Australian man Eddie Dilleen was just 19 when he bought his first investment property with a A$20,000* deposit he saved up working through high school at McDonald's, where he earned as little as A$500 a week.
From that first property - a $138,000 unit on the NSW Central Coast - the 25-year-old has built up a portfolio of 10 properties worth about $2 million across Brisbane, the Gold Coast and Adelaide.
Dilleen, who grew up in Mt Druitt in Western Sydney, said he started getting "really obsessed" with property by the age of 16. "I grew up with a single mother on a pension, so we never owned a home of our own, we were living in housing commission or renting," he said.
"My friends had houses, I knew in the future they would own those one day. I thought, 'I've got to do something about this.' I started saving, I did a lot of research. At the time I was on a $500-a-week income, no one would give me finance."
After being knocked back by six different banks, he realised he would have to purchase a very low entry price property with a high rental yield. His two-bedroom Central Coast unit, which has today nearly tripled in value, brought in about $200 a week at the time so "pretty much covered itself".
"You've just got to broaden your horizons and look at other areas," he said. "If you're not purchasing the property to live in yourself it doesn't matter where it is. I focus on properties close to cities - half an hour out of Brisbane, Adelaide - but obviously making sure it's got a high rental return."
Dilleen says the majority of his portfolio is positively geared, largely because he avoided the common tactic of borrowing against existing properties to buy the next one. Instead, he saved up for each deposit by working several jobs.
He believes there is a lack of savings discipline among the younger generation. "I try not to generalise everybody, [but] a lot of my friends don't really save up, they're not planning for the future," he said.
"You've got to have fun in the meantime, but you've got to be well prepared for the next 15, 20 years. You have to start thinking ahead from your early 20s."
He says he "hates" the mentality among some young people that with housing affordability so bad, it's not worth saving at all. "You can't just have a victim mentality," he said. "It is hard, but it's just the way things are."
Dilleen became "obsessed" with property at a young age. Photo / Supplied
To people struggling to get into the housing market, stories of young, highly leveraged property investors with huge portfolios and equally huge mortgage debt have can sometimes rub the wrong way.
Many dislike Australia's national obsession with property as a tool to generate wealth, and not a place to live. "I think it all comes down to perspective," Dilleen said. "You need to have landlords to own properties to be able to rent them out - the government can't provide housing for everyone."
He pointed out that Australia was not a single generalised property market. Most of the growth has occurred in Sydney and Melbourne, and nearly all of his properties were all in Adelaide or Queensland. In other words, if "people want to say you're pushing up prices", don't look at him.
Australia now has the second highest level of household debt in the world, with a debt-to-income ratio of 190 per cent, and at least 60 per cent of banks' loan books are related to housing.
Financial analyst Martin North has repeatedly warned about the precarious situation, saying that one in four mortgaged households are currently in stress. Modelling suggests if interest rates rose by just 0.5 per cent, that would jump to one in three households.
"We've got a very high household debt. We've got very high house prices. We've got households in some degree of difficulty already," he told Four Corners earlier this week.
"You only need a small consequential change, a small increase in the cost of fuel and stuff, to be able to actually really create that pain point. I cannot think of a single economy that's had a downturn with that much debt that it's not been a deep downturn."
A series of interventions by the Australian Prudential Regulation Authority this year in an attempt to cool down the housing market have forced banks to crack down on investor lending, with interest rates rising as a result.
Dilleen said so far it "hasn't affected me at all to be honest". "I was aiming for properties that were extremely high yields already," he said. "People think about 4-5 per cent is okay, I think that's pretty crap. The first property was 7.5 per cent yield when I bought it, and the rent has gone up from $200 to $300.
"One of the most recent ones I purchased was a two-bedroom unit 30 minutes from Brisbane for $158,000. That rented for $270 per week, giving me an 8 per cent yield. When interest rates are only 4-5 per cent, I've got the 3.5-4 per cent buffer."
He said his current rental yields were sitting at about 10 per cent, so even if interest rates went as high as 8 per cent, he would still be okay.
"I always always have landlord insurance in case any of my properties are ever vacant for longer periods of time to cover myself in that aspect too," he said. "Although I've never had any vacant for more than a few days."
So what do Dilleen's numbers look like?
He currently earns a salary of $65,000 a year working in sales, and his debt is about $1.3 million. His properties bring in $130,000 a year in rental, and after expenses including mortgage payments, rates, insurance and maintenance, he nets about $20,000.
Dilleen is not fazed by tightening lending environment or talks of a housing bubble. His goal is at least 50 investment properties and a passive income of at least $200,000 a year. "I definitely know finance will be hard," he said. "There are always options. [There will be] more rules they put in place, you've got to find ways around."
