The 3 Biggest Property Investment Mistakes – Part 1

In a property market that moves quickly and sometimes unpredictably, making smart, well‑informed investment decisions has never been more important.

Every purchase you make shapes your long‑term financial position. Get it right, and you build momentum, security, and genuine wealth. Get it wrong, and the consequences can linger for years in the form of poor cashflow, stagnant equity, or the stress of carrying the wrong asset.

The challenge for many new investors is simple: property can look far easier than it really is.

Glossy brochures, tidy yield projections, and perfectly staged photos paint a picture of effortless returns. But behind every great investment is a layer of analysis, planning, and due diligence that most people never see, and often never get taught.

That’s why we’re launching this three‑part series: to break down the most common mistakes everyday investors make, and to show you how to avoid falling into the same traps.

In Part 1, we’ll explore the biggest and most costly mistake of all: misunderstanding the numbers. This is where investors get tripped up by shiny marketing, optimistic rental estimates, and projections that ignore the real‑world costs of owning a property.

In Part 2, we’ll dive into why not having a clear strategy can derail even the most promising purchases, and how setting a plan early prevents you from drifting into random, emotionally driven investments.

And in Part 3, we’ll look at how buying the wrong type of property - from high‑maintenance old homes to leasehold apartments with escalating fees can turn a seemingly good deal into an expensive headache.

By the end of this series, you’ll have a clearer understanding of what separates confident, successful investors from those who simply “hope for the best.”

Property Investment Mistakes Part 1: Not Understanding the Numbers 

Property investment is full of excitement, especially when you’re handed a glossy brochure showing a sleek building, stunning interiors, smiling residents, and big, bold numbers promising “projected yields” and “estimated returns.” It’s easy to get swept up in the presentation.

Developers know this. Marketers know this.

But what many new investors learn the hard way is this: the deal on paper often collapses the moment you dig into the real numbers.

Let’s talk about why this happens, and walk through a real-world example that shows how something that looks like a solid investment on a brochure can quickly turn into a weekly drain on your bank account.

The Problem With Surface-Level Numbers

Almost every property brochure highlights the same things:

• A shiny headline yield

• A low-maintenance lifestyle

• Projected rental returns

• “Strong demand” for the area
  

The numbers are always tidy, simplified, and conveniently positive. That yield being advertised? It usually comes from the most optimistic rent estimate divided by the purchase price. These projections rarely include the actual, unavoidable costs of owning property.

And that’s where investors get caught out.

The Reality: Cashflow Isn’t Just About Rent and Purchase Price

Let’s take this new real‑world example - a $739,000 one‑bedroom apartment, promoted in the brochure as:

• “An investment that will appeal to tenants”

• “High‑demand urban location”

• “Low‑maintenance modern living”
  

The brochure ticks every emotional box. On paper, it looks clean, simple, and tenant‑friendly.

The rental appraisal comes in at $660 per week, giving a 4.6% gross yield. Many investors see that number and think: “That’s pretty reasonable for a new apartment, this should stack up.”

But the numbers tell a completely different story. Below is the breakdown investors wish they were shown upfront.

A Real Example: The 4.6% Yield That Quickly Falls Apart

Purchase Price: $739,000

Appraised Rent: $660/week

Gross Yield: 4.6%

Loan: 100% borrowed at 5.5%, interest‑only

1. Mortgage Costs (5.5% Interest-Only)

$739,000 × 5.5% = $40,645 per year = $781 per week

Already, rent is well below mortgage costs, but let’s keep going.

2. Rates

Apartments often have lower rates than houses, but still significant: Approx $2,200 per year → $42 per week

3. Insurance

Contents/landlord cover for apartments: Approx $1,200 per year → $23 per week

(Building insurance is usually covered via the Body Corporate or Residents Association.)

4. Property Management

8.5% + GST on rent ≈ $72 per week

5. Maintenance Allowance

Even new apartments have appliance repairs, ventilation servicing, filters, etc.→ $20 per week

6. Residents Association / Body Corporate Fees

This is the big one. New apartments typically have substantial annual fees covering:

• Building insurance

• Long‑term maintenance

• Lifts

• Common areas

• CCTV

• Amenity upkeep
  

A realistic cost for this type of development: $4,500 per year → $87 per week

Now Let’s Add It Up

Total Weekly Costs:

• Mortgage: $781

• Rates: $42

• Insurance: $23

• Property management: $64

• Maintenance: $20

• RA / Body corp: $87

• Total = $1,018 per week

Now we can factor in the annual income to give us the actual weekly cashflow:

$660 – $1,018 = –$358 per week

Where It All Fell Apart

The brochure didn’t lie; the 4.6% yield is correct. But the brochure leaves out:

• Mortgage costs

• Body corporate fees

• Rates

• Management fees

• Insurance

• Maintenance

• And any future increases to these costs
  

This is the core mistake: believing the investment is “good” because the headline figure looks good.

