OD #13 - Why Most Property Buyers Fail (And How to Avoid Their Mistakes)

The difference between property investment success and failure isn't luck, it's strategy. While most buyers rush headfirst into contracts and overlook critical details, savvy investors follow a clear roadmap that protects their interests at every turn.

Your journey to successful property investment begins with getting your finances in order months before making an offer. Working with a mortgage broker 3-4 months ahead gives you time to address credit issues, close unnecessary cards, and clean up your spending habits. With pre-approval in hand, you signal to sellers that you're a serious buyer who can follow through. This preparation stage alone puts you ahead of most buyers who shop before understanding what they can actually afford.

The structure of your offer matters just as much as the price. Two non-negotiable clauses—building and pest inspection, and finance—create essential safety nets. The first protects you from buying a termite-infested money pit (as one unfortunate investor discovered too late, costing them $20,000 in repairs). The second ensures you're not locked into a contract if your lender doesn't deliver. Behind every successful property transaction stands a quality legal team reviewing contracts with a fine-tooth comb. This is absolutely not where you want to cut corners—professional conveyancers catch the hidden issues that could cost you thousands down the track.

From organising building insurance to coordinating with property managers before settlement, the final stages require careful orchestration to minimise vacancy periods and protect your investment. The ultimate finishing touch? A depreciation schedule from a quantity surveyor—your ticket to thousands in tax savings that many investors completely overlook.

Property investment doesn't have to be a gamble. With the right process and professionals in your corner, you can avoid the pitfalls that trap most buyers and set yourself up for long-term success. Are you ready to invest the smart way?

Chapters

• 0:00 Why Most Property Buyers Fail
• 1:51 Finance First: Know Your Numbers
• 4:09 Making An Offer That Protects You
• 7:11 Building & Pest: Deal Maker or Breaker
• 10:19 Preparing For Settlement
• 13:07 Tax Advantages: The Final Touch
• 14:28 The Smart Investor's Approach

