The Finance Bible

Why 70% of Property Investors Fail After One Purchase

• Zeke Guenthroth and Oscar Don

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Most investors make it to one property — and never get further.
In this episode, Oscar Don breaks down the 5 silent killers that stop Australians from scaling their portfolios and building real wealth.

You’ll discover:

  • The emotional traps and structural mistakes that stall 70% of investors
  • Why tax strategy is your biggest untapped weapon
  • How to create a clear roadmap from 1 to 3+ properties
  • The difference between owning a property vs. building a portfolio
  • A real case study of a couple who scaled with zero income increase

Whether you’re about to buy or already own one investment, this episode will shift how you think about growth — and show you what’s really holding you back.

👉 Ready to build your roadmap? Book your free strategy session at www.assetroad.com.au

DISCLAIMER:

The information in this podcast is general in nature and does not constitute personal financial advice. It does not take into account your individual objectives, financial situation, or needs. Always consider whether the information is appropriate for you and seek advice from a qualified professional before making financial decisions.

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Speaker 1:

Welcome back to another episode of the Finance Bible Podcast. Zeke here and your co-host, oscar, but before we get into it, please note that nothing in this podcast should ever be considered personal financial advice. Of course, if that is what you are seeking, reach out. We'll get you in touch with the correct professionals. Get the job done properly, sit back, relax and enjoy the show. Let's get into it. Hey guys, welcome back to the Finance Bible Podcast.

Speaker 1:

Today you're joined with myself, oscar again, and we're going to be digging into a truth bomb that most property investors never see coming. It is the reason why most Aussies never break past a single investment property. And no, it's not your interest rates, the RBA or your own mortgage broker. It's actually the five silent killers of portfolio growth and scaling to that next property. Let's start with the facts. Over 70% of Australian investors stop at one investment property. Only about 18% ever get to two investment properties and the most staggering statistic is less than 1% ever hit five or more investment properties. Now, on the surface, owning one property sounds great, like you're in the game. You put your foot in the property door. You've done something that most people never do, but if your goal is financial freedom, one property is not enough. The ability to live off passive income, reduce your tax and create options. That's just not going to get you there alone with that one investment property. I guess the question is why do so many investors not make it past one investment property? We'll break it down today. I'm going to give you five silent killers why this actually happens and why a lot of people can't get past the one investment property.

Speaker 1:

Number one emotional decision-making. When people buy their first property, your emotions are high, generally speaking. If you buy where you live, your emotions are even higher because we all know that you don't want to buy in your own backyard because, depending where you live, there's better opportunities interstate. But maybe it's the fear of missing out, maybe it's the fear of doing the wrong thing. Most people stick to what feels safe, like buying close to where they live, as I just mentioned, or chasing a suburb because they know someone who lives there or they know someone who invested in that suburb and even though it might've been a good option five years ago, it's not the best option right now.

Speaker 1:

Property investing is not just about comfort. It's about calculated strategic plays that stack up over time, and this is where you really need to speak to professionals and actually help you steer the ship. If you let emotion steer the ship instead of yourself, you'll either overpay for a property which is not ideal, you'll buy in the wrong spot, which is also not ideal, or, worse, it will get you scared out of buying again so you'll never wanna buy another property, and that is why I hate to say that over 70% of investors stop at one property. The second reason is poor structure. I did speak about this in my last episode, about your mortgage broker and you're structuring the loans, but a structure of your lending and your finance is the backbone of any portfolio.

Speaker 1:

Most property investors walk into their first deal without the right setup. All they do is figure out their borrowing capacity, go to a broker, get a property and that's it. They think the rent's going to look after itself. They think investing in property regardless is going to give them a good return of investment itself. They think investing in property regardless is going to give them a good return of investment just because it's property. I hate to say that's not the case. Yes, there are great properties out there, but there's just like anything. There's risk and there's horrible properties out there too. You've really got to sit down and line everything up. Maybe their loan is cross-collateralized or they've drained their offset or they've put the wrong person's name on the title, but these things don't seem like a big deal when you only own one property. If you want to go again, they can become massive bottlenecks which will impact you buying more and more and more.

Speaker 1:

I guess the worst part is that most brokers don't proactively structure the deals for clients in terms of wanting them to scale down the track. They just want to get the deal done. So this is where it comes to finding a mortgage broker who aligns with your overall goals, not just for the next three to five years, but if you're in the game, if you're younger, you might be wanting to do this for the next 30 years, or if you're coming to retirement, maybe 20 years, 10, 15, 20 years. So you need to find a broker who aligns with that and looks for the. If we structure your first deal like this, we could possibly get you another property in six to 12 months time. So that is vital and that's what a lot of people don't do. And then, once you've got the property and if it's structured the wrong way, well, unfortunately it's too late, unless you want to sell the property. But that's never ideal if you have to sell it to go again, because ideally you just keep using the equity to go again, and again and again.

