How To Start Building Your Property Portfolio From Scratch? 5 Must-follow Steps. [APS091]
Have you ever noticed…Buying an investment property seems pretty straightforward. You browse online listings, negotiate a price, sign some paperwork, transfer the money, and just like that, the property is yours. But the real challenge was never about the buying process itself. The real question is: Did you buy the property that actually suits you… And more importantly, can it transform your life? Buying the right property can put you ahead of 90% of investors. But buying the wrong one? It means wasting ten years of hard work for nothing. Some people buy investment properties to make money. Some do it to reduce taxes. Others see it as part of their retirement plan. Some want to retire early or pass wealth down to the next generation. The real issue is that not many people can clearly explain how to do any of that. So in this video, I’ve boiled down the entire process of investing in Australian property from scratch into five practical, easy-to-follow steps. If you just follow along and take action step by step, you’ll soon be building a strong and stable property portfolio.
1. Find Your Why
Buying an investment property? That's actually the easy part. You just find a house that's up for sale, negotiate the price, go through the contract, sign on the dotted line, and transfer the money to the seller. Done — it's yours. But buying a good investment property? That's a whole different story. In fact, it can be complex.
Take the stock market, for example — if you're too lazy to pick stocks, you can just go buy an index fund. But the Australian property market doesn't have index properties. Every property is a unique, standalone item — different location, different type, different design, different structure, different year of construction, different condition… everything varies.
Buying property in Australia is just as hard as picking individual stocks. Different people, depending on their reason for investing, will find different kinds of investment properties suitable for them. So here comes the deeper question: Why do you want to buy an investment property?
To answer that, you need a clear thought process. When you buy an investment property, the ultimate goal is, of course, to make money. But what do you want to do with all that money? How much is enough? And when is it enough? In Australia, there are two main ways property makes money:
Capital growth. For example, you buy a house for $1.5 million and sell it for $2 million — you've made $500,000. Of course, there are fees and taxes involved, but let's put those aside for now to keep things simple.
Rental income. This comes into your bank account monthly — it's the source of cash flow for your property investment.
So now ask yourself: Are you buying a property mainly for capital growth? Or are you chasing the cash flow? Of course, you're free to do your own research. But at AusPropertyStrategy, we've come to this conclusion: The most profitable part of Australian property investment is capital growth. If you're chasing high cash flow, there are plenty of other asset classes that outperform residential property. The real purpose of rent is just to help you hold onto the property longer, long enough to capture greater capital growth.
Now, if you're investing to make money, what do you want to do with that money? Or more precisely, at what point do you say, "I've made enough"? Most Australians face a similar struggle. They're stuck in a job they don't love, making just enough to get by, unable to save. They want to change careers but are never brave enough to do so. They dream of quitting their job for a trip that starts the moment they decide — but don't have the guts, because no work means no income.
If you're over 35, you might already own your home, but with a mortgage. You need to look after the kids. You ask yourself: When will I ever break free from this grind and live with more freedom? If you're 45 and still working, your mind's probably on retirement. But your super isn't enough, and that pension the government gives you — will it really cover your needs? If you're 55 or older, you might be thinking about one last push before retirement…But you feel stuck, afraid to fail, because starting over at that age? That takes an enormous amount of courage. High-income earners worry about how to pay less income tax. Business owners think about how to expand or how to protect their assets if they get sued or how to safely pass on their wealth to the next generation. In the end, the key is to find your own driving force, to dig deep and discover the real reason behind your desire to invest in property.
For most people, there's really just one core goal: To use property investment to build enough passive income to replace their wages, so they can change jobs anytime, retire anytime, and travel anytime. Now, let's clarify something. Retirement doesn't mean you just sit around doing nothing. For most people, doing nothing for too long gets boring very quickly. Here's a little test: When you're busy with work and finally get to take a holiday, Do you start missing work after just 3 days? Or do you relax for 1 or 2 weeks before getting restless? Or maybe, even after your trip ends, you still feel like you haven't enjoyed enough? If you're the "3-day" type, you probably won't ever retire, but you should still have the option to retire anytime. If you're the "1-to-2-week" type, you'll probably want to work less in the future. Maybe just 2 days a week. You'll want that balance: work less, enjoy more. But if you're the third type — the kind who never wants the break to end — Trust me, you need to build passive income as fast as possible so that you never need to work again. And that means: You're the one who needs property investment the most.