Transcript

SPEAKER_00: 0:00

Most property buyers fail. And the scary part is most of them don't even realize it until it's too late. They get emotionally attached to a property, they rush into contracts, they overlook the fine print and end up with a deal that costs them more than it makes them. Buying property isn't just about picking the right house or unit. It's about having a process, a team, and the discipline to do things properly. The good news failure is avoidable. If you know the right steps to take and surround yourself with the right professionals, you can buy with confidence and set yourself up for a success. In today's episode, I'll take you through the exact roadmap that smart investors use, the steps that separate the amateurs from the pros. 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 as personal financial advice. Of course, if that is what you are seeking, reach out, we'll get you in touch with the correct professionals and get the job done properly. Sit back, relax, and enjoy the show. Let's get into it. Welcome back to another episode of the Finance Bible podcast. As you just heard, today we're talking about why most buyers fail and how to actually avoid their mistakes. So this is a bit of a short and sharp episode about what steps to take once you've realized you want to actually purchase an investment property and realistically how you can set yourself up to put yourself in the best position to achieve success with property investing. So step one is finance first. It's as simple as that. Before you even think about making an offer on a property, you need to know exactly what you can borrow. Too many people go shopping for property before they've actually sorted out their finances, which is literally like walking into a store without knowing if your credit card is going to be approved at the checkout. You need to have all your ducks in a row. So how you can do this is speak to a mortgage broker, figure out what needs to be done to get you to your overall goal. So I would suggest at least three to four months before you actually look into purchase because that's kind of a sweet spot in terms of timeline of getting your credit and check. You might have a credit card which you need to close. That might take you a month to close or two months. So you can get that kind of moving. You might have afterpaid debt you need to pay off. You might have to clean up your transactions. You might be doing a bit of online gambling or you know, the occasional gambling or just spending a bit of money out. So three months gives you a bit of time to actually collect your finances and make them look attractive. And your mortgage broker will confirm this, but most lenders look around two to three months anyway to make sure that everything's up to scratch. So you need to speak with your mortgage broker. They will help you understand your borrowing capacity. And ideally, they'll assist you with getting a pre-approval in place, which isn't vital, but it helps. And when you're putting an offer in and you're pre-approved, the actual selling agent and the vendor, it looks a lot more attractive to them when they're looking at all the different offers. So if you did have a pre-approval, you would be taken more seriously because how it works, it reduces the risk of the deal falling over. I've seen people put in offers before that were really excited, and then all of a sudden they have the finance and the deal fall over because their bank didn't come through. And in some cases, they even risked losing their deposit. So that's not ideal. Don't let that be you. First step, always finance. You can't purchase a property without finance unless you've got a whole lot of cash and you're paying it outright. But most of us need to get finance from a bank. So don't even think about looking at properties before you've got an idea of what you can actually purchase. Once you know what you can borrow, the next question is simple. How do you actually make an offer that stacks up? And that's where most buyers slip up. Once you know your numbers, the next step is making an offer that protects you. A lot of investors think it's just about offering the right price and sometimes the highest price, but that's only half the battle. The structure of your actual offer matters just as much as the actual offer itself. Two most important clauses, which we speak to all our clients about, including in their offers, is the building and pest inspection clause and the finance clause. So, firstly, with the finance clause, this gives you an exit if your lender doesn't deliver. So, generally speaking, you might do subject to finance 21 days, and then you have 21 days to get your finance in order for the purchase. On the other hand, you might have the building and pest clause. This ensures that you're not locked into buying the property with any major issues. So let's say you do a building and pest inspection and they come back with all these major issues. You've got, you know, heaps of pests and termites damaging the property. You've got major structural damages on the property, you can pull out of that house without giving yourself a headache of all the maintenance and all the repairs that you would have had to do if you didn't have that clause in and you're locked in the property. Without those two clauses, you are literally taking unnecessary risks. At the same time, your office still needs to look attractive to the seller. So that's kind of where balancing it, the balancing act of having the finance approved, but also having the building pest clause there. And if you don't have the building pest clause there, that's a risk you don't want to take. But of course, a contract is only as good as the people reviewing it. And this is where most buyers try to cut corners, and that is with their legal team. With our clients, it is a necessity to have a good legal team in the corner to review everything. So a good conveyancer is the backbone of your purchase, literally. They're the ones making sure the contract of sale is actual watertight, that the clauses you've asked for are actually in the contract itself, and nothing sneaky is hidden in the actual contract. So there people can miss things. So you might request to a real estate agent to have various amounts of things in the contract or different clauses, and sometimes they forget one or two or all of them. And if you're just skimming through that yourself, you might miss a really important clause. For example, the building pest inspection, and you might think you've got that clause under your belt, but as soon as you sign the contract and you didn't really read it fully, you could be screwed. So having a team that reviews the whole contract from start to finish and makes sure that everything lines up really puts you in the right place. Like I can tell you many horror stories, which we've heard from other buyers in the past who have used themselves but also the cheapest legal options they could find. And it doesn't really help them. So spending a little bit more to have a sharp legal team on your side can literally save you tens of thousands of dollars down the track. If there's one place you don't want to go bargain hunting, it probably is with the legal and conveyancing team, because that is the difference between purchasing a property on a really dodgy block of land in a dodgy area with a dodgy contract, or actually purchasing a property in a really good spot with really good clauses and everything is lined up correctly. And once the legal work is actually covered, the spotlight then shifts to the property