‘You’re crazy for putting such a large deposit down’: Property expert reveals how is making $100,000 from just one home

A landlord has revealed the insane amount he is raking in yearly from one investment property and why Aussies need to check their privilege.

A successful landlord has revealed how he is making $100,000 yearly from one investment property and explains why Aussies need to check their privilege before complaining they can’t buy.

When Steve Palise graduated from university in 2012 and earned $70,000 as an engineer, he made the strategic decision to buy a home in Sydney’s Western Suburbs.

He was 25 at the time, and he wasn’t from an affluent family that could help him get into the property market.

“I bought a rundown house in Blacktown for $230,000, and that grew in value to about $100,000 in the first year because it was the start of the boom,” he told news.com.au.

At this point, Mr Palise wasn’t a property expert, and he didn’t expect to see such growth in one property. The results stunned him.

“How the hell have I made $100,000 by signing a piece of paper?”

He bought his first property when he was earning $70,000. Picture: Supplied

This was the first place he bought, Picture: Supplied

MORE: Aussie couple in 30s turn $60k into $153m

The success from the property made him decide to focus on real estate. He started his residential buying journey and ended up with nine properties in his portfolio.

Mr Palise said he was able to quit his job because he was earning a “passive income,” and he started the buyer’s agency Palise Property.

The agency now has a team of 16, acquiring an average of 20 properties per month, and Mr Palise loves helping other people achieve their property goals.

He also doesn’t have much time for people claiming they can’t afford to buy right now because of the housing crisis.

“I don’t think there’s an affordability issue. I think people are just privileged and aren’t willing to sacrifice,” he said.

The real estate guru said he often sees the same friends complaining to him, suggesting perhaps they shouldn’t be going on overseas holidays.

“You can’t cry poor about the housing crisis if you’re going overseas,” he argued.

He loves having a passive income because it gives him freedom. Picture: Supplied

His focus is less about wealth and more about lifestyle. Picture: Supplied

MORE: Man moves into DIY tiny house to avoid paying rent

Mr Palise said young people want to buy where they rent, which explains their inability to get ahead.

For instance, his first property was a rundown house, not a fancy apartment, because that is what he could afford.

Even with all his success, he still rents in Sydney’s affluent northern beaches because he argued that renting is smarter because a standard stock house in the area is worth $6 million these days.

Mr Palise believes that if he bought where he rents, he’d likely spend at least $200,000 a year just paying off interest.

He claimed that if you want to live somewhere affluent, buying is often a “liability,” and you’re better off investing in a high-growth area and renting where you want to live.

“Instead of buying a house a few streets back from the beach. I can rent a house on the beach.” He said.

Despite the success the 38-year-old has found in residential real estate, he has come to the conclusion that he doesn’t want to become someone who owns hundreds of properties just because he can.

Mr Palise admitted that after a certain point, owning a lot of properties becomes about “ego” and “collecting toys,” and he is a lifestyle person whose main goal is to create enough income to live how he wants.

He said if you're going overseas and you're complaining you can't afford to buy that doesn't make much sense. Picture: Supplied

He bought an entire shopping centre. Picture: Supplied

MORE: Ellen DeGeneres’ $6m loss in Trump flee fail

He realised what he was chasing wasn’t wealth but rather freedom.

“I want freedom to spend time with my daughter, freedom to travel the world and freedom to work because I want to,” he explained.

With that in mind, Mr Palise decided to sell seven of his investment properties, and buy a shopping centre in Brisbane.

“I made a decision that goes against everything you’ve heard about property investing. I sold some of my investment properties to buy a shopping centre with a 50 per cent deposit,” he said.

“I know some property experts will say, ‘you’re crazy for putting such a large deposit down’.”

Mr Palise argued that he isn’t trying to create wealth for the sake of wealth; instead, he is looking to create a “low-risk, high cashflow” investment that allows him to work four days a week.

He bought the shopping centre in Regents Park Brisbane for just over $3.7 million, and it is already generating him $100,000 a year in income – and this is with high interest rates and a $1.5 million mortgage.

The property expert said he crunched numbers and decided the shopping centre was a safe bet with an opportunity for growth. It’ll be paid off in six or seven years.

Once the property is paid off, he’ll start generating $250,000 in income from just the shopping centre.

At the moment, his plan is to eventually buy another shopping centre, get to a point where both properties are producing $250,000 in income, and then stop, but he knows that might change.

“It might change if I have more kids,” he admitted.

“My plan is to sell my other residential properties and buy another shopping centre, and in five years’ time, I’m going to have a $500,000 passive income.”