Everyone has their own reason for investing. And everyone should have a clear goal — one that ties directly to money. The key is: Find your own goal. Don't chase property just because everyone else is doing it. And if you don't know where to begin? Just go to the AusPropertyStrategy website and book a 15-minute free consultation. We'll walk you through it.
2. Strategy Design
Once you've set your goal, the next step is clear: You need to find a path that leads you to that goal. Let's say you've set a target: Twenty years from now, you want to have built enough passive income through property investment, so that you can retire whenever you want. Then you'll need to work backwards from that outcome, and figure out how you can get from your current financial situation… to your future goal, within those 20 years. And to do that, there are quite a few questions you'll need to answer.
What Entity Will You Use to Buy Property? Should you buy it under your own name? Or through a company, a trust, or a self-managed super fund? This decision affects your tax, investment return and asset protection. For that, please check out our video [APS076]
What Type of Property Should You Buy? Will it be a freestanding house? A townhouse? Or an apartment? Are you buying a brand-new property, or something second-hand? Different types of properties come with different levels of capital growth, rental yield, maintenance costs, and tenant risk. Your choice needs to match both your strategy and your financial capacity.
Where Should You Buy? In which States or Territories? Should you buy in a big city like Sydney or Melbourne? Or should you go for a regional town? The answer depends on your budget, your goal, your risk appetite, and your long-term plan.
When Should You Buy? Timing the market is never easy. Do you buy when the market is dropping and no one's buying? Do you wait for signs of recovery? Or do you jump in only after prices clearly begin rising? Or maybe you ignore market timing completely and just buy when you're ready? There's no one-size-fits-all answer, but you need to think about what suits your investment horizon, finances, and risk tolerance.
What Happens After You Buy? Do you go for long-term rental, or short-term rental like Airbnb? How long should you hold the Property? When should you sell? And most importantly — how do you make these decisions in a way that's tax-efficient and helps you maximise your return?
These Are the 5 Fundamental Strategy Questions You Must Ask Yourself. Some people might say: "I don't even know what questions to ask…" Or, "Even if I know the questions, I don't know where to find the answers." You can try to look up all the answers yourself. There are tons of AI tools out there now. Finding some answers isn't hard anymore. The real challenge is: Are the answers you find actually correct? For example, if you're researching tax rules, that's straightforward. The ATO website lays it all out clearly. There's usually a right or wrong answer. But when it comes to property investment? It's different. There is more than one pathway. It all depends — it's subjective.
Different strategies suit different people. That's why — especially for beginners with no experience — it can feel almost impossible to figure out the right approach on your own. And that… is exactly why AusPropertyStrategy exists in the first place. We're here to guide you — through every decision, with clarity and strategy — so you don't have to figure it all out alone.
3. Budget
Once you've designed your investment strategy, the next step is to prepare your funding. And here comes the classic question: Do you choose to pay in cash when buying a property? Well, if you're using full cash to invest in real estate, chances are… You are rich, and you might be doing something a little silly. Why? Because you're ignoring one of the most powerful tools in wealth creation — leverage. Leverage allows your assets to grow at a multiplied speed. If you're buying a property in full cash, you might actually get better returns in the stock market, which doesn't have all the buying, holding, and selling costs that property comes with.
In Australia, real estate investment is all about leveraging and smart strategy. Nearly everyone investing in Australian Property uses bank loans. But that brings us to a bigger question: Say your plan is to buy 6 properties over the next 20 years, with a total value of $6 million. At 80% LVR (Loan-to-Value Ratio), you'll need $4.8 million in loans. So, which bank is going to lend you that much money? With the right strategies, it's possible to double or even triple your borrowing capacity. For specific techniques, check out our episode [APS085]
Once you know how much cash you've got and understand your borrowing power, you'll be able to calculate your property price ceiling — the maximum you can afford. And that becomes your budget for the next property. But what if your budget falls short? If you already own a home, you can ask the bank to do a valuation. The increased value — the part that's grown — can be pulled out in cash. This is called equity release. Or, you could ask your parents to chip in some cash. If your borrowing power is too low, you can consider applying for a loan together with your partner. There's also a very useful tool called a Guarantor Loan. Here's how it works:Your parents let you use their savings or the equity in their home as collateral.
The bank then gives you a loan over 80% LVR without you paying the LMI (Lenders Mortgage Insurance). But if you default on the loan, your parents will be responsible for paying it back. There are more advanced strategies too, like using a trust structure or a self-managed super fund (SMSF) to boost your loan capacity.
