“Don't wait to buy real estate. Buy real estate and wait.”

Choosing the Right Property Investment Strategy for You.

Deciding how to invest in property can feel overwhelming, especially if you’re just starting out. But first off... well done! You’ve already made one of the hardest decisions: choosing to invest in property in the first place. That’s no small feat.

Now that you’ve taken the first step, the next ones might feel more achievable than you think. To help you navigate what comes next, we’ve outlined some of the most common property investment strategies in Australia. Remember, there’s no “one-size-fits-all” approach here. It’s about finding the path that best suits your situation, goals, and appetite for risk.

1. Buying Your Own Home

One of the most popular ways to start your property journey is buying a home to live in. It might not seem like an investment strategy at first, but there are two big financial benefits:

1. Over time, your property is likely to increase in value, especially if you hold onto it long term or renovate.

2. If you eventually sell, you’ll generally be exempt from paying capital gains tax (CGT) on the property.

For many Australians, this is the first step into property investing. It’s a great way to build equity that you can leverage for future investments.

2. Buy and Hold

The “buy and hold” strategy is exactly what it sounds like—purchasing a property and holding onto it while its value grows over time. It’s a simple and reliable approach but it often requires patience. Property values typically take 5–10 years to show significant growth.

The good news? You can rent the property out while you wait, which can help cover mortgage costs. Plus, you may be able to claim a range of tax deductions, including:

• Loan interest

• Property-related expenses (advertising, utilities, insurance, etc.)

• Tax depreciation

These deductions can be game-changers when it comes to cash flow, so it’s worth getting advice to make sure you’re maximising what you can claim.

3. Gearing Your Property: Positive, Negative, or Neutral

Gearing is a strategy that involves borrowing money to buy a property. Your investment can be positively geared, negatively geared, or neutral:

• Negative Gearing: Your rental income doesn’t cover your expenses, so you’re running at a loss. While that doesn’t sound ideal, you can offset these losses against your taxable income, which reduces the amount of tax you pay. Many investors combine negative gearing with the buy-and-hold strategy, waiting for long-term capital growth.

• Positive Gearing: Your rental income exceeds your expenses, giving you a profit. This surplus can help pay down your loan, but keep in mind—you’ll likely pay more tax since it’s considered additional income.

• Neutral Gearing: This is when your expenses and income balance out, so you’re essentially breaking even.

Example: Negative Gearing in Action

Sindy buys an investment property for $450,000 and takes out a $400,000 loan. Her annual interest is $28,000, but she rents the property for $500 per week ($26,000 per year).

Her expenses are $2,000 more than her rental income, so she’s negatively geared. But because of this, Sindy can deduct the $2,000 loss from her taxable income, reducing her overall tax bill.

4. Renovate and Hold

This strategy is about boosting your rental income and property value through renovations. The idea is simple: make the property more appealing, increase the rent, and potentially benefit from capital growth.

Example: Renovation Payoff

Michael buys a property for $1.15M in a prime location and spends $200,000 upgrading the kitchen, bathrooms, and outdoor spaces. Post-renovation, the property value jumps to $1.55M and he increases the rent from $1,100 to $1,500 per week.

The extra rental income helps him cover renovation costs and provides a cash surplus.

Of course, this approach comes with risks—renovations don’t always go to plan and there’s no guarantee you’ll make back what you spend.

Note: To full this off you need to know what you are doing.

5. Flipping Properties

If you want faster returns, flipping might appeal to you. This involves buying a run down property, renovating it quickly, and selling it for a profit—usually within 12 months.

The upside? You can see results relatively fast. The catch? It requires skill, precise budgeting and solid market knowledge. Overcapitalising (spending more than the property’s value will increase) is a real risk. Flipping is often best suited to experienced investors who know how to manage the process tightly.

6. Subdividing Property

Subdivision is a strategy where you purchase a block of land and split it into two (or more) smaller parcels. This can open up several opportunities:

• Sell off one portion while keeping the other.

• Use one as your residence and rent out the other.

• Keep both as rental properties for double the income potential.

Subdivision can significantly boost a property’s value but it’s not a quick process. It requires time, council approvals and careful planning. If the market shifts during the process, it can also impact your profitability.

The Bottom Line

There’s no single “right” way to invest in property—it all depends on your current financial position, goals and what kind of investor you want to be.

You might start with negative gearing for tax benefits, then move into renovating, flipping or positive gearing later. The key is staying flexible and choosing a strategy that aligns with your long-term vision.

At Arin Russell Property, we’re here to help you make those decisions. Whether you’re taking your first steps or looking to build a thriving property portfolio, we’ve got the experience, knowledge and tools to guide you.

All the hard work has been done for you.

Want to know the right strategy for your situation?

Let’s chat. Book a free Game Plan Session today and start building a property investment plan that works for you.