Help me understand the Property Investment Strategy : r/AusFinance

Skip to main content Help me understand the Property Investment Strategy : r/AusFinance Open menu Log In Expand user menu Go to AusFinance r/AusFinance • 5mo ago HonestOpinion14 Help me understand the Property Investment Strategy I've recently been targeted by the social media algorithm with multiple ads spruiking courses or financial advisory services to aid with property investment. Each ad has been spruiking getting anywhere from 5 to 10 investment properties to retire early or have passive income of 100 - 150k annually. I'm skeptical though. Hoping you can all explain to me the theory behind this investment strategy because I have several questions: What is the end game? To hope one or more of the properties go up enough in capital growth that you can sell it to pay off the mortgage of the remaining properties, then become positive geared to earn that said passive income? Or is it to slowly pay off the properties through tenants, so that you're not of pocket yourself? But if that's the case, if you had 5 - 10 properties, would you not just be paying off interest for the rest of your life and be locked into working forever, with maybe your grand children being the ones to benefit? I work in a field with annual salary of 130 - 150k a year, with no LMI if I take out a loan from the bank. Even then, I can't fathom being able to borrow enough to finance 5+ properties, nor being able to afford mortgage repayments even with tenants. So help me out here, what am I missing? So far it just sounds like a high risk strategy that theoretically could work out if you can somehow manage to out-earn remaining mortgage repayments, interest, taxes and never lose your job for whatever reason. Read more Share Chase • Ad Zero is having a moment. Chase Slate gives you 0% intro APR for 21 months on purchases and balance transfers, $0 annual fee, Zero Liability Protection. Which all adds up to zero hassles. Learn More chase.com Collapse video player Sort by: Comments Section Cock_In_Cider • 5mo ago • Edited 5mo ago The course itself is the product that these spruikers are making money off. The information theyre providing and “selling” you would likely not be suitable for your personal circumstance yet you would have parted with your money and time/effort in figuring that its useless. The strategy works for peoples with much larger cashflows in the form of daily operational businesses which can be manipulated/leveraged in order to get a corporate structure and guarantor in place to deal with the volume of loans youd need to tie yourself up with. It also heavily relies on the assumption that “property/land only goes up” with revaluations done years down the track to reduce the LVR . You would need a much larger appetite for risk and dealing with pressure/stress when external factors change. Its not really made for simply PAYG earners like yourself. Hot-Advertising-1168 • 5mo ago It is possible, I am a PAYG earner with 5 properties built up over 12 years. Takes a lot of risk, high income and resilience. The ads you are looking at are deceptive in that its not as easy especially the passive income which is usually gross not taking into account all the fees. Fir example I earn $113,000 passive income however that is before everything is taken out. In saying all that I am semi retired at 45 because of the portfolio we built. I have done this by selling 1 house releasing the cash and cashflow to support it. Jumpy_Hold6249 • 5mo ago Congratulations. Hard work and smart investing has paid off for you but you have also had ownership during one of the largest property booms ever. Do you think this would repeatable for someone starting today and wanting to be in a similar position in 12 years? Hot-Advertising-1168 • 5mo ago Hey, I wish I could predict the future. However all I know is our parents and their parents were asking the same question. MT-Capital • 5mo ago 113k is not passive if you have to take out expenses. Direct_Week_2091 • 5mo ago • Edited 5mo ago It is passive because they’re not actively earning it through employment. Youre thinking of gross vs net passive income 2 more replies Direct_Week_2091 • 5mo ago • Edited 5mo ago On the finance side- you would be surprised by how much you can borrow for investments where you aren’t heavily negatively geared. Especially if you have dual income and ESPECIALLY if you rent. Sure, you’ll end up flying a bit close to the sun if you want to get to 5-10 but there’s always exit strategies. It also depends on the type of property you’re talking about- 5 properties worth $3m total might only have $2m debt or so The way that you can keep buying is by refinancing to drag capital gains (equity) out. You can do this by buying undervalue, timing a certain market well or manufacturing equity such as with renovation. You buy 1, take the equity out and use it as a deposit to buy another. Obviously that’s oversimplified and it’s not an endless money hack cause you’re reborrowing the money you take out as cash, but that’s how people do it. You get to a point where it provides passive income by either reducing the debt over many years, or by selling down some (consolidating) so that you outright own a small amount of property I’d be very wary of those courses, the majority are people who have no actual education themselves. Just get great professionals to work for you and you can do it eesemi77 • 5mo ago Property investing is like all betting schemes where you double down on each round of betting. In theory you cant lose, however in practice you quickly reach a point where doubling the bet becomes just plain insane. We may not be at peak house price point yet, but we are not far from it. Double Sydney houses prices again and even a 5% deposit becomes a stretch for average families. At some point the doubling just stops. Check out NZ house prices for a clue as to what could happen in Australia.