By now, you should have a clear idea of your maximum price range. And here comes the next real-world question: What kind of property — and in which location — can you actually buy with that budget? We've met buyers who come to us with very ambitious goals. For example, someone wants to spend $600,000 and buy a freestanding house in Sydney. Now, let's be honest — you'd have to be really out of touch with the market to make a request like that. We're not magicians. It's just not possible to buy properties below market price, especially in a hot market. What we can do is help you buy a property that suits you at a fair market price. If luck is on your side, maybe you'll even get one slightly below market. But at the end of the day — you need to keep your expectations realistic.
Everything we've talked about here falls under the demand side — how much you can afford, and what kind of property you're looking for. Once that's all sorted, the next step is to head out into the marketplace. But before you do that, here's the key question: What kind of information do you need to know about the supply side? And how do you do your research?
4. Market Research
Market research is the key to buying the right property, at the right time, for the right price. I put together a monthly chart showing the property price trends in each major Australian city — you can find it on our official website. This chart is one of the quickest and most intuitive tools for tracking market movements.
Now, if you're investing within your home state, you can drive over and check things out in person. But for interstate investors, in most cases, you'll need to rely on data-driven research. There are plenty of platforms today where you can access first-hand market data, but the cost to use these platforms is quite high with a long learning curve. That's why many everyday investors tend to buy properties near where they live — simply because they're familiar with the area. But remember — Australia is huge. There are plenty of better opportunities beyond your local suburb. It all comes down to how much time you're willing to invest in learning and researching.
During a market upswing, the speed of identifying trends, locking onto a city or region, and then zooming into individual properties is very important. That speed basically determines how much you'll end up paying. In hot markets, what really tests you is whether your actions can keep up with rising prices. But here's the problem: if you're working full-time, and after work you like to have a drink, enjoy a BBQ on the weekends, and your schedule is packed with social activities — How are you going to find the energy and time to study the market, do research, and inspect properties? Even if you dedicate every spare moment outside your 9-to-5 to property investment, how many properties can you realistically inspect and analyse each day? One or two? This is exactly where professionals come in.
At AusPropertyStrategy, our new property division works directly with top developers and builders across the country, giving us access to great properties. Our buyer's agent team for second-hand homes knows listing agents across all high-potential suburbs in Australia, meaning we often get access to off-market properties. And we've got dedicated staff doing this full-time — one person can research and filter 20 properties a day. For office workers, achieving this level of coverage and efficiency is nearly impossible.
If you insist on doing it yourself, make sure you calculate these key numbers for every property: Buying costs, including stamp duty, stamp duty surcharge, legal fees, opportunity cost, early renovation costs, etc. Holding costs, including land tax, land tax surcharge, council rates, water rates, strata fees, insurance, maintenance, property management fees, interest payments...Selling costs, including agent commission, marketing fees, rental vacancy loss, and capital gains tax.
If you find this too hard — or simply don't want to start from scratch — Just invest in a good course. Our Masterclass is coming soon. These kinds of courses can save you time and costly trial-and-error.
Of course, some people just don't want to spend money.Their knowledge often comes from TikTok, YouTube Shorts, or some random social account. But don't forget — short video platforms are where agents compete for leads, not where they give away real knowledge. What you think is "educational content" is just well-disguised marketing.
Buying a property is like racing against time — and against your own ability to analyse and learn. When you're buying your first investment property, you'll probably be overly cautious. You're scared of making a mistake, and you're constantly looking for the perfect house, which often means you miss good buying opportunities. But once you've bought your 10th Property, you'll find yourself relying on just two things: the numbers on paper and the outlook of the area. Then, you pull the trigger. The more you buy, the more confident you become. The more you buy, the easier it gets.
5. Time to Take Action
Step five is all about taking real action. If you're buying on your own, you'll need to start calling agents, booking inspections, requesting contracts, reviewing documents with your solicitor, and so on. It's a standard process, but many people struggle with the soft skills involved — Negotiation, communication, asking for better terms…Some people freeze up when they meet agents. They don't speak up, negotiate, or even want to ask questions — they feel the pressure. If that's you, ask a friend who's good at talking to help. Or just leave it to a professional.
Now, if you buy a good investment property, whether it's positively or negatively geared, it shouldn't stress your cash flow. Then your next step is simple: Hold it, wait for it to appreciate, refinance it, extract equity — and buy your next one. Then repeat. And repeat again, until you reach your investment goal. That kind of execution? That's what makes people succeed. There are two types of learning:
Knowing — when you've learned it but haven't acted.
Mastering — when you've taken action, changed your behaviour, and turned it into a habit.
Watch the video version of the blog on YouTube.
