Sydney man Lloyd Edge was struggling through the daily grind on “quite a low income” when he decided to dabble in real estate.
He eventually bought a tiny, one-bedroom apartment with a $30,000 deposit which “wasn’t easy” to save – but today, he’s managed to transform that humble beginning into a 16-property-strong portfolio worth more than $12 million.
It has not only allowed him to buy a “dream home” for his young family, but also the freedom to “retire” from his full-time job.
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“I was a teacher on quite a low income of around $50,000 a year and I didn’t see any financial stability in the future for myself,” Mr Edge told news.com.au.
“I didn’t want to live on the pension (after retirement) and security was a real concern for me.
“I thought I needed to set up a more consistent stream of income so I started to read some property books and attend a few seminars and things like that – for me, property made a lot more sense than shares because they can be quite volatile.”
The more he learnt about real estate the more passionate he became, but it was still tough to get started.
He only had around $30,000 for a deposit and had to rely on a mortgage broker to secure a loan, but eventually in 2003 he managed to snap up a 60sq m flat in Rockdale in Sydney’s south for $260,000, where he lived for the next four years.
“I was quite lucky in that I got a good property in a good location I probably wasn’t that aware of at the time – it happened to be near the water and near amenities but I didn’t really know what I was doing to begin with,” Mr Edge said.
When he decided it was time to move on, he bought another property and then another, until he had four properties that were negatively geared.
“I started to grow a negatively geared portfolio but it ended up costing me a fair bit of money each month and there was not a lot of rent coming in for mortgage repayments, and I felt there must be a better way of doing things than what I was doing at the time,” he said.
“I thought I was doing the right thing by buying properties and negatively gearing them but I wasn’t really benefiting and it just made me feel like I had no money.
“I ended up getting a bit of a plan and a goal moving forward as I realised I had to make my money work for me rather than me work for money, and I started to look for ways to manufacture equity in property rather than waiting for growth, by turning to things like duplexes and renovations.”
He said a “light bulb went off” when his first duplex generated “twice as much equity” in a year than his other properties.
He also would have been better off renting out his second property rather than living in it himself, and said he had learnt from his mistakes over time.
Today, Mr Edge has around 16 properties spread across Victoria, NSW and Queensland and he has sold some of his real estate over the years in order to secure a loan for his next purchase.
His portfolio includes a mix of property types, from apartments, townhouses, duplexes and houses and also bought a “dream home” two years ago – a three-level six bedder on Sydney’s waterfront – that he now shares with wife Renee and their young son Riley.
The 45-year-old was also able to give up teaching for good in 2014 and is now the director of buyer’s agency Aus Property Professionals and the author of new book, Positively Geared.
“At the time I retired from teaching I was earning around $100,000 a year and that was how much I was getting from rental income which was coming in passively from the portfolio, so I was able to walk away from teaching and immerse myself in property full-time,” Mr Edge said.
He said “not being tied” to a full-time job gave him greater flexibility and more time to spend with his family and concentrate on philanthropy and other projects.
The fact his family’s future is now secure is also a source of comfort, with Mr Edge’s most recent property purchase made for little Riley who he joked was “Australia’s youngest property investor”.
He said while the COVID-19 pandemic had caused a great deal of uncertainty in the real estate sector, he wasn’t concerned about his own investments as they were part of a “long term strategy”.
And he said it might also be the best time to get started for others, with lower prices meaning it was now a “buyer’s market”.