An Aussie landlord has revealed he is “gallivanting” around the world on his tenants’ dime – but he says it’s because of some savvy moves in the housing market.
The 38-year-old revealed he pockets $100,000 in profit every year from just a single property, attributing it to a “light bulb moment” that made him realise how to get wealthy as an investor.
It is money Steve Palise earns on top of his day job and additional money earned from three other investment properties, with the dad of one adding that he has $5m in total real estate investments.
The portfolio allows him to “focus on passion projects”, reduce his working hours to “part-time” and travel, Mr Palise said, adding that he started buying property while earning $70,000 a year.
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Mr Palise on a camel rise across the Sahara. He said he likes to “gallivant” around the world.
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“I want to live now. I like gallivanting around the world … the goal with property was to be able to spend more time doing the things I want.”
Mr Palise said his portfolio was structured differently from many other landlords in that he ditched residential properties in favour of high-performing commercial properties.
The jewel in his investment crown is a commercial property he bought in the Brisbane suburb of Regents Park.
He bought the small shopping mall for about $3m and, with eight tenants, gets $100,000 in net profit after his mortgage repayments and other expenses are paid.
“The great thing about commercial is that tenants pay all the outgoings … I’ll be able to pay off the property in seven years,” he said, noting this was largely because he used a 50 per cent deposit.
Mr Palise on a recent ice climbing trip.
This deposit was put together with funds he made from selling five residential properties he had previously owned – homes he acquired through a mix of property smarts and timing.
His residential property portfolio at its peak comprised nine homes – most of which were bought through a process of leveraging: drawing out equity in high growth properties through refinancing deals to fund the upfront costs of new purchases.
Mr Palise said he was able to do this because of the success of his first purchase and the lessons he learned.
THE FIRST INVESTMENT AND EARLY BUYS
Mr Palise, who is based in Sydney, made his first investment property purchase in 2012 while working as a mechanical engineering graduate on $70,000 a year.
“I was a poor post uni student, but I wanted to do something,” he said.
Most of Sydney was off limits to him because of the high prices so he bought what he could afford: a small house in Blacktown for $230,000. He used a 10 per cent deposit.
His first property, a home in Blacktown, jumped in value by $70,000 in a year – more than he was earning from his job at the time.
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The value jumped to $300,000 within a year. “That was my light bulb moment,” Mr Palise said. “I had matched a years’ worth of income just by owning a piece of paper.”
His success with that purchase encouraged him to dive further into property investment strategies and he consumed as many investment books, podcasts and other sources of knowledge he could.
Over later years, Mr Palise followed up his first purchase with other buys in the NSW towns of Forster, Tamsworth and Katoomba, two properties in the Logan area of Brisbane, another in Sydney’s Constitution Hill and a cheap Cairns property he paid for in cash.
He explained that banks continued to allow him to refinance his loans and take up new mortgages because the rents on these properties covered the majority of the mortgage costs.
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The investor with his family.
“I was able to buy with no money down by using equity from previous properties,” he said.
Leveraging came with risks, he admitted. “If you don’t know what you’re doing, losses get magnified … But when you’re starting out, it’s the best way to grow.”
A SHIFT IN STRATEGY
Mr Palise’s income gradually increased as he gained more career experience as an engineer but his investing hit a snag seven years ago when he went through a divorce and had to split his portfolio in two.
This encouraged him to reassess his investments. “In the last four years, I decided I didn’t want to be the guy with 100 properties. I just needed a few hundred grand a year to do what I love,” he said.
Palise at his Brisbane shopping mall.
His strategy shifted from accumulating multiple residential properties to focusing on high-value commercial assets.
And so, last year he sold five properties to finance the 3,500 sqm neighbourhood shopping centre in Regents Park, Brisbane.
THE APPEAL OF COMMERCIAL PROPERTY
Unlike residential investments, commercial properties offer long-term leases and higher cash flow — if managed correctly, Mr Palise said.
His shopping centre, which houses a Foodworks, laundromat, and cafe, is strategically located near schools with little competition in a 1.2km radius.
“The likelihood of all eight tenants leaving at once is low. Even if it’s only half occupied, I won’t have to worry.”
Property investor Steve Palise has adventured around the world.
Mr Palise added that the catch was that commercial investments required far more due diligence compared to residential properties.
His move to commercial investment was aided by a career shift from engineering to the property sector and he now works four days a week as a buyer’s agent with insider knowledge of real estate sales.
“Commercial on paper is better performing with cash flow, but getting into commercial is actually the difficult part. There is a lot more that can go wrong.”
THE DOWNSIZING MINDSET
Despite having a $5m portfolio, Mr Palise has deliberately reduced his holdings, focusing on cash flow rather than sheer asset accumulation.
“Most of the industry is obsessed with big numbers — owning $20m worth of property. But what’s the point if you’re stuck working to service debt?”
Mr Palise said he plans to buy one more commercial property and then enjoy is lifestyle.
He explained selling his residential properties and buying one big commercial asset provided him strong income growth without the stress of high maintenance and debt.
He still holds a few residential properties but plans to sell them in favour of multi-tenanted industrial property — his last planned investment.
“After one more commercial deal, I’m done,” he said. “I’m happy with where I am.”
His focus now is on enjoying life rather than constantly growing his net worth. “There’s a tipping point where more money doesn’t change your lifestyle. I’ve reached that point. I’d rather be free than chase numbers.”
For aspiring investors, his advice is clear: “Cash flow is king. And don’t just invest for wealth — invest for the life you actually want.”
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