Former teacher shares lessons learnt about building a property portfolio

One thing they don’t teach you at school is that among the nation’s property investors, 72 per cent hold just one investment property.

It’s a lesson that former teacher and high school deputy principal Phil Batey learnt and has applied to acquire three properties and set himself and his family up to increase upon that in coming months and years.

Growing up in Hornsby in the northern suburbs of Sydney in a middle class family, living the typical 1980s childhood - riding bikes, playing cricket and footy in the street until dark, sport on weekends, and holidays at the beach on the Central Coast – Mr Batey completed a Diploma of Education and became a physical education teacher.

As so often happens, his qualifications shaped more than just a career.

He accepted a job offer in Queanbeyan on the NSW/ACT border and moved there with the intention of staying for two or three years.

“Instead, I loved it down there so much that my partner and now wife Deb moved after two years and we ended up getting married, buying our first and second house, having our first two children and living there for 12 years.”

The family now live in Davistown on the NSW Central Coast.

Nervous but timely first purchase

The first property purchase in Queanbeyan in 2001 just before the couple married proved fortuitous, almost doubling in value in three years.

They paid $185,000 for a small three-bedroom cottage.

“It was perfect for our first house,” Mr Batey said.

“We had a small amount that we had received in inheritance from the passing of grandparents, so we used this for the deposit.”

Encouraged and financially rewarded from that astute purchase, the arrival of their first child led to their second property purchase.

“We needed a house that was more suitable for a family, so we purchased a newer four-bedroom house with plenty of living space for $420,000 after selling the cottage for $310,000.”

Mr Batey attributed that early taste of property market success to Deb, who ensured his own youthful aversion to financial planning was usurped by her foresight.

“I was still young and immature, and hadn’t seen the need to purchase a house at that point.

“We were in our early 20s with no clear long-term plans, so I wasn’t in a rush to buy a house - fortunately she had the sense to get us into the market at a good time, which allowed to us get the equity from the first property to buy the second, where our two youngest children were initially raised.”

The initial investment property

Buoyed by their first two property purchases delivering strong capital gains, Mr Batey had the property bug.

By the time they had moved to the Central Coast in late 2010, they had built up a healthy amount of equity in their home, which was further enhanced after the first five years of living in their current house.

“I did some research and was convinced that we needed to invest, but did not know what to do next,” Mr Batey explained.

Things came to a head in 2017.

“I didn’t have the time to take my investment goals any further due to the demands of work and family, since we were both flat out working in high schools.

“In addition to work, we had three teenage children, so any spare time was spent coaching their soccer teams, driving them to dance and swimming lessons, or spending time running the household.”

They sought assistance from a local property investment business, who provided the support and expertise to manage the process.

“They began by educating us about the intricacies of investment, giving us a better understanding of depreciation, equity and other things that we had heard about but didn’t fully understand.

“I knew the business owner and knew that I could trust him to look after me and my family, and he definitely did not disappoint; he was able to source the property, and link us with excellent mortgage brokers, solicitors, accountants and property managers.”

The equity in the family home was the catalyst for that first investment property purchase, a four-bedroom house in Pimpama on the Gold Coast bought for $545,000, which is now worth $920,000.

Breaking the investor shackles

The second investment property that eludes the vast majority of investors followed.

The couple purchased that asset five years later, a four-bedroom house in Cranley, Toowoomba, bought for $650,000 that is now valued at $750,000.

Mr Batey’s property investment strategy is one of relative simplicity, although a more recent purchase, an NDIS property, has broken that mould to some degree.

“My story is not a get-rich-quick through property tale or some unique way of doing things.

“It is more about how average working families and busy professionals can invest in property more easily than they realise with the right guidance.

“Our portfolio has been built by purchasing in areas where there is strong capital growth, low vacancy rates, good rental yield and affordability.

“I’m not into risky or speculative purchases, instead, I look for areas with strong fundamentals, namely population growth, infrastructure investment, rental demand and a mid-price range.

“I also can’t highlight enough the importance of working with trusted professionals.

“Expert mortgage brokers, accountants and property managers are essential pieces of the puzzle, and they make a massive difference to the success of an investment.”

He added that it was also important to make the most of depreciation and other claimable expenses on an investment property, as it can significantly reduce taxable income and enhance the overall return.

Navigating the NDIS investment maze

There is a significant shortage of NDIS housing, particularly Specialist Disability Accommodation (SDA). 

While the NDIS aims to provide funding for 28,000 participants to access SDA, the existing supply falls far short of meeting the demand. Estimates suggest that up to 60 per cent of people with disabilities may not have access to suitable accommodation.

Despite the shortage, there are investment opportunities in SDA development, but it requires careful consideration of participant needs and policy changes. 

Some investors in NDIS housing schemes have faced difficulties finding tenants and experiencing financial losses, highlighting the need for careful due diligence and alignment with participant needs. 

Mr Batey acknowledged that many NDIS property investments were problematic but said they gained confidence by paying particular attention to buying in an undersupplied area.

In 2024, after doing a lot of research into NDIS housing, they set up a SMSF to purchase a property in Buronga, on the NSW side of the Murray River, that caters for the High Physical Support category of Specialist Disability Accommodation.

“We saw the NDIS space as a chance to invest ethically and strategically.

“There’s a huge shortage of quality housing for people with disabilities, and if you get the right property in the right area, it can provide strong returns while also making a difference to someone’s life. 

“It’s a bit more complex than a standard investment but with the right team as well as due diligence, it can be incredibly rewarding.”

The next property hotspots

Being so enamoured with real estate’s potential to change lives, Mr Batey made the decision to change his own.

His property investment journey led him to complete a Certificate IV in Real Estate Practice and leave the education sector for a career with YPP as a property investment specialist.

In applying his professional and personal experience to some crystal ball gazing, where does Mr Batey see the property market outperforming in the year or more ahead?

“South-East Queensland continues to offer some of the strongest fundamentals for long-term capital growth, benefiting from robust population growth, significant infrastructure investment, appealing lifestyle factors and relative affordability.

“In particular, areas like the Sunshine Coast and Toowoomba are showing strong potential, but there are also many great opportunities in the outer suburbs of Brisbane, in places like the Moreton Bay, Ipswich City and Logan City LGAs.”

Regionally, he targeted a number of areas.

“Albury-Wodonga stands out due to its affordability and strategic location near Sydney, Canberra, and Melbourne, while I am also closely watching the regional Queensland market as there are many good prospects in a number of the regional cities up and down the coast.

“The Hunter Region, including Newcastle, Lake Macquarie, Maitland and the lower Hunter Valley, also remains a compelling option for me.

“This area benefits from so many factors - a broad economic base, strong employment across key industries such as mining, agriculture, tourism and manufacturing, and a high level of lifestyle appeal thanks to its beaches, wineries and recreational amenities.

“Its relative affordability compared to Sydney also continues to make it attractive to both residents and investors.”

His enthusiasm for Melbourne was more tepid.

“While some commentators are optimistic about an uplift in Melbourne, I am still not convinced.

“There are early signs of recovery in some suburbs, but it’s not yet clear whether this growth is sustainable or simply a short-term rebound, so I want to monitor the data more closely before suggesting whether this will be a good long-term option or not.”