Growth Vs Yield: The Fight That Decides Your Portfolio
Why chasing yield early is the slowest way to build a property portfolio.
We’re AUS Property Investors, we’re here to vibe with you all the way to $150,000 Passive Income.
This Month’s Run Down:
🆚 Growth vs Yield, The Truth That Trips Up Most Investors
💣 The Yield Trap, Why Playing it “Safe” Might Be Stalling Your Portfolio
💸 How Bill Turned 4 Properties Into $120K Passive Income
💥 Ben’s Cashflow Play Looked Smart... Until It Didn’t
📉 Chasing Yield? Here’s What It’s Really Costing You in Equity
📚 The 3 Things That Actually Matter When You Invest in Property
🧠 Property Isn’t About Picking Suburbs, It’s About Building Momentum
🧰 FREE Tool of the Month
“Just Buy Something Cheap…” Said No Successful Investor Ever
You ever feel like you’re drowning in property advice?
One minute someone’s telling you to buy for cashflow. The next it’s all about capital growth. Then someone else says, “Just buy land close to the city and wait,” while another mate swears by regional units that give you a couple hundred bucks a week in passive income.
Well, I am sick of it and I bet you are too.
We give it to you straight here and I want to give you the information I wish someone had slapped me with earlier:
There are only 3 things you actually need to focus on in property.
That’s it.
Take a breath and relax, you don’t need to think of 5,000 things!
If you understand these 3 things, like really understand them, you may be able to build your very own portfolio that gives you options, freedom, and long term wealth.
If you ignore them?
You’ll end up with one or two random properties, a bit of extra rent each month, and no real way to scale.
“Give them to me Joe! What are these 3 things?”
Cash/Equity: Your deposit. Whether that’s cash in the bank or equity in an existing property. (Important! Equity can be as good as cash but takes less time to build up.)
Borrowing/Serviceability: What the banks are actually going to lend you. Because you can’t buy without a loan, and you don’t get far with just hopes and spreadsheets.
Cashflow: Think of this as what you can afford from a negative cashflow over the foundation phase of building. (Rental income minus expenses. Keeps the lights on, keeps you in the game.)
That’s the entire game.
Everything else, interest rate predictions, suburb gossip, and what Karen’s accountant said, is just noise.
Now, most people say they get this stuff… but when it comes time to act, they panic.
They chase yield because it feels comfortable. They want to see cash coming in, even if the property's not going anywhere.
They confuse a few hundred bucks of surplus rent with strategy. And then they wonder why they’re stuck.
So let me walk you through how this actually plays out in real life.
Two investors. Same starting point. Same budget…… & probably same super contribution.
Two completely different outcomes.
And one of them gets left behind.
Let’s break it down.
For The Newbies
A very warm welcome to all the new subscribers! We’re thrilled and honoured to have you as readers and truly appreciate your thoughts and feedback 🙏.
Each edition of this newsletter will contain a deep dive into the property experts, investors, and all-around legends that grace us with their time and energy for the Facebook lives we run in our Facebook Group Aus Property Investors.
Now Australia’s Largest Property Investment group with over 82,000+ members!
For those who need a catch-up when they aren’t free for an hour [or sometimes 2] at 7:30 pm Wednesday night (we know we’re not), we created this newsletter, along with recording the sessions on our Youtube channel.
June 2025 Live Guests!
Mike Mortlock
Mike is an industry leader in tax depreciation, he is the Managing Director of MCG Quantity Surveyors. He has completed thousands of depreciation schedules for commercial and residential property and is in demand as a public speaker. Mike is regularly featured in the Australian Financial Review, Real Estate.com, in Australian Property Investor and other print and radio publications.
During this session, our discussion centred around How Melbourne Property is Looking With Mike's Data! With the juicy details unpacked along with heaps of practical key insights to help any property investor thinking about Melbourne 💎!
Mike: "We can actually see Melbourne hitting the charts in a way that it hasn't before. We talked about it being around 13% pre-land tax dropping to 5%. These days, it's in the low 20%. So it's a bit higher than the long-term average that we've seen in our data, and I think it's only going to increase in the next little while."
