Working towards a debt-free portfolio: ‘Find your own motivation’

Moreover, he has already paid down $2.4 million worth of debt, bringing his portfolio’s loan-to-value ratio to around 50 per cent.

At 54, Mr Newbery is now working to make his portfolio debt-free, including his principal place of residence.

In the consolidation phase of his journey, he’s looking to sell properties that have reached their peak in terms of growth and use the profit to purchase high-growth properties or assets in growing markets—letting these assets grow in value and putting them back on the market for sale.

By the time he has culminated this phase, his final portfolio will contain only properties that are “strong performers”—those that have been consistent in generating income.

Once his portfolio is unencumbered, all of the income that his remaining properties generate, except for those he will spend on taxes and operation costs, will then go straight to his pockets.

According to him: “Basically, as an investor, you build a portfolio, but the income from that portfolio is predominately going to the bank. You're benefiting from the capital gain, you're not benefiting from the income."

“As an investor, what I want to do is have a portfolio that's debt-free and live off the income from those properties and not just be paying money to the bank.

“Consolidation phase is all about getting rid of the debt on those properties, and that's exactly what I'm in the process of doing at the moment,” he added.

Motivation

Since the beginning of his journey, Mr Newbery has had the goal of holding a debt-free portfolio at the front and centre of his mind. Like many other investors, he has made it a point to set a clear goal before he started his journey. All of his investment decisions since then have been made in the hopes of getting closer to achieving his goal.

However, unlike his fellow investors, his answer to “Why are you investing?” goes deeper than merely establishing a solid source of passive income. For Mr Newbery, the success of his property investment journey is, most importantly, for the future of his two daughters.

He said: “I've got two teenage daughters and I want to give them a head start in life. I want to teach them about money and how it works, how to try and make their lives a little bit easier."

“It is a very driving thing for me, I'm a very goal-oriented person,” the investor highlighted.

Moreover, he also wants to give back to the community by contributing to organisations working to find a cure for cancer—a move inspired by his parents, who both died from cancer. For Mr Newbery, finding these personal motivations have driven him to continue investing well for over 20 years, despite the challenges that have come his way.

His advice for budding investors: Find your own motivations and think about them every day as you go on your investment journey.

“Everyone's got their own motivations. Someone else's motivations may not work as your motivation. You've got to realise and understand what your own motivations are,” according to him.

‘It’s never too late to start’

While he’s had two decades to do build an impressive portfolio, Mr Newbery is among those who believe that no one is too old to start investing in property.

Naturally, there will be unique obstacles for those who start later in life. But at the end of the day, it’s always better to have started your journey than not at all, he said.

You may not be able to build a portfolio worth millions of dollars, but you have already geared yourself up for retirement by putting your money in a growing asset.

“The later you start, the harder that becomes, but in my opinion, you will have put yourself in a much better position come retirement time than what you would be if you didn't start,” he concluded.

Tune in to Glenn Newbery’s episode on The Smart Property Investment Show to find out how he plans to go about the consolidation phase of his journey.