Continuing from the previous episode's foundations discussion, Damien runs Jeremy through a rapid-fire set of questions on scaling a portfolio smartly, balancing growth and yield, and recognising emotional decision-making.
Balancing Yield and Capital Growth
Jeremy's personal approach is to largely ignore yield and prioritise growth, since chasing an extra couple of percentage points of yield often means sacrificing a much larger amount of potential capital growth. He'd only weight yield more heavily if genuinely facing a cash flow crisis. He shares that of his own first 16 property purchases (starting in 2002), around 15 were selected primarily for yield, a mistake in hindsight, since his better-performing properties turned out to be the ones with strong capital growth, largely by chance rather than design. He recalls one period around 2012–2013 (just before the Sydney boom) where properties in his home postcode could be bought for around $300,000 with yields over 5%, something he says would be considered remarkable by today's standards, illustrating how chasing yield can mean overlooking markets with much stronger growth potential.
Using a live "context ruler" visualisation from the upcoming platform (shown in beta at the time of recording), Jeremy illustrates this trade-off directly: across roughly 6,283 measurable Australian house markets, the median gross yield is around 3.9% (average 4.3%), and only around 464 suburbs sit above the 6.3–6.7% range, compared to over 5,700 below it. Targeting a genuinely high yield therefore rules out the vast majority of the market, and with it, the statistical chance of finding markets with meaningfully stronger capital growth instead.
His suggested practical approach: shortlist a cluster of suburbs based on genuine demand-to-supply strength first, and only within that shortlist, if yield matters to your personal cash flow situation, lean toward the highest-yielding options among them, rather than filtering the entire market by yield from the outset.
How Leveraging Equity Helps Investors Scale
Jeremy and Damien recommend getting a fresh valuation around 18 months after a purchase (their general benchmark for confirming whether a property is tracking above the national growth average), then approaching a broker about releasing available equity to help fund the next purchase, a key mechanism enabling faster portfolio growth through leverage.
Should You Always Pull Out Available Equity?
Jeremy's general view is yes, provided it doesn't create cash flow strain, since there's rarely, if ever, been a time in Australia's recent history when no market anywhere was worth investing in. Damien adds that lenders scrutinise the purpose of a released equity loan closely (distinguishing an investment purchase from, say, funding a car or holiday), and shares his own preference for drawing personal funds from an offset account for non-investment purchases, weighing the loss of liquidity against avoiding a separate loan. Both note that deciding whether and when to sell an underperforming property (rather than continuing to hold) ties into this same discussion, and flag a more detailed future series on trading property specifically.
Why Long-Term Holding Alone Doesn't Necessarily Get You Ahead
Jeremy notes a recurring pattern: the longer a property is held, the more its growth rate tends to converge toward the broader long-term average, since over sufficiently long periods, most suburbs and cities tend to grow at similar overall rates. His conclusion: genuinely getting ahead of the average requires periodically reallocating capital (selling and buying elsewhere) rather than relying purely on passive long-term holding.
Accelerating Capital Growth
Beyond careful upfront market selection, Jeremy's preferred lever for accelerating growth is a value-adding renovation, manufacturing additional equity through cosmetic improvements (paint, floors, curtains, tiling) rather than relying purely on market movement. For borderless investors, he suggests leaning on a buyers agent or property manager to organise quotes and oversee the work remotely. He shares that he personally renovated his first several properties himself early in his investing journey, before concluding it wasn't worth his personal time compared to outsourcing the work to trades who could complete it faster and more reliably.
Both agree there's no single correct strategy between buying already-renovated versus buying something in need of work, an already-renovated property avoids the hassle of organising trades but may command a competitive, emotionally-driven premium from other buyers, while a "fixer-upper" (provided it's structurally sound) offers more scope to manufacture value directly. Either way, Jeremy reiterates his consistent view that overpaying slightly to secure a property in a genuinely strong, competitive market is preferable to getting an apparent bargain in a weaker one.
Have They Seen Investors Chase Growth Too Aggressively and Get Caught Out?
Jeremy admits to having taken some risky positions himself in the past. Both reference the well-known example of mining towns like Karratha, where properties that reached around $900,000 at the peak of the resources boom later fell to roughly half that value once the sector declined, despite offering seemingly attractive near-double-digit yields at the time. Damien shares that in his own advisory experience, the most damaging pattern he's seen is investors compounding one underperforming purchase with another, particularly off-the-plan purchases, describing this as a "double whammy" that can meaningfully set back a portfolio's overall progress. He references his own first property (purchased in 2009, on the Gold Coast) as an example of watching other markets boom around the same period while his own investment sat largely flat, a clear illustration of real opportunity cost.
