Starting from 0 Properties
One of many simple low risk strategies

 Strategy 1: HOW TO GET STARTED:

 

Avoid Negative Gearing

 

We focus on purchasing units in metro locations with price points around $300,000 and gross rental yields of 6–8%. These properties are naturally cash flow positive, meaning the rental income covers the ongoing expenses. This is very different from purchasing a $700,000–$900,000 property that may require $15,000–$20,000 per year in out-of-pocket expenses due to negative cash flow.

 

High negative cash flow properties can limit your borrowing capacity to just one property. In a downturn, or if you lose your job, you may be forced to sell at a loss. Banks prefer cash flow positive properties because they improve serviceability, allowing investors to scale into a second and third property more easily.

 

Market timing and understanding property cycles are extremely important. For example, we purchased units in Western Australia in 2020 for $80,000 that are now worth $300,000. We also purchased units in Brisbane in 2021 for  $235,000 that are now worth  $700,000. In Townsville, we purchased houses in 2022  $250,000 that are now worth $500,000. We are no longer buying in these markets because we believe they have reached their peaks, although many buyers agents are still directing clients there.

 

We are now focusing on the Melbourne unit market and selected regional areas. It is important not to buy high-rise apartments with little or no land component, as many of these have shown minimal growth over the past 20 years.

 

Instead, we focus on boutique unit blocks of 4–10 units, which typically offer a higher land-to-asset ratio and stronger long-term growth potential.

 

We can access many of these opportunities through our relationships with local real estate agents.

 

If you need help building your property portfolio, or if you are just getting started in property investing, feel free to reach out. We would be happy to help guide you through the process and identify opportunities that align with your goals.