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🎧 Real deals, real strategies, real results. Learn how to find, fund, and operate profitable property plays from someone who’s actually done it.
Hosted by Andrew Wright, principal of Professionals Southport and a commercial investor who rebuilt after losing a ~$15M portfolio during the GFC, this podcast gives you a straight-talking look at what it really takes to build wealth through property.
Each episode delivers practical frameworks, real deal breakdowns, and honest conversations with high-performing investors and operators across residential and commercial.
But it’s bigger than the episodes. The goal is to build a community of like-minded investors who share stories, swap insights, help each other grow and maybe even do deals together.
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📍 Connect with Andrew: hello@andrewwrightproperty.com.au
Hi, I'm Andrew Wright, principal of Professional Southport, and this is the Andrew Wright Property Podcast. I've built a multi-million dollar property portfolio delivering a seven figure annual rental income, and led my real estate team through thousands of sale and lease transactions in each episode. I share real deals and strategies that will help you find, fund and operate profitable property deals.
The aim of this show is to provide education and build a community of like-minded investors who can collaborate, share insights, and help each other in each other's journeys. You can make excuses or you can make money, but you can't do both. So come and join us.
Hello and welcome back to the Andrew Wright Property podcast. Now, today we're diving into a strategy that's practical, powerful, and something almost anyone can start with house hacking. This is about turning your home or even your business premises into an income producing asset to reduce or eliminate living costs.
I've never heard of it. I'm sure a lot of you out there haven't heard of it, so I'm really interested to find out what this is all about. Andrew, welcome back to the podcast. Oh,
thanks, Adam. Good to see you, man.
You too. You too. Now, look, Andrew, you've used this across both residential and commercial property, haven't you?
So let's start simple. What exactly is house hacking in simple terms?
Well, the most common. House hacking strategy is in a residential context when you think of the rooming accommodation legislation, and it's just simply renting out some rooms in your house. Now, I wouldn't have been able to survive the first couple of years after university if I didn't house hack myself, and I was able to do it, not with my own property, but I did it with my mom and dad's property.
So we had a large six bedroom house down the Gold Coast, and mom and dad left for three or four years to build a business. Felt sorry for us and said, well, Andrew, do what you want with the house. We just want you to pay for the rates, the water and the insurance and you know, if you can generate a bit of income, then go for it.
And my brother and I lived in two of those rooms and we rented out the other four and there was that cashflow that got us through because, um, I didn't have a job straight outta uni. And then I got in into a commission only real estate job, and I just literally wouldn't have survived. But in those days, I rented out downstairs for 150 bucks.
And there was two rooms upstairs that we got $50 each for. And that $250 a week back in 19 90, 35 years ago is probably the same as getting $800 a week now in today's dollars. And it made a massive difference.
So this is the good old fashioned, uh, you know, in, in my mind, the good old fashioned. You know, when you are young, buy a property, get your mates in to help pay for it.
It's exactly what it was. Look, it was just a good experience too. I, I basically became a property manager at that time and it was a good experience to learn how to, how to manage property. And you know what, what you do with that cash flow? Well, you either pay for the bills, that's what we did, the rates, the water, the insurance.
If there's anything left over, well, you, you, if you own the property, you can pay off a mortgage or you can put it into some, some other investments. But in all honesty, my motivation to do this podcast was mainly for. Young people starting out now who are using this 5% deposit scheme, borrowing 95% with massive repayments, interest rates going up.
In all honesty, you don't have a choice but to consider house hacking.
Yeah,
it is the best strategy a first home owner can use, not only to cover their mortgage expenses, but actually pay off their mortgage as soon as possible.
Okay, now. I've got a lot of questions that come to mind as you, you, you start to, to talk about this.
But first of all, why do most, uh, people treat their home, you know, as a liability?
Well, because it is, it just doesn't cash flow. I mean, you, you hear all the, the big property gurus saying your house is not a lot, li is not an asset. It's a liability. Whether it's a Grand Cardone or um, uh, Robert Kiyosaki, they all say the same thing and they're absolutely right.
