With so much information floating around online, it’s no surprise that many first-time investors fall for property myths that can steer them off course. Social media, blogs, forums, and casual conversations all contribute to the confusion—and separating fact from fiction becomes increasingly difficult.
The problem? Believing in these myths can lead to poor decisions, financial losses, or even the collapse of your investment goals.
Research shows that 50% of first-time property investors sell within five years, and 90% never grow beyond owning one or two properties. But with the right mindset and knowledge, you can avoid becoming part of that statistic.
Let’s break down the most common property investing myths—and what the reality actually looks like.
Myth 1: Property Investing Is Only for the Rich
The truth is, property investing is accessible to everyday Australians. There are currently over 1.8 million property investors in the country, and most aren’t high-income earners.
Many get started by using equity in their existing home or a solid savings base. Some investors also use strategies like buying off-the-plan, where a small deposit secures a property at today’s price, with settlement occurring up to 18 months later—giving you time to organise finances.
The key isn’t wealth—it’s having a clear strategy and financial discipline.
Myth 2: Property Prices Always Go Up
It’s a comforting idea—but not always true. While property generally grows in value over the long term, not all areas and not all properties perform the same.
Property markets are cyclical, with peaks and downturns. Mining towns, for instance, can experience sharp rises and equally sharp drops when demand changes. Timing, location, and property selection matter more than the belief that “prices always rise.”
Myth 3: Buy Houses Because Land Holds the Value
While land is a valuable component, not all land is equal. Some areas have abundant land that isn’t in demand—so its value may remain stagnant or even decline.
The real driver of growth? Desirability and demand. You want to buy in areas where people want to live—places with strong infrastructure, jobs, population growth, and liveability.
“Get your Access to our Fully Customisable Investment Property Research and Analytics Tool Now!”
Myth 4: Cash Flow Is King
Positive cash flow is important—especially for managing repayments and holding costs—but capital growth is what builds long-term wealth.
A well-balanced strategy uses cash flow to support your portfolio, but focuses on areas with strong growth potential. The goal isn’t just short-term passive income, but asset appreciation that increases your net worth over time.
Looking for both growth and cash flow? Use tools like SuburbsFinder to identify suburbs that deliver both.
Myth 5: Only Invest Close to the CBD
While proximity to the CBD has its benefits, great investment opportunities exist well beyond inner-city areas.
To spot a high-performing suburb, look at indicators like:
- Population growth trends
- Infrastructure and transport upgrades
- Increasing median prices
- Strong rental demand and rising rents
- Wage growth
- Price gaps with neighbouring suburbs
Sometimes, the best opportunities are found in the growth corridors—not right next to a capital city’s centre.
Myth 6: New Builds Are Always Better Than Old Properties
New builds and off-the-plan properties offer benefits like depreciation and modern appeal. However, they also come with risks:
- Property market changes before settlement
- Developers pulling out of projects
- Unexpected changes in lending or personal finances
- Uncertainty around final build quality
Older properties, particularly in established locations with renovation potential, can offer greater flexibility and proven performance.
The right choice depends on your strategy, financial situation, and risk tolerance.
Check out “Crunching the Numbers: Positive Cash Flow vs. Negative Gearing“
Myth 7: Buying Below Market Value Guarantees a Profit
Buying under market value can be smart—but only if that “market value” is accurate and sustainable.
If you buy just before a market downturn (like at the tail end of a boom), your “discounted” price may still be too high. The value can fall further than what you paid.
In contrast, in a buyer’s market with low demand, you’re more likely to negotiate genuine discounts with better future upside.
Timing and context matter more than the discount itself.
“Get your Access to our Fully Customisable Investment Property Research and Analytics Tool Now!”
Myth 8: Only Buy Where You’re Familiar
It’s natural to want to invest where you live or know well—but familiarity doesn’t equal profitability.
Understanding local lifestyle perks is not the same as understanding market fundamentals. Instead of relying on personal bias, look at:
- Historical capital growth data
- Vacancy rates
- Rental yield
- Days on market
- Demographics
- Sales volume trends
Sometimes, the best opportunities are in unfamiliar suburbs. That’s where research tools and reliable data make all the difference.
Don’t Let Myths Derail Your Investment Goals
Many property investors fall short not because of lack of money, but because of bad assumptions and poor planning.
Avoiding these common myths can set you apart and give you a clear edge. The formula for success? It’s this:
Buy the right property, in the right location, at the right price, and at the right time.
Treat property investing like a business. Set long-term financial goals. Build a strategy. Do thorough research. And above all—invest with your head, not just your heart.
