IN THE 6+ YEARS I have worked as a Buyer’s Agent, I have come across several conversations whereby people were hesitant to invest in property because, unless you pay it cash, with the mortgage they would think that “the bank owns them”. Take an example of a client of mine whom he has waited for more than 5 years before he signed up with me and finally had the confidence to pull the trigger to buy a property. His hesitancy was because in his mind, the true wealth from property will only be realised when the loan is fully paid off. Until then, for 30 years, he thought he would be “owned” by the bank.

This is a very common misconception when it comes to investing in property. Property is a long term game. As the time goes by, the value of your property (as long as you buy well) will keep going up while your mortgage will either stay or go down (ie. if you decide to pay for both interest + principal).

The difference between the value of your house and the remaining mortgage is what is often called, “net worth”.

Take this as an example:

• That client of mine bought a property for $580,000 in 2023. He put down 20% deposit = $160,000 which meant his mortgage was $420,000.
• His purchase costs (stamp duty, etc) were about 5% of the property price = $29,000. Total amount of his own capital was $160,000 + $29,000 = $189,000.

Fast forward to Jan 2025, online valuation site indicated a high-confidence valuation of $759,000. With the remaining mortgage of $420,000 that meant his net worth increased by $339,000 from this property alone. But more importantly, his initial capital was only $189,000. His $189,000 has now grown into $339,000 = 79.3% increase in a span of less than 2 years, which was not too shabby. In the meantime, he also enjoys a $700+/week rental income. That’s $36,400 of gross passive income.

As the year goes by, the property will appreciate further in value and so will his net worth.

The key takeaway here is, having a mortgage might feel like “the bank owns you”. I felt like that, too long time ago. But, as I understand better about how the game is played, it is not that bad after all. The rental income can cover the running expenses which allows me to hold that property for a long term and experience capital growth which will increase my net worth.