Um, interest on your home loan, if you own it in your own name, is generally not tax deductible. Your rates are not tax deductible. Um, it's just a, a liability. So, you know, there's a lot of podcasts out there about rent vesting in Australia, buyers agents in particular talking about rent vesting. But for people who wanna buy their first home, I actually believe that house hacking is even more powerful a strategy than rent vesting.
What's rent vesting?
Well, that's where instead of going to buy your first home, you just go and rent somewhere, pay rent.
I
see where you wanna live, and go out and invest and buy a property, maybe in a cheaper location where you can afford to buy at that time. So that's that strategy. It's well documented.
We could do a whole podcast on rent vesting, but we won't because it's been covered by a million other podcasts. But house hacking a pretty big term in America, in in particular, there's a lot of podcasts. Uh, on house hacking over in America. I was doing it in 1990 with a property I didn't even own. And I've done it ever since with other residential and commercial properties that I own today.
That, that brings me to a, a little side question. Um,
can you do it with properties you, you don't own? Can you go and rent? I mean, can you, you can. Well, provided you have the owner's permission. You can do it. Now, there's, you know, as a residential real estate agent, we often get prospective tenants make application to release properties that we manage, and on the basis that, oh, can I sign a, a two year lease on this and go and Airbnb the property by myself?
Now, you can only do that if the landlord approves of it. Some landlords have no objection to doing it. So in a residential context, it's actually quite common. They call it Airbnb arbitrage,
right?
Where people will go and rent 10 houses and then they'll go and use them all for Airbnb if the local jurisdiction there allows it and they can profit quite handsomely with that arbitrage.
So
that is
a form of house
hacking Absolutely.
On steroids basically.
Yeah, absolutely. That, that is house hacking. Yeah. Wow. So look, what are, how much realistically can this sort of reduce your living costs? Well, it depends on how many rooms you wanna rent out. So in my case there, we rented out four of the six, and it more than covered all of the expenses.
It put cash in our pocket to buy some food. They covered everything, but it depends on the property. I mean, just to give you an example, um, where it might apply, Adam, I had an ex-employee of mine ring me a little while ago saying, Andrew, can you help find a, a one bedroom apartment for my son? He wants to, you know, take advantage of the incentives with the first home buyer scheme and the no stamp duty up to 700,000 at the time, a few months back.
And I said, well. What sort of property do you want? Where do you want? And she said, oh, we just want a one better. And I said, well, why would you want a one better? There's no leverage in a one better. I said, look, what you should do is borrow an extra 150,000 or an extra a hundred grand, buy a two better and house hack it.
You get the leverage of your tenant paying off half the mortgage for you. And you're gonna end up with a two bedroom apartment with the same cash flow that it's gonna cost you to pay for a one better. Why wouldn't you buy a two better? Now, the biggest question that comes to mind is,
will lenders take house hacking into account, as you know, income towards being able to service your debt?
Under this, this sort of scenario.
Yeah, look, great question. For a finance broker, I don't currently operate a finance brokerage, but I suspect the answer is no. If it's an owner occupy loan, it's a bit different. If you're buying an investment property, of course they will take that cashflow into your capacity to repay.
But for an owner o property, I suspect, and a mortgage broker might
be able
to answer that, should be asked that question, but I suspect the answer is probably no. They won't take it into consideration.
Okay. So it looks like on the surface this is, is a, a great way to get extra income to, especially as you mentioned for, you know, a young first, um, first home buyer.
But I guess one of the questions, and maybe this isn't something you, you, you can or wanna speak to, but it's sort of a lifestyle decision too, isn't it? About who you're gonna be sharing your home with?
Absolutely. I mean, I, I, um. Have a large house myself and, um, I was looking at doing the home stay thing at some stage.