Signs an Investor Is Making an Emotional Decision
Jeremy identifies two opposite patterns: being drawn to a suburb for purely lifestyle or aesthetic reasons (a nice café, friendly locals, tree-lined streets, proximity to a beach or good schools), none of which correlate with the three things that actually matter (risk, growth, and yield); and the reverse, dismissing a genuinely strong-data suburb purely due to a higher crime rate, public housing presence, or a perceived "rough" feel. He shares a specific example: recommending Corio (in Geelong) to a buyers agent years ago, who dismissed it, joking he "wouldn't drive through there without bulletproof glass," and chose an alternative suburb instead. Two years later, Corio had delivered double-digit growth while the alternative he chose was largely flat over the same period.
On the practical concern behind avoiding higher-risk-seeming suburbs (worries about problematic tenants), Jeremy notes that markets with genuinely low vacancy rates naturally reduce this risk, since tenants have less incentive to jeopardise a stable, hard-to-replace tenancy. He outlines three practical protections regardless: landlord insurance, choosing a strong property manager, and avoiding overly aggressive rent pricing (advertising modestly under a property manager's suggested top rent to attract more applicants and better select for a reliable, long-term tenant).
Choosing a Good Property Manager
Damien's approach leans on trial and error and professional relationships built over time in specific areas, while cautioning that online rating platforms can be inconsistent given how much marketing influences them. Jeremy's approach is more numbers-driven: favouring a more expensive property manager on the assumption of better service, prioritising transparency (being told honestly what rent is realistically achievable to secure strong tenant options, particularly in markets with a higher-risk profile) over frequent personal contact, and checking how many properties a given agency already manages in a target suburb via listings data, as a proxy for local expertise and market familiarity.
The "Only Invest in My Own Backyard" Trap
Both flag a common but limiting mindset: investing only in an area an investor personally knows well, rather than genuinely researching the broader national market. Jeremy illustrates the scale of opportunity cost this can create with a hypothetical: living in NSW and buying a local unit might have delivered around 9% growth over three years, compared to roughly 45–46% available in WA or Queensland markets over the same period. His broader point (tied to the "rentvesting" concept covered in more depth elsewhere): given there are thousands of suburbs nationally, the probability that someone's own home suburb happens to also be the single best-performing investment market is extremely low. He acknowledges genuine value in the stability of an owner-occupied home for those prioritising that over pure wealth-building speed, but stresses investors need to be clear-eyed about which goal they're actually optimising for.
He also notes that relying purely on local knowledge as an investment "strategy" (knowing not to overpay in a familiar area) only helps at the point of purchase, it offers no advantage in the years after buying, when capital growth (not local expertise) becomes the deciding factor in the investment's actual success.
Has Jeremy Ever Talked a Client Out of a Biased Decision?
Jeremy shares two examples: talking a friend out of selling a Sydney unit purely because of a high body corporate fee (despite the underlying suburb showing strong DSR fundamentals, and the fee being trivial relative to potential capital growth), and advising a buyers agent against recommending a Brisbane suburb (Richlands) to a client purely because of a new business park expected to create around 500 local jobs, reasoning that with a labour pool in the hundreds of thousands across greater Brisbane, it was implausible that enough workers would specifically relocate to justify treating that as a genuine demand driver.
Damien shares two similar examples of his own: talking a client out of an off-the-plan house-and-land purchase in Tarneit after noticing colleagues (and even the client's employer) were pushing the same development, and a similar small-block, off-the-plan situation in regional Victoria, in both cases recommending sticking to simpler, established, structurally sound properties with genuine land content instead.
Data vs. Sentiment
Both revisit the Corio example, along with a period when commentary strongly discouraged investing in Tasmania, predicting it would be "all over" within 12 months, right before the region delivered strong growth and yields. Jeremy recalls being personally unable to access lending at the time to act on it himself, having seen houses around Hobart available for roughly $300,000.
Is Data Still Useful in an Emotionally Driven Market?
Jeremy argues data is precisely what reveals whether a market is running on emotion or genuine fundamentals, and can highlight whether a market is significantly overvalued relative to underlying demand. Damien raises Victoria's post-COVID reputation among some investors as an example, negative sentiment (partly tied to pandemic-era lockdown experiences) despite comparatively minor practical costs (such as land tax) and, in his view, some of the strongest infrastructure investment in the country, illustrating a gap between prevailing sentiment and the underlying data.
Staying Objective Amid the Noise
Both acknowledge that ultimately, a client or investor's decision is their own responsibility, and that the growing volume of competing marketing voices in the industry makes staying genuinely objective harder than ever. Their shared conclusion: focus on the underlying fundamentals (risk, growth, yield), and try not to let emotion or noise drive the next investment decision.
Closing Thoughts
Damien and Jeremy close by summarising their core message: stay grounded in fundamentals, remain objective, and treat emotional signals (both positive and negative) as a warning sign rather than a genuine input into a property decision. They close by encouraging listeners to like, comment, subscribe, and share the episode with anyone who might be about to make a similarly emotionally-driven mistake.