This is a teaser of the gold 🏅 discussed in The Data Showing The Truth About Melbourne💰 episode with more found by clicking the link below 👇
Todd Sloan
Todd Sloan is the popular founder of Pizza and Property, a great media platform that shares expert insights on property investing and personal finance. With a focus on helping everyday people build wealth through smart property decisions.
As a former real-estate agent, Todd combines practical advice with engaging storytelling. His approach makes complex property topics accessible and actionable for a wide audience. Through his content, he inspires and empowers individuals to take control of their financial future.
This session’s conversation revolved around the Proven Investor Strategy That Helps Achieve Sustainable Property Success and Financial Freedom 💎
Todd: “For people that say like you can’t do it the same way, they’re right. You can't do it the same way. But then if you rewind 20 years ago... it's not done that way anymore either, but it doesn't mean you can't make money.”
There are incredibly valuable insights in the How To Build Your Own Multi Million Dollar Portfolio episode. Explore the wealth of information by clicking the link below 👇
Azeem Rahman
Azeem Rahman, find him on LinkedIn, is a seasoned property investor, giving out tips and tactics as well as building his own multi-million dollar portfolio. He is Qualified Property Investment Advisor [QPIA] with a wealth of experience in building his successful portfolio.
Azeem specialises in identifying key mistakes that often hold investors back from maximising their returns. Azeem’s practical advice and deep market knowledge empower investors to make smarter decisions and grow their portfolios efficiently.
In this session, we focused on What Investors Are Doing Wrong & How You Can Avoid 🛑 Them 😮💎🍎!
Azeem: “When I started off and I didn't have a plan, I just assumed that you can just throw money at this thing and it'll just grow up in value. And that's what most people think because they're not educated. But sadly, that's not the case.”.
This is a glimpse of our discussion on Key Mistakes Stopping You Building Your Portfolio episode. Dive into the many gems 💎 by clicking the link below 👇
Meredith Cowley
Meredith Cowley is a seasoned short-term rental property entrepreneur. She is the co-founder of Custom BnB Hosting, a premier Australian property management company specialising in short-term rentals.
With a background in property investment, Meredith has bought, renovated and sold numerous properties, gaining a deep understanding of the real estate market. She realised that positive cash flow properties were the key to success and discovered that listing properties on platforms like Airbnb could yield higher returns than traditional leasing methods.
This session’s conversation revolved around The Truth About Can You Make Money 💰 From Airbnb And How!
Meredith: “ Pick your budget, pick your avatar. So, who is going to be your target guest? Are you going to be getting a $120 a night guest or are you getting a $420 a night guest? They're going to have different expectations about the quality of furniture.”
There are incredibly valuable insights in the The Truth About AirBnB in 2025 episode. Explore the wealth of information by clicking the link below 👇
Growth or Cashflow?
Investor A: The Growth Game
Let me introduce you to Bill🪴.
Now, Bill could’ve been a flower pot man, but today he’s a property investor with $500,000 and half a clue.
He’s done a bit of scrolling on CoreLogic, watched a few YouTube videos, maybe even tuned into one of our Wednesday lives (good on you, Bill).
But here’s the key thing: “Bill’s not just buying a property, he’s building a portfolio.”
So, he chases growth first up.
He picks a market backed by real data: Jobs flowing in, infrastructure going up, not enough houses to go around. Yield’s only 3.8%, nothing to write home about, but Bill’s not chasing pocket change, he’s chasing leverage.
And just to pause for a second… yes, rates go up and down, and rents generally rise with inflation (roughly 3-4% a year). What the cashflow looks like now might not be what it looks like in 2–3 years. Just don’t overextend yourself, and keep that buffer fat but also don’t get too scared.
Anyway, back to Bill. The property he bought is growing at 7% per year. (That’s what Australia has achieved on average over the past 30 years)
Doesn’t sound wild? Give it time.
Compound growth is the 8th wonder of the world for a reason.
Five years in, that property’s worth over $700,000. By year ten? It’s pushing $1M.
Bill heads back to the bank, pulls out $150k in usable equity, and uses it to buy property number two, as soon as he can.