My kids are half Japanese, they speak the Japanese language. We were looking to maybe get one or two Japanese students over on a home stay and it pays pretty well, but we didn't go down that track. Um, because of the time commitment, you've gotta actually drive them to their school and prepare meals for them.
So. Uh, I'm interested in a passive cash flow from house hacking, but not the home stay type of model. And personally, I'm not interested in the Airbnb model where you've got all the. The extra
cleaning,
cleaning and all that sort of management involved. But for some people, you know, it, it works quite well.
I'm glad you brought up the home stay because I do have a, a friend I know who's been doing that, um, quite some time. And the, the benefit is that it's, it's, it's usually, when I say short term, let's say it's fixed term, 3, 4, 6 months, um, and you're being paid well above. Uh, normal rental rates, but you are right.
There are obviously, um, conditions upon that, that you have to get them around, that you have to prepare meals, but, um, she said it was, it's the best thing ever that generally they, they're just so happy to. To be where they are staying where they are. They stay to themselves a lot of the time. Um, lovely people and has, has generally never had a problem and didn't feel like it was actually a housemate.
It was, it was almost literally like they were renting a room that just sort of, and stayed outta the way and came down for meals.
Yeah. And I'm sure a lot of those, um, relationships, particularly with international students, end up in lifelong friendships as well.
Absolutely. Absolutely. So what about then your advice around the, um, I was gonna say legalities, probably not that, but paperwork or, you know, you know, getting mates in on handshake deal, you know, we're, if we are looking at young people or do you put in place proper boundaries and, and paperwork?
When I was, uh, 20 years of age, I didn't, but obviously I would recommend that you do. Now these days, um, legislation has grown around the rooming accommodation business and there's a, a separate part of the residential tenancy legislation actually specifically, specifically for rooming accommodation. So yeah, you should have a rooming accommodation agreement.
You've got compliance around having the interconnecting smoke alarms in every room. You've got, um, you're supposed to provide the common area facilities. You're supposed to keep them clean. Um, in the current marketplace, you'd usually offer those type of tenants, free wifi, um, car parking, all that type of thing.
All needs to be taken into consideration. But what's more important, I think, if someone's considering house hacking, is that you probably get advice from your accountant and your lawyer because this income needs to be declared. So you, you need to declare on your tax return. Now I'm sure in in practice there's a lot of times it isn't declared, but you should, and that can also have implications on your capital gains tax exemption for your principal place of residence.
Sure.
Um, even from a land tax perspective, there is specific legislation around the amount of the floor plan of a house that you can rent out and still keep your. Principle place of residence exemptions for land tax purposes.
Okay, so a big takeaway here is obviously get advice, um, from the right professionals.
Um, when considering doing any of
this well, I, I, I, I'll tell you why I'm qualified to agree with that comment is because I didn't get advice on one particular transaction. I got accounting advice on something, but I didn't talk to my lawyer, and I ended up with a $53,000 land tax bill. In relation to something which I thought my accountant would know, but accountants are trained in federal law being the Income Tax Assessment Act or whatever they call it these days, but they're not all trained in state law around land tax.
Now, I don't want to go into that particular problem that I face, but I actually sued the uh, state. Government back. I took them to Qcat to fight that $53,000 land tax bill and I lost, even though I thought we had a pretty, pretty good case. But if I had a sought legal advice upfront with what I was doing with my residents at the time, I would, I'd be $53,000 better off, plus another five or six in legal fees.
So, um, it is important that you get tax advice and legal advice when you're going down that track.
Sure. And I wanna bring up another. Situation I've seen before, which I understand to be the wrong thing to do, or let's call it what it is probably illegal and there's probably people out there doing this, but I wanna understand what would happen.
And this is a property management question for you. Um, had they gone down the right track? So here's what, um, this person was doing. They were getting flatmates in
mm-hmm.
Being paid cash to help. So they were leasing the property. Um, just a normal rental. Um. Renting out a couple of the rooms, um, to people who weren't on the lease.