itself. And this is where the building and pest inspection can make or break the deal, which is you know, step four. We've already skipped, or we've gone through step one, two, and three. And step four is the building and pest inspection. So once your offer is accepted, it's time to bring in the building and pest inspector. So teams like Asset Road, we have our preferred building and pest inspectors across the country. People we've used many times before, they do a good job, they get the job done properly, which is the most important thing. And this is where you speak to these professionals, get them to go into the property for you. You don't go into the property because you're not a building and pest inspector professional. You pay for a professional to go in for you. This is where you find out if the property you're buying is a solid investment or is it a ticking time bomb that's going to cost you thousands of dollars just in general maintenance to get it up to living conditions for a tenant. A professional inspector, they will check the structural integrity of the property, any water damage, moisture, electrical issues, etc., and the main one as well, the pests. So the termites and any other pests. We've seen many times before, you know, both sides of this play out. One buyer we spoke to a few years ago, before they met us, they skipped the inspection fully of one of their previous properties to save money. And then six months later, they discovered really intense termite damage and had to fork out, you know,$10,000,$20,000 in repairs. Compare that to another client who got a thorough inspection, they discovered a bit of issues in the roof and you know, a couple minor defects, not major, just very, very minor, which wouldn't cost much. But with the right legal team on their side as well, they use that building and pest inspection to negotiate around 15 grand off the purchase price. So it's the same step, two completely different outcomes. And it just shows you that skipping the building and pest inspection is never worth it. It is the most important thing ever, especially with older properties. When you're purchasing properties in you know$500,000,$600,000,$700,000 price point at the moment, generally they are older properties. So most likely than not, you are definitely needing a building pest inspection. Assuming everything checks out and you are happy to proceed, now it's all about preparing for the settlement because that was the last tick of your actual clauses. And this is where the professionals who you've been working from the start really come into it all. So as settlement approaches, the details matter. So step five is preparing for settlement. First, a team you're working with, or if you're doing it by yourself, you need to organize your building insurance. Lenders often require it and it protects you from day one. So it's in your best interest. You need it. It's like your health insurance, but it's for your new property. You need your building insurance. Second, if you're buying an investment property, it's really important, pending if it's a vacant home or if it's already tenanted, to get the advertising underway before settlement if possible. That way you can line up a tenant to move in quickly and it minimizes the vacancy period of and the crossover. Because there's there's many times where your property settles, and then you might take it two to three weeks to get the actual marketing team and the property management team in there to take photos and actually list the property, and then another three to four weeks to get the tenant in there, then all of a sudden you're coming up to two months without any tenants. So we need to make sure that the crossover from settlement to the actual tenancy is as short as possible so that you're not left high and dry without a tenant and cash flow issues. So every day your property sits empty is money out of your own pocket. So the pros always think ahead, and that's why you need to think ahead because you are a pro. Settlement is also where your team really shines. If you do have the team in your corner, your conveyancer ensures the contract is executed properly. They will make sure that settlement goes through with their online PEXA. Your mortgage broker, they'll finalize the finances and let you know what's happening in that aspect of things. And your property manager, who's now your most important person, they will hopefully line up tenants for you. And by now you should have your insurance sorted as well. So when everyone's on the same page, settlement runs smoothly. When they're not, it can turn into a nightmare if they're not all across it. So when you are looking, if you are looking to get involved with like a team for this, generally speaking, if you speak to a you know, our team, Asset Road, we have our preferred conveyances, accountants, mortgage brokers, solicitors, the building pest inspectors, property managers, the list goes on. So our whole team, we all know what's going on. So we work really smoothly. But if you're doing it yourself, you you need to kind of align everyone together, which can be a little bit difficult. But as I mentioned, when everyone's on the same page, it's a smooth process. And finally, once the dust has settled and the property is finally yours, there's one last step that separates the savvy investors from the rest. And this is what I call the icing on the cake. So the tax advantages. This is why a lot of Australians invest in property. It's a depreciation schedule. So this is prepared by a quantity surveyor, and they outline exactly how much you can claim in deductions on the building and its fittings. So simply, it's a legal way to put money back into your own pocket at tax time. With a brand new property, you can claim up to 40 years worth of depreciation on that property. If it's 20 years old, it's 20 years on that property and so on. But a good depreciation schedule can save you thousands of dollars each year, and it's often the difference between an average return and a great return. So too many investors miss out on this because they simply don't know it exists. But yeah, think of it as icing on the cake, the final touch that makes your investment even sweeter. And the right team will organise this for you. So all you gotta do is sit back, relax, and you know, watch the team after you're given the AOK and you put the offer in, you know, watch them get it all sorted for you. So, as I mentioned at the start, most buyers fail because they treat property like a transaction and not a whole process from start to finish. They get emotional, which is the number one mistake in property investment. They rush things and they forget that it takes you know a whole team to get it right. The difference between failure and success is simple: a clear process and the right people in your corner. So before you jump into your first deal or your next deal, make sure you slow down, you stop, and ask yourself: do you want to gamble like most buyers, or do you want to actually play it smart, avoid their mistakes, and buy property the right way? The choice is yours. We have the right team for you. If you don't want to do it yourself, more than happy to have a chat. This is what separates you between smart investors and not so smart investors. So I hope this has helped you, and I'll see you all next time. We hope you enjoyed the episode. As always, we know exactly what to do. Hit that follow button, subscribe, whatever platform you listen to this podcast on. Also, share it to your friends, family, co workers, whoever you think may benefit from. Uh Fort 2014.