A Shocking Real Estate Truth 65% of Investors Are in Negative Cash Flow!

You must have probably heard it once in your life “Property always pays off in the long run.”

But what you didn’t hear is that it all comes with the right knowledge of the market and research, which takes decades of experience.

With the same mindset, one of our clients is Sarah, a Melbourne-based investor who bought her first rental property in 2021. According to her research, she considered it a “HOTSPOT.” But fast-forward to 2024; to manage the property, she is now paying $450 every month just to keep it out of financial trouble.

Between rising interest rates and minimal rent increases, the numbers simply don’t stack up. Sarah isn’t alone.

According to the 2024 PIPA Annual Investor Sentiment Survey, a  65% of property investors across Australia are in negative cash flow meaning their rental income doesn’t cover mortgage repayments and other holding costs.

That’s up from 57% in 2023. The financial pressure is climbing and investors are feeling the financial pressure.

PIPA chair Nicola McDougall says the data debunks the common belief that investors are raking it in from soaring rents.

“While rents have risen, they’re a drop in the ocean compared to higher lending costs,” she explains.

In fact, the survey found

• 67% of investors with one property are in negative cash flow
  
• 72% of those with two properties are also struggling
  
• 66% with three properties are no exception
  

And most investors don’t expect relief anytime soon, with nearly 60% of single-property investors expecting to stay in the red for at least five more years.

It’s not just spreadsheet stress, either.

For many, this means skipping holidays, tapping into savings, or stretching their day jobs just to cover the gap.

Another investor, James from Brisbane, shared, “My rent’s gone up $30 a week in two years.

But my mortgage repayments? They’ve gone up $500 a month. It’s a losing game right now.”

As the federal election campaign gains momentum, PIPA urges policymakers to take these figures seriously. Behind every percentage point is someone like Sarah or James trying to build wealth but finding themselves stuck in a cycle of financial strain.

Don’t Be the Next “Sarah” or “James”
It’s important to remember that it’s not just about doing all the research on your own or being distracted by flashy headlines and polished arguments.

Before diving into the real estate market, it’s a calculated move to connect with a professional buyer’s agent.BECAUSE

When you work with a buyer agent, it’s not just about spending money; it’s about gaining peace of mind knowing your investment is in trustworthy hands.

You’ll have the chance to learn from them, share your preferences, and outline your goals. With their guidance, you can steer your investment journey in the right direction while also picking up valuable knowledge about the real estate field and how to plan your next steps.

If the percentage number triggers you, it might be time to rethink your strategy and connect with a reliable buyer agent.