From student to multi-million dollar property investor: How a Sydneysider built a portfolio of nine properties

When Eric Wu came to Australia from China in 2002 as an international student he “didn’t have much” after tuition fees and living costs.

Now he is 43 and, with his wife, has a portfolio of nine properties worth $4.82 million. If he sold his portfolio today, including his home, he’d walk away with more than $1.5 million after paying out his loans.

He started with $80,000, which they saved over five years. These funds became a deposit on their first home – a $387,000 three-bedroom apartment in Hornsby they bought in 2007.

“We were looking at 30 years of paying off a mortgage [and thinking] there must be a better way to do it,” he says.

When their home grew in value by 30 per cent in three years it was “the spark” that made them realise investing in real estate could be worthwhile. Today his Hornsby purchase is worth $800,000.

After reading books about property and researching strategies, Eric looked for areas near major cities, with solid infrastructure, tight supply and high rental yields.

At the time the suburb that fitted his brief was Marayong, in Sydney’s west. Using equity from his home to cover the deposit and costs, he bought an investment property in the area in 2010.

A year later he added a house in Blacktown to the portfolio, noticing it had the same growth fundamentals, including a major train station, shops and affordable prices.

Then in 2012 they upgraded to a townhouse in Marsfield and moved in – turning their Hornsby residence into an investment property for $540 a week rent.

Eric describes their strategy as predominantly “buy and hold”, with little intention of selling any of the properties in the near future.

His logic behind holding for the long-term is simple but proving effective.

“Australia has a stable political system and a good economy compared to other countries with a small population and you see loads of overseas migrants coming here for a better lifestyle,” he says.

“So the population grows, but there’s not much land that can be released [and not much] new housing supply … so what happens next? Prices go up.

“The principles [of property investing] are very simple, but there are lots of variations.”

But looking for houses and older apartments with “good bones” in markets yet to see growth meant Sydney prices were rising too fast for his strategy as the property boom raged in 2014.

“Lots of people stop at three or four properties. They get complacent or it’s fear,” Eric says.

He was determined not to be one of those people.

Instead of giving up, he looked further up the coast to Brisbane, where price growth was slow since 2008 and there were still affordable properties near the city.

Between mid-2014 and the end of 2015 he bought five Queensland properties, spanning Harlaxton, Wynnum West, Cleveland and Birkdale. Some of these have done better than others, but he says “time will tell” if they’re all successful.

Being able to buy this quickly has largely been due to the fast growth of his earliest purchases, including some cosmetic renovations prior to valuations. This has allowed the couple to pull the equity back out of the portfolio, rather than rely on saving up.

And by using Interest-only loans across the portfolio he has been able to keep the margin between repayments and rental income relatively low – as can be seen in the graphic showing the cost breakdown. 

After additional expenses, such as maintenance, his portfolio is negatively geared by a slim margin.

To manage the risk of holding so many properties, and millions of dollars in debt, he has landlord’s and building insurance across the portfolio, property managers, a financial “buffer” for any vacancies or repairs, different lenders for his loans and fixed rates where necessary.

But his goals haven’t become any less bullish, despite his risk mitigation. 

Working as a nurse, and now having started a business as a mortgage broker, by 2022 he plans to have doubled the size of the portfolio.

The ultimate goal is to provide for his family, with two young children, and to make going to work in the morning a choice and not a necessity.

“As long as you get the fundamentals right, time will heal the small mistakes,” Eric says.