Property guru reveals the biggest mistake Aussies make when investing in real estate

A property investment expert has urged Australians to think carefully before buying property, saying the move should not be seen as a get-rich-quick scheme.

Open Corp founder and CEO Cam McLellan said it is important that people identify their financial goals before investing in property.

“If you want to get rich quick, real estate is not for you,” McLellan, who bought his first investment property at 20, told Daily Mail Australia.

‘[Investors] must be aware of this [the concept of] Getting rich quick is like losing money quick.”

Mr McLellan said a good property investment delivers long-term financial results.

He said people cannot afford to think that moving is as simple as buying a few properties that will help them build a financial foundation for life.

“Investing is about building a safe, slow portfolio that will give you a long-term growth outcome, so don’t think you’re going to invest in it and forget about it,” he said.

He revealed that his firm carefully considers each client’s financial situation to assess whether investing in real estate is a realistic option for them.

These considerations include their income, the number of dependents they have and their existing employment/contractual arrangement.

“We identify the key reason for investing and what people want to achieve financially,” Mr McLellan said.

“Just doing X amount of dollars in X amount of time won’t get you there.”

He explained that each person’s financial strategy depends on their income and career prospects.

“We deal with a lot of professional athletes, such as AFL players and NBA players, so we have set up their financial strategy very differently to someone who sees themselves having a longer career,” Mr McLellan said.

More than 2.2 million Australians, or 20 percent of the country’s 11.4 million taxpayers, own an investment property, according to ATO figures.

More than 70 percent of investors own at least one investment property, while almost 20 percent own two.

Mr McLellan, who has bought a property every year for the past 30 years, said there were ways Australians could invest in property more effectively.

He said one of the biggest mistakes people make is waiting for the right time to invest and missing the opportunity to buy and grow the value of their property.

‘I’ve bought property every year since the first property I bought, but some markets in the capital [were] not good for investment at that time,” said McLellan.

“Many people are waiting on the sidelines for the perfect time to invest.”

Mr McLellan said the key to property investment is identifying ways to enter the market while minimizing risk.

He said this can be achieved by finding capitals with ‘growth corridors’, such as infrastructure development, that will lead to population growth.

“Matching that with the council’s available supply in those areas that will give you the fastest growth and finding the best property for that particular area,” Mr McLellan said.

“Have a very clear strategy for choosing a high-performing property every time, and don’t pick a loser that will remain stagnant for a long period of time.”

The strategy has helped one of Mr McLellan’s clients, Adam and Belinda Robinson, build an impressive portfolio of seven investment properties worth as much as $6 million.

Ms Robinson previously told Daily Mail Australia that Mr McLellan encouraged the couple to invest in properties outside Sydney and the move paid off.

“That held us back because we were just saving and waiting to buy something close to us,” Ms Robinson said.

The latest figures from property website CoreLogic show Brisbane, Adelaide and Perth have seen the strongest capital growth for houses and units this year.

House and unit values ​​in greater Perth increased by 20.7 per cent and 23.7 per cent between November 2024.

Greater Adelaide rose 13.4 per cent and 18 per cent, while values ​​in greater Brisbane rose 11 per cent and 18 per cent.

Perth house prices saw the strongest capital growth in the past five years, with values ​​rising by as much as 81.5 per cent.

Despite the financial benefits of owning investment properties, Mr McLellan said property investors are not helping the current housing crisis across Australia.

He said about 80 percent of real estate investors buy established properties, meaning they don’t add to the housing supply.

“The problem is that Australia isn’t building enough houses and we’re increasing the population,” McLellan said.

‘The government is not allowing enough building permits to take place, so we are not building enough houses to meet current supply, let alone the population increase we have predicted.’

Australian Bureau of Statistics (ABS) figures show housing approvals across the country have fallen to their lowest level in 12 years, with 162,892 houses and apartments approved in June 2024.

This figure represents a decline of 8.5 percent from the previous year and the lowest since 2011-2012.

In the year to July, 432,150 migrants arrived in Australia, preliminary ABS data showed.

House prices in Australia remain unaffordable, with the average price of houses and units at $872,000 and $662,000, according to figures from PropTrack.

Sydney remains the most expensive capital to buy a home, with the average price of a house and a property in the harbor city worth $1,453,000 and $818,000.