How teacher built $20m property empire

A teacher turned property mogul has revealed he’s still positive about the real estate market despite rising interest rates dampening house prices.

With a passion for education, former music teacher Lloyd Edge found he was worried about his financial security when he thought about his future.

“I was young and single and didn’t feel I was able to set myself up for when I had a family, doing what I was doing, so that’s how I got into property” he said.

“I just bought a couple of property investments and initially I was just doing what you’re sort of told to do, buying a property in a good location and all that, but I didn’t really know what I was doing at first.”

He purchased his first property in Sydney’s St George area for $250,000, which he has held onto and has by now tripled in value.

Mr Edge bought the property after the 2000 Olympics, when the market was booming, providing him with a slow start to his investing journey.

“I was actually buying at the peak of the market, sort of buying at the wrong time, so I didn‘t really enjoy much growth for a few years,” he said.

“I was in a bit of debt and not really getting a lot of cash flow from the properties for the first few years.”

He then changed tack after five years in the game, looking at other markets and other strategies, including small developments and renovations to manufacture equity.

“I continued to build my property portfolio up to the point I eventually got to the stage where the rental income I was getting from it was as much as what I was earning from a whole year as a teacher,” he said.

It took him 12 years, but he eventually reached the point he had enough passive income from his homes that he was able to walk away from his full-time job as a teacher.

Mr Edge owned 12 properties when he stopped working full-time and now owns 18 in a property portfolio worth $20 million, however he’s owned many more along the way.

Despite his success, he says he never saw himself ending up where he is now.

“When I first started off, I wasn’t planning to immerse myself in property full-time but my investing was quite successful after a while and then I ended up combining my passions, which was essentially education and property,” he said.

Along with running his own portfolio, he helps Australians who want to get into the game by running Aus Property Professionals and authoring two books, ‘Positively Geared’ and ‘Buy Now’.

He says despite recent dips in property prices in Australia, there isn’t as much “doom and gloom” as people would expect.

“Things have been a lot worse in the past,” he said.

“I think people have been quite privileged over the last couple of years … they’ve enjoyed really low interest rates.”

House prices have been falling since the Reserve Bank began its campaign to bring inflation into line in May 2022, causing interest rates to rise for 10 consecutive months before the rise was halted on Tuesday.

In response, Sydney’s house prices fell by 6.03 per cent in the past year to sit at an average $994,000. Melbourne experienced a 5.79 per cent drop, with the median home value now $789,000, according to the latest PropTrack Home Price Index.

The Covid-19 property boom which saw prices skyrocket means this year’s decline in prices is not a “bubble bursting” according to Mr Edge, and in fact can be seen as a positive.

“It’s just the market coming back a bit; we’re still a long way ahead of where we were, and it does give people the opportunity to get into the market,” he said.

Sydney and Melbourne have watched prices rise by 22.8 per cent and 14.4 per cent respectively since March 2020, but the biggest booms have been in Brisbane and Adelaide, where costs have skyrocketed by 42.6 per cent and 44.7 per cent each.

For those who are looking to imitate his success, Mr Edge says buyers should be using their heads rather than their hearts and choose a property which will increase in value over time rather than something that is perfect from the start.

“I like [to buy a property] in a really good neighbourhood that’s mainly driven by people who own their own homes, so I like to buy in areas that have 70 per cent occupied and 30 per cent renters,” he said.

“It means the neighbourhood’s mostly driven by people who are house proud and that sort of neighbourhood drives the capital growth because people look after their homes better.

“So when you sell your property in the future, you should be able to sell it for a higher price.”

Mr Edge also urged people to look at school catchment zones, proximity to amenities such as hospitals and universities and purchasing away from flood zones.

He also urges people to consider “rentvesting” – where they rent in the area they want to live and purchase a property to lease out in an area they can afford.

“There’s a lot of people who want to buy their own home now, but the first property I bought wasn’t my own home,” he said.

“What I advise people to start with these days is not necessarily to buy your own home, but to be investing first, and then buying your own home later.”

He says the latest figures indicate the market is warming up again, with March bringing a slight bounce in prices in some cities, according to PropTrack’s latest report.

Sydney house prices have risen 0.27 per cent, Melbourne by 0.12 per cent, Perth by 0.24 per cent and Adelaide by 0.10 per cent.

Brisbane, Hobart and Darwin bucked the trend, with prices falling by 0.06 per cent, 0.43 per cent and 0.10 per cent respectively.

“I’m already seeing a little bit more positive sentiment in the market based on the fact that interest rates are starting to stabilise; I feel that things will start to move forward,” he said.

“Growth will probably start to come back into the markets towards the end of the year and into next year.”