No saving. No side hustle. No skipping oat lattes. The property did the heavy lifting.
He repeats this. Over time, he’s up to four properties, all bought in growth areas, and all have doubled in value.
So now we’re at year 15.
Bill’s got a $4 million portfolio. It started at $2 million. He’s not mucking around anymore, it’s time to shift gears.
He sells the lot.
Pays the agents their slice. Clears the $1.6 million in debt. No dramas, that’s the bank’s cut sorted.
Then he cops the capital gains tax, yeah, it stings.
But thanks to the 50% capital gains tax discount for holding long-term, he only pays tax on half the profit. And even on the top marginal rate, once everything’s said and done...
Bill walks away with $1.87 million in clean, debt-free cash.
No loans. No tenants. No stress.
He rolls that into a commercial deal with a 6.5% net yield and now he’s pulling in over $120,000 a year in passive income that’s $2,300+ a week, no mortgage, no calls about leaky taps, no banks breathing down his neck.
Now, that’s not the $150,000+ we talk about in the Levelupproperty.com.au course, but hey, you’re not a member of that………yet!
All this from playing the long game.
That’s what happens when you build for momentum, not quick wins.
Investor B: The Yield Trap
Now here comes Ben🥀.
Ben also has $500,000, but he’s deep in the world of “Retire off positive cashflow straight away” videos. He wants a property that covers itself and pays him a cheeky little profit each week.
None of this “negative gearing” business, sounds scary.
So he buys a property with a 6% yield. It’s in a regional area that looks good on paper, but the growth drivers are….well, missing.
At first, he feels like a genius. Rent’s rolling in, expenses are almost covered. Happy days.
But fast forward five years... that property’s worth maybe $620,000. Not bad. But nowhere near enough equity to buy again.
And here’s where it hurts: to buy the next one, Ben has to start saving again.
Like, from scratch. Another $100k deposit. While the market keeps moving.
Meanwhile, Bill’s already on property three. Maybe four.
Ben’s not losing money, but he’s losing time. And in this game, time is where the real compounding happens.
He’s built a feel-good portfolio, not a scalable one. He’s got some income, but no momentum.
And while he was sitting back thinking he was playing it safe... prices went up.
Borrowing got harder. Deals got tighter. And now he’s stuck.
That’s the trap.
Chasing cashflow might feel good early, but without growth, it doesn’t get you anywhere.
Sponsored By The Level Up Property Course
Remember when Homer decided he was going to be an inventor?
He quit his job, bought a shed, chucked on a lab coat and somehow came up with a makeup shotgun, an electric hammer, and a chair with extra legs for tipping back.
And he was so sure he was onto something.
That’s exactly what the average property investor looks like when they dive into property investing. A lot of energy. A dream in their head. And absolutely no idea what they’re doing.
”What’s your forrrtss on Perth?”
The result are….
Painful. Chaotic. And expensive.
In the Property game, enthusiasm isn’t enough. You can’t wing it with a few YouTube videos and a podcast episode. That’s how people end up:
Spending months researching but getting nowhere
Skipping due diligence, because it sounds boring or complicated
Buying out of fear, just to say they’ve finally “done something”
Regretting it all, when the numbers don’t stack up and the growth stalls
Too many people are building portfolios that look great in theory, but in reality? It’s a shotgun blast of makeup to the face.
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Here’s what you get:
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This isn’t theory. These are tools that have helped 1 investor unlock up to $768,000 in equity in under 3 years.
So, if you’re ready to stop DIY-ing your way through one of the biggest financial decisions of your life, it’s time to level up.
The first 20 people get direct mentorship, so don’t sleep on it.
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*This newsletter is sponsored by our friends at Level Up Property Course.
“But What About Serviceability?” I Hear You Say
Good question, now you’re thinking about those 3 core components of property we spoke about at the start.
You’re becoming a smart property investor!
Because as we scale, this is the bit that trips people up. Let’s say you do have the equity. That $200k sitting in your first property, ready to go.
Sounds great, right?
Well, not if the bank won’t lend you the money.