The truth is:

A 1‑bedroom apartment at $739k, renting for $660/w, could lose roughly $365 every single week, even before unexpected repairs or vacancies.

The brochure focuses on the “tenant appeal,” “high demand,” and “low maintenance,” but none of that changes the fact that the cashflow is deeply negative from day one.

Why This Mistake Is So Common

1. People want the deal to work. Emotionally, it feels good. The marketing is polished. The property looks impressive.
   

2. Developers don’t highlight the true costs. Their job is to sell, not educate.
   

3. New investors often don’t model long-term affordability. Interest rates rise, rents flatten, costs increase, but brochures never forecast that.

   
   

4. It’s easy to confuse gross yield with profit. These are very different things.

How to Avoid Making This Mistake

Always run a full cashflow model - not just purchase price ÷ rent. It's important to stress-test your numbers: “What if interest rates rise?” Include every cost, even the small ones, and ask yourself: “Would I still buy this if I needed to top it up by $200–$300 per week?” If the answer is no, then it might be time to consider other properties.

But, aren't we missing something?

Up to this point, the numbers we’ve run assume the property is rented 100% of the time. But in the real world, that rarely happens.

Any reputable modelling will have some degree of vacancy per year as a standard assumption. No matter how “high‑demand” the brochure claims the property is, vacancy can still occur because:

• Tenants move out unexpectedly

• Repairs or compliance checks take time

• Marketing and viewings slow things down

• Seasonal demand varies

• Competition can increase overnight

  
  

Even in excellent rental markets, most investors should plan for 1–3 weeks of vacancy per year for a standard tenancy, and more for CBD apartments or niche properties. 

How Vacancy Impacts the Example Property

Let’s apply just 2 weeks of vacancy to the $739k apartment:

Annual rent at $660/w:

$660 × 52 = $34,320 (advertised income)

Actual rent with 2 weeks vacancy:

$660 × 50 = $33,000

That’s a loss of $1,320 in income; gone before you even start. And because all expenses remain the same, vacancy worsens the cashflow dramatically.

What Vacancy Does to the Weekly Cashflow

Earlier, we calculated the weekly loss at –$358 per week

But that assumed perfect occupancy. Using the real vacancy‑adjusted income, the cost is $381 per week. That means the vacancy adds another $23 per week of losses.

Why This Matters

When investors ignore vacancy, they’re effectively counting on perfect conditions forever, which is not how property works. And when a property is already losing hundreds of dollars per week at full occupancy, vacancy becomes the blow that pushes the investment from “uncomfortable” to financially draining.

This is why relying on brochure buzzwords: “high demand,” “low maintenance,” “appeals to tenants”, etc., is so dangerous. They imply strong rental performance, but they never guarantee occupancy, and they definitely don’t cover the carrying costs when the property sits empty.

The Bottom Line

A 4.6% yield can look fantastic on a glossy brochure. But when the real costs hit, it can become a long-term negative cashflow burden.

Understanding the numbers can be the difference between a property that builds wealth and one that drains it.

The Power of Making Smart, Transparent Investment Decisions

While it’s easy to look at an example like this and feel discouraged, the truth is far more empowering: when you run the right numbers upfront, great property investments absolutely do exist. 

Properties with solid cashflow, long‑term growth assets, and strong-performing rentals are out there - the key is knowing how to separate genuine opportunities from glossy marketing.

And that’s where transparency becomes your greatest asset.

Companies that specialise in property investment and offer clear, open financial modelling give you a massive advantage. They show the real numbers, the real costs, and the real performance you can expect, long before you ever sign a contract. Their systems, tools, and due diligence processes are designed to protect your long‑term wealth, not push a quick sale.

Compare that to private sellers or developers who rely on buzzwords, high‑level yields, and carefully curated brochures. Without full disclosure, you’re left to guess what the real cashflow looks like - and guessing is never a strategy.

When you partner with people who value transparency, the whole process becomes clearer, safer, and far more rewarding. You’re able to make decisions based on evidence, not emotion. You can model different scenarios, understand the risks, and choose investments that genuinely strengthen your financial future.

At the end of the day, property investment isn’t about avoiding mistakes; it’s about being equipped to make well‑informed decisions. With the right guidance, the right calculations, and the right people behind you, the numbers can stack up beautifully, and the results can be life‑changing.

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