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Why owning 2 investment properties can be better than owning 10

Ben Everingham, Pumped on Property

In 2011 when I started my property investment journey I thought success was measured by how many properties I owned.

After reading 0 – 130 Properties In 3.5 Years, 10 Properties In 10 Years and Confessions Of A Real Estate Millionaire I thought the more properties I owned the better off I would be…

Every message I was receiving from people in the property industry at the time (and still receive today) was about going big. About getting into massive debt and taking on huge risk and hoping the market would keep doing exactly what it had done in the past.

Also read: Are Aussie property prices about to bounce back?

Thankfully, today I now realise that living someone else’s dream will never make us happy.

My dream today is to have choices.

Also read: The $1.8m home measuring just 231cm wide

I would rather own two properties outright than hold 10 properties and be in a huge amount of debt.

I recently recorded a short video titled Why Owning 2 Investment Properties Can Be Better Than Owning 10.

Return on investment

This is something that I think a lot of investors in the marketplace don’t spend enough time on, and that is actually … I call it return on investment, but it really comes down to strategy.

For me, I had a goal when I was 24 years of age to replace my income by the time I was 30 through the investment properties that I own, or that I owned at that time. And so that was a goal that I’d burned into the back of my mind, and I thought I needed this huge amount of income to be able to walk away from my full-time job and explore what I wanted to really do with my life, which was help people buy investment properties, which I’ve been doing now for the last four years.

But for me, return on investment or strategy really comes down to what would enable you to have a comfortable lifestyle to cover all of the costs in your life and also live the lifestyle or the experiences that you want to live. And so you could own 10 properties outright, worth $2,000,000 that give you $2,000 per week in passive income or $100,000 per year, or you could simply own two houses with two granny flats that rent for a combined $2,000 per week, and again, you’re still getting your same $2,000 worth of income a week or $100,000 per year, but there’s considerably less stress associated with owning a couple of great properties outright as opposed to owning a huge number of properties and trying to manage that.

So when I was younger, I thought it was all about how many properties I owned, and how quickly I could grow my portfolio, and how much leverage I could use. But as I’ve had a family, and I’ve got more sophisticated, and my risk profile has dropped considerably with my age, it’s far, far, far more important for me to have a portfolio that is sustainable, that puts me in a position where I can sleep at night, that I feel comfortable about, where I’m still achieving the goals that I need to achieve in the short term and long term, and I’m still working towards that income that I’m looking for in the future. But if a GFC occurs, or a mid-cycle slow down occurs, or I lose the ability to earn income or something like that, or something happens to my health, then I’m not overextended and I’m not feeling sick and having to sell properties at the wrong times for a loss.

Risk and debt

A lot of investors don’t take risk and debt seriously enough, and that’s probably because, one, they don’t understand the history of the property market well enough. So in Australia we’ve had a ridiculous amount of positive price growth on average. Obviously there’s places down in South Australia, in Queensland, in Western Australia that have lost anywhere between 10 and 90% of their value in the last five years as the mining boom has re-corrected, but on average, in the places like Brisbane, Sydney, and Melbourne where the majority of Australians actually live and work, we haven’t really had a major downturn or recession in Australia in quite a while.

For a lot of us there’s no living memory of really, really hard times, but there is living memory in our parents, and that’s why a lot of them didn’t go out and become really successful investors, because they did remember when interest rates were really high, or they did remember those 10 year periods where property prices didn’t grow, or they do have a living memory of times where property prices can drop dramatically in value.

And so when you’re owning 10 properties, and prices drop by 10, or 20, or 50%, which they have in Australia in the past, in 1890, which a lot of people forget. Property prices, in a two year period in Australia, dropped by over 90%. And if you’re more interested in finding out more about risk, there’s a great book to read, which is called The Secret Like of Real Estate and Banking by an author called Phillip Anderson, who’s an Australian economist. And he talks about this cycle that has been occurring in America and Europe for the last 250 years, and it is fascinating reading because, as we all know, property cycles, but there’s a much bigger thing occurring in the background or that has been for the last 250 years. And if you can understand that information, you can understand when to take on risk, and when to take on more debt, and when to reduce your risk and reduce your debt.

So just keep that in the back of your mind, because sometimes buying 10 properties might feel great when everything’s going well and you’re earning income and interest rates are low, but what happens when times get a little bit tougher?

I spoke to a young guy recently, he’s 24, he’s just looking to get started. We had a one on one strategy session together, and he said that he’d learned a lot from his dad, who had bought six properties between 1998 and 2006, and then had to sell five of those properties in the GFC for a loss just to keep his head above water. So again, times do get tough, and you’ve got to remember that.

