PK Gupta has amassed 12 properties worth a combined $8.5million before he turned 32 – and has offered advice for all Australians looking to get into the housing market
A young investor who bought 12 properties around Australia worth $8.5million before he was 32 has shared his secrets for identifying promising areas and tips for securing your first home.
PK Gupta was working as an investment banker for JP Morgan when he was 21, but Sydney’s out of control real estate market meant he was never going to be able to invest in the areas he wanted.
The data-driven entrepreneur decided to build a system that analyzed the country’s 15,000 suburbs, giving him an insight into the areas with the most potential for sustained financial growth.
‘I didn’t care where I invested, I treated Australia as one big universe of opportunity,’ Mr Gupta told Daily Mail Australia.
Mr Gupta recently bought this $3million home in the Gold Coast where he and his family will be living – it’s value has already increased to $3.5million
The investor said he used simple data that anyone can find to narrow down every postcode in Australia to a select group of 50, before then identifying the ten suburbs with the best positive cash flow.
He used that analysis to buy his first home when he was 21, a property in East Gosford on New South Wales’ Central Coast for $320,000.
‘It came down to affordability. East Gosford made sense. The rent was $400. It was giving me positive cash flow,’ Mr Gupta said.
‘My data said it was a good investment. The Central Coast is becoming Greater Sydney.’
His system then saw him invest in the small town of Kingston, an area just outside Hobart, and Frankston, which he described as a previously ‘derelict’ suburb of Melbourne.
Mr Gupta bought the detached apartment in Newcastle for $507,000, and the area’s significant growth has seen its value nearly double to $950,000
Despite his success, which now sees him with 12 properties around the country valued at over $8million, Mr Gupta said he never planned to build
‘I wasn’t interested in property at all, I just saw it as a vehicle to get ahead,’ Mr Gupta said.
‘When something helps like that, you grow to love it. I’m super passionate about it now, every day I love seeing what different markets are doing.’
The entrepreneur encouraged people to kick the common perceptions about real estate and insisted all the information is out there and extremely easy to access.
‘Traditional property investment is things like buy near the CBD and near train lines. I didn’t really buy that,’ Mr Gupta told Daily Mail Australia.
One of his two properties in Brisbane, which was purchased for $350,000 and is now worth $650,000
Key Factors For Identifying Opportunities
Key factors for investing
- Ensure key data lines up – days on market, stock on market, online search trends and building approvals
- How much developable land is in the area
- How much the area has already grown financially
- incoming infrastructure
Mr Gupta offered four key factors that he looks for when investing in a new area – encouraging prospective buyers not to be blinded by the prices of Sydney and Melbourne’s markets.
‘First of all, see if the key data is lining up. Days on market percentage, stock on market percentage, online search interest trends and building approval percentages,’ the investor said.
‘Second, how much developable land is around there. If you see paddocks of greenness, you know it’s probably going to be developed out. More houses mean less price growth.
‘Third, how much it’s grown already. You can have the best suburb with the best data, but if it’s already gone up 60 per cent in the last five years, that’s pretty risky. Those areas include Sydney, Melbourne and particularly Brisbane.
‘Fourth, the incoming infrastructure. If there’s already a train line, it doesn’t matter, it’s what they’ve got planned. Just because you’re close to a train station does that mean my house will get capital growth in the next 10 years? Of course not. Just because I’m 10kilometres from the CBD that doesn’t mean my suburb won’t plateau or go down. I never bought into those ideas.’
Mr Gupta bought this home in Cairns for $400,000 and it’s now worth $600,000
Factors for buying your first home
- Become educated and absorb information
- Invest borderless
- Use property managers to inspect and manage homes
First Home Buyers
Mr Gupta said there are two rules prospective first home buyers should be looking for when entering the market.
He particularly encouraged common perceptions and looking beyond the attractive metropolitan markets that have little or no room to grow.
‘Invest borderless. Most people live in Melbourne and Sydney. Well if you invest there, it’s going to be heavily negatively geared. Be borderless, there are 15,000 suburbs, there are places in Australia that haven’t performed that well yet.
‘And secondly, understand the power of property managers. There are reasons people don’t buy outside where they live. Can’t see the property, can’t visit the property, if tenants trash the place they can’t deal with it. Property managers do inspections for free and allow you to manage the property without seeing it. They’re key.’
Mr Gupta bought this house in Burnie, Tasmania for just $230,000 – it’s now worth more than double that price at $550,000
- NSW Central Coast
Upcoming Areas To Invest
Mr Gupta also offered a number of areas he is honing in on as his next targets and encouraged all Australians to consider outside the box approaches to the housing market.
‘Regional Queensland is the biggest one. There are so many houses under $500,000 that are positive cash flow,’ he said.
‘Toowoomba is a great one, it has a diversified economy.
‘Bundaberg is another, people think it’s just a mining town but it’s got an incredibly diversified economy with $500million in upcoming infrastructure. Townsville too.
‘Perth as well. There are parts of Perth that have risen 40 or 50 per cent.
‘There are some places that are cheaper now than they were in 2014.’
Mr Gupta says hopeful buyers should look beyond Sydney and Melbourne and invest in areas like regional Queensland and Perth
Advice For All Buyers
Mr Gupta said he wants to ‘inspire’ Australians to enter the market and calm fears of a potential market crash.
He said the common misconceptions about how and where to buy should be a thing of the past and encouraged people to think bigger picture when looking at purchasing property.
‘Everyone is afraid of inflation and interest rates. Everyone thinks we’re going to have a housing crash, but there are countless markets in Australia that even if interest rates rise 3-5 per cent, houses would still be affordable,’ he said.
‘Australia exists more than Sydney and Melbourne. The math stacks up so well. You’re spending a million dollars on an apartment in Sydney’s eastern suburbs and spending 30 years of your life to pay it off.
‘Option B is be atypical and use the same money to buy three houses, free-standing detached houses in regional QLD or NSW or Perth and in 15 years time, your money has doubled.
‘You can sell one or two, still get the place in the eastern suburbs and have another place to grow wealth. It just makes financial sense.’