And that’s where serviceability comes in.
The banks don’t just look at your equity. They look at your income, your debts, your dependants, and how your current properties are performing. And they’re brutal about it.
You could have the best growth property in the world, if your cashflow’s too tight, or your income can’t support another loan, you're dead in the water.
That’s why you need to balance the equation.
Early on? I like to prioritise growth, it gives you the equity to move. But as your portfolio expands and borrowing gets harder, that’s when cashflow starts to matter.
It helps you hold the portfolio. It protects your buffers. It gives you room to breathe.
But if you focus on yield too early, thinking it’s the safer bet, you're going to stall out before serviceability even becomes your problem.
Let’s address the fear that’s probably sitting in the back of your mind.
“What if I buy for growth and the growth doesn’t come?”
Look, fair. It’s a real risk. But it’s also a risk you can manage and one that’s massively reduced if you’re doing proper research.
Chasing growth isn’t about gambling on hot suburbs or hoping some TikTok expert got it right.
It’s about buying in markets with strong fundamentals:
Population growth
Tight housing supply
Job creation
Infrastructure spending
Government investment
If those things are in place, you’re not speculating. You’re investing in real, tangible demand. Growth might not explode overnight, but it will come over time.
And here's the other thing...
Even if the growth doesn’t come as fast as you'd hoped, at least you’ve bought in a place where your capital is protected. Because demand is stable. The tenant pool is strong. Vacancy is low. Also, consider adding value through renovation to force your equity.
Try getting that reassurance from a high-yield mining town when prices drop and the tenants disappear.
Can You Have Both?
Sometimes, yeah.
There are markets where you can still get 3.5–4.5% yields and good upside potential.
That’s the sweet spot, and we hunt those markets all day long.
But the glory days of 6% yield and $200k of growth in 18 months? They’re behind us. If you’re still trying to find those deals, you're not investing, you're chasing ghosts.
The game has changed. You’ve got to invest based on what’s real now, not what worked in 2020.
So What’s the Actual Strategy?
If I was just starting out, or sitting on my first property wondering what’s next, here's how I like to think of it:
Target growth first. Buy in a market with real fundamentals and decent upside.
Make sure the yield is enough so that you can hold the thing. You don’t need a unicorn, just enough cashflow to keep it stable.
Use the equity to go again. Pull it out. Reinvest. Repeat.
When borrowing tightens, that’s when I’ll look at higher-yielding properties. Not before.
Start my research around Trusts and what that story is, of course not financial advice but a worthy rabbit hole to dive into.
Where are we left then?
This isn’t a growth vs yield debate.
It’s not one or the other.
It’s about timing. And I don’t mean timing the market but timing your portfolio acquisition.
Yield is great, when you’ve already got a few under your belt and you’re protecting your serviceability. But if you start there? You’ll never even make it to phase two.
You’ll be stuck with a “safe” property that’s going nowhere.
This game is about building momentum. And momentum comes from equity.
So if you’re early in the journey, the goal is simple:
Build equity. Buy again. Keep moving.
Chasing yield alone might feel smart. It might feel safe. But it’s just another way of pressing pause on your progress.
And if you’ve ever tried to save your way to a $100k deposit while the market keeps moving? Why not have some little properties doing the growing so you can use their equity?
If you loved this newsletter, hit that share button and of course…..
Join the Level Up Property Course Now!
FREE Property Tool Of The Month!
The Money Smart Interest Calculator 💵, feels appropriate this month given we’re looking at capital growth vs cash flow. This provides a free and simple interactive tool to help Australians gain insights into the power of compounding!
It is a great and easy resource to navigate around what a difference in %’s of capital growth means for your investment taking a peek 🫣 under the covers of the real numbers.
It’s got a fairly easy-to-use interface and has a lot of insightful information to help you build that passive income Empire! Below ⬇️ I have dropped an example comparing 5% vs 8% capital growth over 10 years. Enjoy 🎉
That’s another Newsletter Wrapped up! Thanks for reading this Aus Property Investors Edition. Let us know your thoughts, share with friends & family to get the word out to the Property Crew! 🔥