Melbourne dad retires early after making $250K a year from vast property portfolio

Cam McLellan makes at least $250,000 a year in passive income just from his properties. He can spend more time with his kids and never has to work again. Photo / Supplied

A Victorian dad-of-four has managed to retire at age 36 after finding a way to make $250,000 every year without doing any work.

Cam McLellan started amassing properties when he was just 20 with the aim of generating enough passive income so that he would never have to work again.

After he hit $250,000 in earnings after tax from renting out his many properties, he decided to enter early retirement.

He has managers in place running his portfolio so essentially no longer has to do anything to lead a more than comfortable lifestyle.

Now 47, the father is sharing his tips for how he went from being poverty-stricken as a teenager on a Victorian farm to a man with more than 100 pieces of real estate to his name.

McLellan's parents went bankrupt when he was 16 after a small business venture went terribly wrong.

They ended up moving into a "tin shed" on his grandparents' farm which his mum and dad insisted on calling a "barn" to "sound more affluent".

"I heard them [my parents] arguing about whether to buy milk or bread and it was a sort of light bulb moment, I didn't want my kids to go through that," he recalled, speaking to news.com.au.

The then-16-year-old "realised we were poor" and moved out of home into Melbourne.

There, McLellan completed his VCE — the state's end of school exam — while working multiple jobs to put a roof over his head.

"I was working three to four jobs, everything from forklift driving to stacking shelves in supermarkets, I just did that to survive," he said.

Discontent with his life, he wanted to learn what to do with his money to escape the endless work grind.

"My driving force for investing was I hated my alarm clock, didn't want to keep working for 50 years," he explained.

With no idea what to do, he "started talking to rich people", and one of these people ended up becoming his mentor and showed him how to buy his first property.

He built his way up, with his portfolio soaring, and dished out advice to friends and family. He ended up starting his own property company called OpenCorp.

Now with kids of his own, McLellan decided to write a book so he could pass down his tips and tricks to his children.

"As a new dad, if anything happens to me, the one thing no one can teach my kids is my investment knowledge."

This month, he launched his book My Four-Year-Old The Property Investor.

He has purchased a property for each of his four kids, with him putting it into a trust.

McLellan has some main pieces of advice for anyone starting out on the property journey.

One of those includes never getting emotionally attached to a property. If you're buying it as an investment rather than a forever home, then you should think with your head and not your heart.

You also shouldn't buy investment properties near you. Instead, diversifying your purchases is key.

This is reflected in McLellan's 100-strong property portfolio.

"I've got a high proportion of properties in Brisbane, Sydney, Melbourne, Brisbane and Perth," he said.

However, he never buys in regional places.

"There's a golden rule of investing," he explained. "Buy land in capital cities which have pressure on supply."

Buying your first property is the most important as this allows you to access equity and duplicate your portfolio.

"I'm very much a house guy. Ninety per cent of my properties are houses, 5 per cent are townhouses and 5 per cent are low-rise apartments," he added.

"I stay away from areas with 10 storeys more [in their apartment blocks]."

He also said investors shouldn't shy away from negatively geared properties if there was just a little bit of out-of-pocket costs, as this would probably all come back from tax breaks.

"What I was told, and what we are told by teachers, financial planners and accountants about making money, is wrong. Ninety-nine per cent of Australians retire poor because they follow a cookie cutter system which is not designed to create wealth," he said.