Mm-hmm. Um, dunno whether they're declaring the income, probably not. Mm-hmm. Um, and that's, and had been doing that forever and, and, and a day. What's the scenario there? If you were to do it properly, if you were wanting to get extra people in? And even you're talking about if you're a tenant? Yes. If you're a tenant.
Yes.
Yep.
And with the goal of, because the goal of this person was to cover the entire rent.
Yep.
So that effectively she was living there rent free.
Yeah.
Uh, to make a long question short,
yes.
Is that possible if you've gone and gotten the lease yourself and to do that and to cover all your costs by effectively subletting, but I know that's not what it's called.
If you were to go through the process,
okay, well, of course it's possible. Our particular property management business does not allow subleases. In place within the tendencies that we operate. What we do allow, if someone has a three bedroom or four bedroom property and they want someone else to come into the property, we make sure they fill in a rental application and they can become what we call approved occupants.
So we do let them live there and I'm sure in some cases those approved occupants, bits of money, uh, some cash money in the hands of the PE people with a lease. But we generally do not allow. Subleasing in our lease contracts, but every real estate office is different. Um, yes, you can sublease if a lease allows you, if there's a provision in a lease that allows you to sublease, then, then you can do it.
And that's exactly what happens in those Airbnb arbitrage situations where someone signs a two year lease. And there's a clause built in there that that person is allowed to advertise on Airbnb to do, uh, short term accommodation.
Sure. Okay. So to go back to that scenario, had that person just even with the rotation of people going through, gotten an approved.
Occupant.
Mm-hmm.
Um, submission through. Mm-hmm. Doesn't need to tell those per people what she's paying in rent, can charge them whatever she feels she'd like to and can get away with. Um, and that is, can be done. Forget.
Well, it, well it is done. It's not allowed under our, uh. The lease is the my,
they're
technically
not meant to be paying them.
No. They, they're allowed to be living there. But
yeah.
Under the, under the provisions of, of the paperwork, and
I'm sure it's completely commercial and common practice for people who share a tenancy to help cover the cost of the lease,
but technically not legal.
Well, it depends on the lease that you provide on, in our office, in our office, our case, we don't allow subleasing.
Okay.
But when you go and do a routine inspection. And there's 20 lots of shoes at the front door instead of four or five generally you get an idea of whether there's extra people living there. And that's where we start asking questions. Why are there so many shoes that, how come there's so many, so many people, uh, you know, with shoes at the front here in this four bedroom house, we thought there was only two people renting property.
This
is how I knew about it because my friend was the person who was living there. And knowing that, um. She knew what was going on.
Yeah.
Um, and was told to put away all her stuff in her bedroom the night before and stuff like this. So,
Adam, I, I went and did a sales appraisal in Southport maybe 10 years ago.
In one extreme case, I actually saw mattresses up in the ceiling in above those little roof tiles. There'd been a couple that have been pushed aside, and there were mattresses in the ceiling.
Wow.
30 pairs of shoes at the front of the property. Now we weren't managing that. It was someone else who came and asked me to do a sales appraisal.
Right. And that's,
well, why would they be selling it for what they're
making from
rent?
Wow. I, well, I don't know. It might have been tenants in there that were doing that. I can't remember the circumstances, but Sure. Yeah.
Okay. Any other examples? We've been through a few of of house hacking. Any other sort of, um, instances that you've seen or common examples of how people do this?
Well, I just mentioned that the main, um, house hacking. Uh, strategy, I guess, is considered in a residential context, but it is equally possible to do commercial house hacking, and I've done it my whole life as well.
Yeah, tell me about that.
Well, look, um, even when I first, um, rented a property, uh, in, uh, at 16 Ang Street, Southport for professionals Southport, um, I was trying to expand that business and, uh, what happens when you.
Have intentions to grow a business is generally you'll, you'll lease a property that's a little bit bigger than you need. So you're gonna
expecting to grow.
Yeah. So you're gonna have spare space there. So when I negotiated that first five year lease, it was a lot of money. It was $120,000 a year just in rent.