Speaker 1:

Third, no tax strategy. This one stings. Most people pay tens of thousands more in tax than they actually need to and then they say, look, I can't afford to buy another property. That's because they're not actually leveraging legal tools like depreciation schedules, correct ownership entities, interest deductions, and even if your property is negatively geared, they're not even leveraging the negative gearing. You've got to remember that the ATO isn't the enemy. If you understand how to use your tax to your own advantage, which everyone can, especially if you own an investment property, it can literally help you improve your cashflow, also increase your borrowing capacity, and if you increase your borrowing capacity, that means you can reinvest faster into another property. Like we've seen, investors go from being stuck in the past to scaling in 12 months time purely because they've changed their tax setup with qualified tax advisors and accountants who we work with. So that's a real important one. And again, that just goes down to surrounding yourself with the right dream team of professionals. And again, that just goes down to surrounding yourself with the right dream team of professionals.

Speaker 1:

Number four no game plan. This is the biggest one. Yet Most people buy without knowing what they're actually building Like. They haven't reverse engineered what kind of income they want in retirement or when they want to retire. They also don't know how many properties they will need to be paying that income for themselves and they're not actually mapping their cashflow, growth or even exit strategy, which it's a no brainer Like. Let's think of it this way when your favorite footy team, for example, it could be AFL, nrl or soccer, as some people like to call it before they go out and they have the whole week before the game on Saturday, they're looking at the game plan. They're projecting what needs to be done. They're looking at different structures, how we can beat this team. That's what you should be doing with your own personal finances and actually with your property investment. If that's what you're wanting to look at down the track, you need to project and actually plan ahead, because with no planning, you're not gonna hit anything that you actually. Any property will seem like a good idea and that is how people end up with two random properties in two random states and no idea how they connect. You need a roadmap that says look, here's step one, here's step two, here's how long to hold this property for, here's how your end goal and this is how you can get to the income that you desire.

Speaker 1:

Number five analysis, paralysis and external noise, especially in the media today. Like, let's be real, most people don't fall from lack of information. They fall from too much information. Between news headlines, the social media, opinions all over TikTok and Instagram, and even your family members, like the loud voices at family barbecues or dinners. Everyone has their own opinion, which is great, but very few have an actual plan. We see this all the time, like someone does nothing for two years because they're waiting for the market to crash or waiting for the interest rates to drop or waiting for the right time to invest. Meanwhile, they're borrowing power drops and they miss out on 100K in growth. Like it happens far too often. And you might say you and you might hear the best time to invest is right now or yesterday. And it actually is true the longer you're in the market, it's better for your capital growth if you've done it in the right location.

Speaker 1:

Let me give you a quick real life example of a client we recently worked with. It was a young couple from Brisbane. They bought their first investment in 2022. Then after that, they froze. The rates went up and their broker said they were maxed out. We stepped in after that. We restructured their debt with a broker of ours, ordered a fresh valuation and then found around $85,000 in usable equity for themselves. On top of that, our depreciation partners found around six grand in their first year deductions that helped ease cashflow and unlock their ability to borrow again. They then use that equity to buy a second investment in WA. That one was where they bought the second one, which was high yielding and you got strong growth forecast and also, most important thing, tax efficient. Now fast forward again. That couple is now preparing for their third property and the funny thing is they didn't even increase their income. They literally just pivoted and changed their own strategy.

Speaker 1:

I guarantee many people listening to this right now. You might have no properties, or you might have one and you might think to yourself you can't go again until two, three years or whenever you think your property is going to go up or the rates drop or whatever is happening in the world, but you might be sitting on thousands of dollars of equity that you can actually use and reinvest. So don't be afraid to call your broker. Actually speak to a team, us. We can look at helping you by putting you in contact with the right people, but that is an option that many people need to look at, because you're missing out on hundreds of thousands of dollars on growth if you're not doing anything on it.

Speaker 1:

Today's episode has been a short and sharp one, kind of just getting it to the point. But if you take one thing away from this episode, I want it to be this One property is not the goal. The goal you need to look at achieving is freedom, and freedom comes from having a plan, also understanding your numbers and being willing to take the next step with confidence. If you don't have a plan for how you go from one to three to five to six to 10 properties and get that retirement income that you're wanting, we can help. Jump on our website.

Speaker 1:

If you're wanting to chat to us, we can put you in touch with the right professionals assetroadcomau or even just reply to this podcast in the show notes or hit us up on Instagram. But yeah, one property is not the goal. You need to look at scaling if you're wanting to be serious about this because, at the end of the day, do you want to be with the 70% of Australians with only one investment property, or do you want to be the less than 1% with five? I know what I want to be, but what do you want to be? We hope you enjoyed the episode. As always, you know exactly what to do. Hit that follow button, subscribe whatever platform you listen to this podcast on. Also share it to friends, families, co-workers, whoever you think may benefit from it. But unfortunately it's the end and we'll see you next week.

People on this episode

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Oscar Don

Co-host
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Zeke Guenthroth

Co-host