Picking the right property investment style is vital

Do you want to own a large property portfolio? Do you want passive income for retirement? Do you want a self-sustaining portfolio from day one? If you have answered yes to any of these questions, then you must pick the correct property investment style to achieve these goals. 

Scott ONeill

With only 0.068 per cent of Australians owning six or more investment properties, it’s clear that only an extremely small minority of Australians have worked out the correct path to follow. So, before you spend a large portion of your life savings, make sure you understand the options and the consequence of each different investment path before making a move.

Below are some distinct investment options that need to be considered:

High-cash flow residential property

These properties produce an income in their first year and they allow you to build a self-sustaining income.

This could include duplexes in capital cities, affordable regional properties or anything significantly under market value.

Suited for: Investors that want to build a passive income from day one.


Not suited for: Investors that only invest for tax deduction reasons or only consider investing in their local market.

Why invest in this option: Wealth will be built from building a passive income and increasing your equity. Without high cash flow, it will be very difficult to get past more than one or two investment properties.

High-growth/low-yielding residential property

They are by far the easiest type of property to find. This is traditionally why most investors start out with this type of property. They often disregard yield and only focus on capital growth prospects. You need to have a long-term view for this plan. Cash flow can be poor for quite some time and growth might not ramp up for a number of years either.

Suited for: Investors with high serviceability and a stable employment income.

Not suited for: Investors that are tight on cash flow or don’t want to have to chip money into their mortgage every month.

Why invest in this option: Long-term wealth will be built from increasing your equity. You need a high income otherwise you will be lucky to own more than two properties.

High-cash flow commercial property

These properties have the highest cash flow in Australian real estate.

Suited for: investors with high serviceability, have access to 20–30 per cent deposits and those wanting to build passive income fast.

Not suited for: Investors that are inexperienced and don't understand business at an intimate level.

Why invest in this option: It’s the fastest way to build a passive income. There can be a lot less stress involved as the tenants are on long leases and pay all the outgoings and manage maintenance. We have many investors seeking a $100,000 passive income for retirement. It will be very difficult to achieve this number without commercial properties playing a role in your investment portfolio

Developing property

This can be the fastest way of building equity but also the riskiest.

Suited for: Investors with large cash buffers and are financially established and investors must have high serviceability.

Not suited for: Investors that are inexperienced or have low risk profiles. There is also the genuine chance you can lose money through developing. Many people miss costs and taxes and therefore calculate the wrong returns when jumping into developing. Delays are common and builders can be unpredictable.

Why invest in this option: It can be the fastest way to create equity. If you have an established portfolio and looking to explore the high-risk/high-returning investments, developing could be an option for you.

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