New Property Investors, Beware!

Getting Started

Damien reflects on how overwhelming it felt starting out, given the sheer volume of conflicting advice from seminars and books, each pointing toward a different city or strategy, which led to analysis paralysis. With experience, his advice now is to get clear on personal goals and affordability, choose the best area, keep the approach simple, and find a good accountant rather than getting caught up in overly complex structures.

Jeremy adds a wry note that plenty of property investing books are, in his experience, more useful as kindling than as genuine guidance, joking that writing a book has almost become an expected rite of passage for self-styled experts. Damien shares that he first came across Jeremy through Ryan McLean's OnProperty podcast around 2014–15, and was drawn to the fact that Jeremy's approach was numbers-focused rather than "salesy."

Where to Start

Damien recommends education as the starting point, alongside finding people you genuinely trust, and suggests speaking with two or three different companies before committing to a plan or buyers agent service, to properly work out personal goals first.

Jeremy suggests there's actually a step that comes before education: becoming aware of the marketing tactics investors are likely to be bombarded with, since a lot of content in the space is more promotional than genuinely informative. He recommends a healthy level of scepticism and encourages asking how any given advisor or platform actually gets paid, whether that's a mortgage broker, a buyers agent, or a property developer, since understanding the incentive structure reveals a lot. He acknowledges that even Suburb Data has its own bias, since the business is built on selling data, but argues that being aware of everyone's bias, including their own, is a useful starting discipline.

Show Me the Data

Damien raises the importance of distinguishing genuine data and research from marketing dressed up as data and research. His advice is to be wary of claims like "this is the best" without supporting detail, and to prefer sources that lay out the actual numbers plainly rather than pushing toward a decision. He also suggests not evaluating a single suburb in isolation, but instead looking at a local government area with multiple strong suburbs nearby, which provides more confidence in a broader pocket of demand rather than betting on one location alone.

Jeremy agrees, and both encourage investors to compare data across multiple providers rather than relying on one source alone, since cross-referencing can either validate a decision or surface a discrepancy worth investigating further.

Do Your Research

Jeremy raises a further heads-up for newer investors: checking whether the founder or leadership of a business comes from a marketing, PR, or sales background, since that often signals whether the business tends to lead with genuine product and service or with promotion. He cautions that in extreme cases, some companies are essentially selling marketing dressed up as a legitimate offering, and given how much money is at stake even at a relatively modest purchase price, getting this wrong can be financially devastating. His overall message is that investors need to treat themselves as the "prey" in an environment where some developers and marketers are actively hunting for buyers, and that thorough due diligence, comparing multiple companies and taking time, matters.

Jeremy also reframes the common warning about "analysis paralysis," noting that while it's real, it can also be used as a pressure tactic to rush hesitant investors into a decision. His view is that property doesn't move fast enough to justify that pressure, and that hesitation is often a healthy signal pointing to a genuine lack of information, in which case the right response is simply to do more research rather than push through the purchase regardless.

Damien shares that he personally experienced analysis paralysis before joining a buyers agent or property investment company around 2016, and reflects on how seminar and book marketing often leans on crowd psychology, pulling someone up on stage to share a success story, encouraging applause and high-fives, to create a sense of urgency or FOMO. His advice is to resist the feeling of missing out, since no one can perfectly time the market, but investors can still limit risk and improve their odds by being deliberate.

Case Study: A Costly New-Build Purchase

Damien shares a client example: a two-bedroom unit purchased in Footscray, Victoria (not far from Melbourne's CBD, in one of the area's high-rise developments) in 2017 for $527,000, which sold this year for $450,000, a $77,000 loss over roughly five to six years, on top of years of mortgage interest paid during that time. Damien notes that while there would have been some depreciation benefit along the way, this doesn't come close to offsetting a loss of that scale.

Both hosts point to this as an example of the risk in prioritising cash flow messaging (such as "this will only cost you $20 a week") over capital growth. Jeremy notes that developers typically only conduct genuine research during the feasibility stage of a project, before the asset is sold, since once it's offloaded there's little incentive for them to research or care about the property's future performance. Anything presented as research at the point of sale, he argues, is more accurately described as marketing.

Population Growth Claims

Jeremy flags population growth statistics as a common marketing device: a report might highlight rising local population without acknowledging that new dwelling supply typically increases alongside it, so the growth doesn't necessarily benefit any one property, and can instead push future growth further out into surrounding areas. He identifies this as part of a broader pattern where newer investors are drawn toward glossy new developments and heavy marketing, factors he associates with underperformance, given new properties tend to combine lower capital growth with higher depreciation (which is a loss, not a genuine benefit) and a heavier focus on cash flow, which he says is often the source of eventual disappointment.

Jeremy references analysis by Luke Metcalfe of Microburbs, which found that, looking at data over recent decades, the typical Australian investment property has actually underperformed the national growth rate. He suggests investors chasing supposedly high-growth new properties, often while overly focused on cash flow, have contributed to that underperformance, whereas owner-occupiers, who are making lifestyle rather than financial decisions, have in aggregate ended up outperforming them.

Cash Flow vs. Capital Growth

Both hosts agree cash flow matters, since it's ultimately what investors will draw on in retirement, but caution against treating it as the primary goal early on. Jeremy notes that a modest positive cash flow, say, $100 a week, only amounts to about $5,000 a year, and investors need to think through how many years it would take to build a deposit for a subsequent property purely from that surplus, absent capital growth. His view is that cash flow is important, but plays a secondary role to growth. Damien adds that assessing personal cash flow starts with understanding overall income (employment income plus any rental income or dividends) versus expenses, and working out the genuine monthly surplus available to direct toward debt reduction or building an asset base, noting that some negative gearing early on can be manageable provided there's a solid buffer, such as cash reserves in an offset account.

Keeping It Simple

Jeremy summarises his approach for new investors into three principles: buy a house rather than a unit, since houses have historically outperformed units; avoid new properties, since established property outperforms new; and avoid vacant land, given the ongoing risk of future oversupply from continued development. His view is that buying an established house in a built-up area, provided the investor has time on their side, is close to a foolproof strategy for someone starting out.

Damien adds a caveat regarding vacant land specifically: in cases where a developer is releasing a limited number of blocks each year (say, 200–250) against a much larger pool of registered, waiting buyers, meaningful capital growth can still occur, since that imbalance reflects genuine demand. Even so, he agrees this scenario is more complex to evaluate than simply buying established, and that keeping to an established property in a solid area remains the simpler path.

Both note a shift in the buyers agent industry over the past several years toward favouring established property, whereas seven or eight years ago, more firms leaned toward new developments. Jeremy suggests some of that earlier pattern may have reflected arrangements between agents and developers, or a belief that new property meant fewer maintenance costs and higher yield, but that the industry has generally become more educated since. Damien notes that maintenance on an older, well-selected property is often manageable (sometimes only a few thousand dollars a year, occasionally as little as $500), provided a building and pest inspection confirms there's nothing major wrong. Jeremy also pushes back on the framing of depreciation as a "benefit" in property marketing, since it's fundamentally a loss being partially offset for tax purposes, not a genuine gain, whereas the real advantage of an established property lies in its higher land-to-asset ratio.

Closing Thoughts

Damien and Jeremy close by reiterating that the overall approach doesn't need to be complicated: buy an established house, not something new, in a solid area, and if time is limited, engaging a buyers agent (after comparing a few firms) or investing time in a property course are both reasonable paths, so long as investors keep asking the right questions and understand what they're comparing when evaluating options like land-to-asset ratio.