And I said to the landlord, I said, look, I can't really afford this. At the moment, I'm, I'm leasing your premises 'cause I want to grow into it and I want to expand my business. I don't wanna move every two years when I put on more stuff, will you allow me. To sublease some of this area. So even as a tenant, we talked about the, um, Airbnb arbitrage before with residential property e even as a commercial tenant.
I did that with my first lease at that property. I got approval from the owner had it built in a clause in the actual lease that I was allowed to sublease.
Yep.
And I had a migration agent in there and they rented, um, a small area. Of our office and you know, I can't remember the numbers. It might have only been a thousand dollars a month.
I charged her, but you had 12 grand a year over five years. There's 60 grand a year of less expenditure that I
had. Absolutely. Would it be fair to say that. You know, getting approval to sublease commercial properties is a lot easier to get over the line with agents than, uh, than residential.
Yeah, it is, it is quite common practice.
Yes.
Okay.
Even, even, um, a, a month ago, I went up to Harvey Bay to have a look at a, a couple more sheds I'm looking to buy, and one of the tenants in there had even subdivided one of the big, uh, sheds. He's just, um, put some sort of big curtain there and he's subleasing a whole heap of his shed to some car detailing mob.
He's a gas company. He supplies gas bottles and he's subleased a large part of his shed to a car detailing mob. And that was approved by the owner. It's all above board. And it could be an office, it could be a shed, but if you have a premises that is too big for you, um, why not generate the extra cash flow?
Well. You've opened up my eyes to a lot of, and I've had a huge amount of learning through what I've learned through this whole podcast series. So as soon as we start talking things, now my mind starts to, you know, drift off to areas that you've been doing for forever. So my next question would be, you know, for a very smart operator who knows, a, A niche marker, a niche area, have you ever seen a big commercial premises?
Rented for the purposes of subletting the entire thing to it to make more than
what they're paying in overall rent. Yes, it happens. So even there are some complicated, um, leases where, uh, tenants may actually agree to lease a whole building. And they may have an option built into it to buy the property five years down the track, for example.
So it's in their interest to sublease the area. They might, um, have a, a gross lease over the whole building, and if they can rent out the individual spaces for a higher rent than that lease of the whole building where they can profit the difference over a period of time, they can increase the value of a commercial property by increasing the rents and if they've got an option.
To purchase that property at a future date at a fixed price. If they can make the property more valuable by leasing the individual components of that building at a much higher rate per square meter, well they can profit handsomely.
Sure. Great idea. Granny flats. That's gotta be another form of house hacking, doesn't it?
Yeah. So, um, I bought my personal residence in 2005 and I have house hacked. My personal residence for the last 20 years, so I get 420 bucks a week or whatever it is, rent every year for the last 20 years. That's 20 grand a year for, that's 400 grand extra income just from house hacking. I've declared it every year on my tax return.
Yep.
I'm not hiding it, but that, that's 400 grand there.
Wow.
Just in that one house act.
Yep.
Just from my residence. You know, I faced some scrutiny from my wife in the early years. I, I don't want someone else living. Next to me. Um, you know, shouldn't we keep that for our family when they visit and they can stay in the granny flat?
I said, well, look, I'm paying the bills here. Somehow we gotta pay off this mortgage. And sometimes as the man in the house, you gotta stamp your foot down and say, look, forget about the lifestyle. When we get super rich, we'll worry about the lifestyle. For now, let's house hack. Yeah, forget about the lifestyle and this is what every first homeowner needs to do as well.
If they buy a property with 2, 3, 4 bedrooms, they're not gonna want someone else living with them. But you do what needs to be done. And if you are borrowing 95% mortgage on your house with interest rates going up, let me tell you, you've got no choice. House hacking is the best thing that you can do to get you through.
Absolutely. Absolutely. What are, are there any tax implications with Granny Flats? Um, sorry, land tax, um, implications.