We are already seeing the high costs of rents / buy forcing wage /price inflation in the broader economy. This is something that the RBA hasn't had to deal with since 2007. If the RBA deals with this in-built inflation by increasing the cost of capital then it is game over for residential house speculation (sorry investing). If the RBA fails to quell inflation, well then Australia could begin to look like a carbon copy of Argentina. And we've got at most 10 years to stabilize the system. Against this macro backdrop, imo you'd need nads the size of basketballs to go all-in on a maximally leveraged RE portfolio. pwnitat0r • 5mo ago Biggest reason people invest in property is due to inflation . The RBA creates a nice narrative that inflation averages 2-3% a year and when it doesn’t, they will either lower/raise interest rates. Meanwhile, real inflation is actually 7-8% a year as the money supply expands rapidly with banks printing money at the stroke of a keyboard…. When the money supply increases, money flows into hard assets like property. You can save hard and invest your money in the stock market, might average 10-11% a year… before taxes. Or you can buy property with 4-9x leverage and clip 7% a year on money you don’t have… and while you’re clipping 7% a year on money you don’t have, inflation is reducing the debt in real terms and the rents of properties are going up so that in several years the rent will cover the holding costs of the property and even start paying it off one day. Anachronism59 • 5mo ago • Edited 5mo ago Define 'real inflation'. Different things inflate at different rates. Land in particular tends to inflate faster than most things as the supply is limited. pwnitat0r • 5mo ago Increase in money supply. 1 more reply u/KutoolsForExcel • Ad What if these Excel tasks took only a few clicks? extendoffice.com Learn More Known-Ad-6052 • 5mo ago Your skepticism is correct. The brutal finance reality those courses do not show you ... On a $130k to $150k PAYG income, you typically cap out at 2 to 3 investment properties before serviceability dies. APRA forces banks to assess your loans at your actual rate +3% buffer, AND only counts about 70 to 80% of rental income. So a $500k IP renting at $500 pw is not "self funding" in the bank's eyes, it is a net drag on your borrowing capacity of around $30k to $50k. To get to 5 to 10 properties you either need ... 1) very high income ($300k+), 2) trust or company structures with separate borrowing entities, 3) non bank or private lenders charging 8 to 10%, or 4) constant equity recycling that only works in a rising market. The realistic version is 1 to 3 well bought, well located properties held 15 to 20 years. Not sexy. Works. GuardOdd3787 • 3mo ago • Edited 3mo ago the part people leave out is that property investing is still a debt and cashflow game, not magic passive income. the strategy only works if the numbers survive interest rate changes, vacancies, repairs, tax, insurance, and periods where nothing grows. Geonet Properties is one option i’d compare, but i’d be more interested in how the deal is stress-tested than the sales pitch. Electronic_Chair6383 • 5mo ago • Edited 5mo ago The shortest way it can be explained is that as you pay off your property you use the equity you have paid off to borrow against to buy a new one. Then do it again when you’ve paid off the same amount of equity in house one and two, then one, two and three and so on and so forth. Then, you sell the first house (which you’ve been living in) to get both the CGT discount available to property and shares if you hold it for over a year, then a further discount available to property you live in (PPOR) only that John Howard put in place to “stimulate investment into housing”. This is why housing has grown faster than other asset classes, because you essentially get two chances to reduce the CGT you pay. It’s also what the government is considering reducing to bring house price growth back into line. TLDR: those target ads are just trying to sell you a course that teaches you the above and administers it for you for a fee. The better way of doing it is get a mortgage broker, a financial advisor and an accountant, and poke them until they do the same thing for like 10% of the cost. GLHF Go0s3 • 5mo ago No cgt on owner occ. Never has been.  Cgt started in 1985 with it already excluded.  Lucky_Spinach_2745 • 5mo ago Curious what special discount are you talking about? The CGT discount applies to all CGT assets, not just property. First home buyer stamp duty relief are offered by states so not thanks to JH. Electronic_Chair6383 • 5mo ago PPOR. Was keeping it high-level as an intro to this person who is clearly approaching this for the first time. savewithdave • 5mo ago Get a broker. Zero cost. sunnysideupslide • 5mo ago It’s actually these kind of lies… 6 more replies People also ask about section People also ask about Best property investing strategies How to start building a property portfolio Advice for rental property investing Best budgeting apps for Australians Tips for saving for a house deposit More posts you may like Related posts Is property investment truly that good in the 2026? r/AusFinance • 8mo ago Is property investment truly that good in the 2026? 31 upvotes · 153 comments AMDOfficial • Ad AMD Ryzen™ AI Halo works with the tools developers already use, helping you move from prototyping to optimization with less friction. amd.com Learn More Looking into PH real estate investment r/Philippines_Expats • 8mo ago Looking into PH real estate investment 86 comments Would you still buy an investment property in Australia right now? r/AusFinance • 4mo ago Would you still buy an investment property in Australia right now? 59 comments How are people affording investment properties? r/AusFinance • 3mo ago How are people affording investment properties? 14 upvotes · 129 comments Has anyone bought commercial property as their first investment property? r/AusFinance • 6mo ago Has anyone bought commercial property as their first investment property? 23 upvotes · 42 comments Should you really buy property as soon as you can? r/AusFinance • 7mo ago Should you really buy property as soon as you can? 94 upvotes · 144 comments AMA - Real Estate Investments in Delhi (Buy, Flip and Rent) r/delhi • 6mo ago AMA - Real Estate Investments in Delhi (Buy, Flip and Rent) 36 upvotes · 51 comments Real Estate (Buying Apartment) for Investment Purposes in Germany - The ROI seems too good to be true. 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