-old said he believed they were doing the right thing at the time, but in retrospect, he regrets the decision.

“I knew buying a house was a good thing, but I got sucked into the First Home Buyer’s Grant, and it can be beneficial, but it also put a cap on what we could buy, and we bought the worst house in not a great location,” he said.

He spent over $200k fixing up their first home. Picture: Supplied

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Once they made the move, the couple quickly realised the home didn’t suit their needs but they kept trying to make the best of it and spent over $200,000 doing it.

“We renovated and overcapitalised,” he said.

“It just wasn’t for us. We’re a couple, and we don’t have kids, and we liked the inner city lifestyle and, in hindsight, it made us stuck for a while.”

Mr Duff said that it was “not right move” because of the location of the home and they over invested.

The 41-year-old and his partner originally believed they should work hard and focus on paying off their mortgage, but then the pandemic hit.

Mr Duff had more time and he started listening to a property podcast, and it dawned on him that he wanted more.

“I don’t want to work forever,” he said.

Neither he nor his partner have massive incomes, but they worked out that if they budgeted, they could buy another home in Queensland.

He now regrets buying this home. Picture: Supplied

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The couple started taking equity out of their primary residence to buy elsewhere and, once they saw that the formula worked, they decided to go all in.

Initially, they went with a buyer’s agent but eventually turned to Sam Gordon’s property advisory firm, Australian Property Scout, because they wanted a more ambitious approach and the firm really helped them achieve their goals quickly.

Within four years, Mr Duff, managed to buy 12 investment properties. He manages 13 tenants and one property has a granny flat that he also rents out.

The 41-year-old said they really “hit the ground running” amassing their property empire and they have zero regrets.

They’re now back living in the inner city and renting while they own homes in other areas and they’re “so much happier” because of it.

“It suits us a lot more,” he said.

The investor “really enjoys” being a landlord, he said takes an empathetic approach when it comes to his renters.

“I have empathy for tenants, particularly now we’re renting again and you’ve got to be mindful,” he said.

Mr Duff said he and his partner are the kind of landlords who are always happy to fix any issues with the properties and allow tenants to have pets.

“You’ve got to look after them,” he said.

Right now, Mr Duff’s property portfolio is negatively geared. When the interest rates were lower, he was generating income, but now each property costs him about $100 per week to keep going.

Mr Duff has avoided feeling the full brunt of that cost, though, because some of the investment properties are held in the couple’s self-managed superannuation fund, and therefore, their yearly superannuation contributions cover the costs.

“Interest rates are going down so it is getting better,” he said.

Mr Duff argued there's good debt. Picture: iStock

There have been tough times though, with Mr Duff saying that when rates were rising there were times when the couple has “flown pretty close to the sun”.

But, they also have a savings buffer that they can use if necessary and there’s always the option of selling.

“You’ve got to be prepared for a rainy day. We are used to it now. I’m not scared of debt; it is good debt if you can manage it,” he said.

Mr Duff said the properties have also increased in value. The property portfolio is now estimated at $7.4 million and, while he’s carrying $4.8 million in debt, if the couple decided to sell everything tomorrow, they’d be making upwards of $2 million in profit, which they’ve created within just four years.

“We’re stoked and blessed to have achieved that,” he said.

Mr Duff said he and his partner aren’t money-hungry or interested in living a lavish lifestyle; they want to amass wealth so they can help the people they love.

“It is about choice, freedom, and living life on your own terms. I want to be able to support my brother and sister and parents. If people have struggles I want to be able to help them,” he said.

They aren’t quite there yet, Mr Duff said. They’re still very much in the wealth-creating stage, but the process has been thrilling.

Mr Duff now works for Australian Property Scout where he helps other people create their own portfolios. He loves it.

Despite all the success, though, he still regrets using The First Home Buyer’s scheme.

He reckons that if he hadn’t overcapitalised on their first home and gone straight to rent investing, the couple could have “maybe 20 homes” by now.