I'm. Only gonna cover this very broadly because, and it's, I'm not licensed and it's not, I'm not allowed to give advice. This
is, this is general in nature.
And let me tell you, it is very, very complicated and every single state in Australia is different with regulation to, uh, land tax.
What I can say, just as a one example of where someone could get caught out, if you are getting on, um, and uh, you, let's just say your elderly kids move out of your house and you do have a granny flat. One example where you could get into trouble is if you do have a lot of land in, in, in your investment property portfolio, you could go and it'd be quite logical to say, well, why don't we just go and live in the granny flat?
And we'll go and rent out our big house. Now, there's an example where because you are renting out more than 50% of your house as a floor plan,
it's
no longer a,
it's, you're no longer gonna get the principal place of reside exemptions on your land tax. Now in Queensland, individuals can have $600,000 each, uh, of land value, which is the threshold.
So for a couple, if your land is worth less than $1.2 million, you're not gonna be affected anyway. But if you do own lots of land in your own names. And you're over that $1.2 million threshold. You could be caught out by an example like that where you go and live in your granny flat and rent out the big part of your house thinking that you'll get a whole heap more rent for it.
And then you get a nasty surprise. And as I mentioned, I'm not joke, I'm the dead set numbers. I got a $53,000 land tax bill come in the mail. I thought, oh my God. Uh, this, these are big. If you've got a, um, a, um, an expensive principal place of residence, the numbers are a lot bigger. So you need to get legal advice.
Make sure
you get that when you're doing something like that.
Alright. So look, if someone's listening and, um, thinks this is something that they're wanting to do, but they're, they're sitting on the fence, what's your final piece of advice to, to anyone who's sort of maybe weighing up well, the lifestyle, but, um, versus the, the benefits, what would you say to them?
Look, I think the two people that benefit most from this, the two types of people, one, one is the first homeowner. Um, go out and rent every room. You can develop some passive cash flow. Don't waste that money on alcohol when you get it in. Put it into your mortgage. Pay off your mortgage quicker. Um, house hacking is a far better strategy than rent vesting, in my opinion.
And if you're a self-employed. Business person paying rent on a commercial premises, go out and buy it. Consider, get advice and consider buying a commercial property for yourself, and if it's too big for your needs because you're wanting to expand, rent out some of that spare space. Look, my office now, where I've moved to, I've subdivided put a wall down the middle.
I'm getting $45,000 a year for renting the office next to where I am now because it's surplus to my knees. You plug into a calculator, $45,000 a year extra into your mortgage and see how much interest you save over 10 or 20 years.
Absolutely. Absolutely. Fantastic. Andrew. Thank you very much. It's been a very comprehensive breakdown of something I don't think a lot of people have, have really thought about.
It's practical. Practical. It's accessible, and something people can. Actually implement pretty much straight away and very easily. So look, house hacking is one of those strategies that doesn't require you to be wealthy, just strategic in how you use your property and thinking about it. If you got value from today's episode, please follow the show and share it with someone who's looking to get ahead faster.
Please do give us a comment, a like, hit that, um, subscribe button so you don't miss, um. Any episodes wanna do remind you what this, uh, podcast is all about. Andrew's not here to sell anything. Um, he's here to create a community to help with advice, to help property investors, to, uh, to get ahead, give new ideas, but he also wants.
Guest to come on who, who have other ideas to share with him. So please, if you'd like to be a guest, there is a, a link in the show notes. Um, jump in there. Um, and of course you can always reach in out to Andrew directly at hello at Andrew Wright property com au. Andrew once again. Thanks very much.
Thanks Adam, and thanks listeners, uh, please, uh, forward this podcast to some other people.
We've gotta get our subscribers up, we've gotta get some more people subscribed, so please do me a favor and pass it on. Thank you. Thanks for listening to the Andrew Wright Property podcast. This is all about building a community of like-minded investors. Who can share real life stories, experiences, and collaborate with a view to helping each other join us.
Get in touch through the link in the show notes. I look forward to you joining me on the next episode.