A big reason I think a lot of people want to own a huge amount of properties is around ego, and I think, for me, when I originally got started, if I’m being honest with myself, it really was a bit of an ego play. I wanted to own a lot of properties. I wanted to. I think about it now, it’s just so dumb, but I thought that owning a lot of properties would bring me happiness; that it would increase my confidence and that would make me feel good. But at the end of the day, buying more stuff isn’t the way to fix those things. Looking inside yourself, which is what I’ve learned, and becoming happy with who you are and where you are, and being grateful for what you have, is how I’ve found that personal inner peace.

But that stuff aside, a lot of investors like this idea of owning 10 properties, or a lot of the spruikers in the industry or other buyers, agents, in the industries have this elaborate strategies of owning 10 properties in 10 years. And, you know, the best selling book in Australian property history is 0 to 100-and-whatever Properties in 3.5 Years. So there’s this whole thing where more is better, but if we go back to part one, which was around return on investment and actually being in a safe position, I think for me, personally, where I’m at, that is far, far more important.


I speak to people all the time that are earning $60,000 or $80,000 per annum, and they’re sitting there in a strategy session with me telling me how they want to earn $200,000 a year through property investment within 5 or 10 years from today, and they’re starting from nothing.

And I say, “That’s cool, but why do you need that amount of money if you’re comfortably living on your $60,000 or $80,000 per year at the moment? And your costs right now are as high as they’re ever gonna be,” because they still own money on their own home or they’re still renting, where you can avoid those costs in the future by, obviously, owning your own home outright.

So I think getting very realistic about this stuff and not just pulling arbitrary numbers out of the air … I don’t know why I put my hand up to my mouth there … pulling arbitrary numbers out of the air and going, “I want $100,000 per year in passive income.” But do you really need $100,000 per year, or would you be happy with $50,000 per year passive income in 10 years from today, and then being able to quit your $100,000 job and go take a job for less pay that you love doing, or rescale yourself up into the industry you want to spend time in, or continue to work as a contractor in your industry maybe two or three days a week, and with the 50 grand you’re earning from your job and the 50 grand from your properties, be able to have that lifestyle that you want to lead today, as opposed to always looking into the future and hoping that things are gonna be better?

For me, the lifestyle that I’m looking for is really around time. I just want to spend time with the people that I care about, my family and my friends. I’m obsessed with travel, and that’s going to be a huge part of my future. I also want to be able to do what I’m doing now for as long as I possibly can, which is helping people get educated and buy great investment properties, and to start businesses that add value to other peoples’ lives. And I love my health, and I love my training and doing fun stuff. So, you know, for me, I don’t need a huge amount of money to be able to do that. I used to think I was working towards 500 grand or a million dollars per year in passive income, but the reality is, I can have an amazing lifestyle for significantly less than that. So it’s good to be pulled through by big numbers and big goals, but sometimes getting honest with yourself can make those goals a lot more realistic, and you can actually go and achieve them in a very short period of time.

So in terms of this concept of owning two properties, which can sometimes be better than 10, something a lot of investors don’t really talk about is the entry and exit, as well as holding costs associated with buying a property.

And a perfect example of this is a client of mine from New South Wales recently bought a four unit apartment block or unit block in a regional market in Australia. And at the time he thought that was a great buy, but the reality of making that purchase was he now has four tenants, he has strata, he has four sets of maintenance, he has four kitchens, four bathrooms, four properties that he needs to effectively look after, four sets of insurance, four sets of council rates. And for him, he thought he was getting an amazing cashflow deal, but the reality is, the ongoing holding costs associated with owning more properties is significantly higher. He’s also got to pay four sets of management, four sets of one week or two weeks worth of rent every time he finds a new person. He has to clean the property every time a tenant moves out, which in this complex is about once every 12 months.

So there’s all of these things associated with holding more properties, and so my personal strategy now is to own very high quality properties with great rental returns in good locations where I’m always gonna have strong demand for high quality, high income earning tenants. And I’d rather own one property, a house and a granny flat, that rents for 800 bucks or 1,000 bucks a week outright, than own four other properties that rent for 200 bucks each per week. And I’ve made my peace with that, and not everybody’s in that position to be able to do that, but I think as a long-term goal, sometimes less can be a lot more.

And same with the entry and exit costs. Again, people don’t really think about the compounding effect of these little costs, but if you’re paying legal fees on the way in and the way out, you’re obviously paying your contributions to the bank, you’re paying stamp duty on the way in, you’re paying capital gains tax on the way out, and all of the other costs associated with buying and selling property. They can compound dramatically over the course of a number of properties, even if you just think about the stamp duty costs or the soliciting costs of buying and selling properties. So think about that as well, because at some point in the future you’re gonna wanna sell some of your properties to either put yourself in a lower risk position, or to pay off other properties or your own home outright, and so thinking about the exit strategy’s always really important, too.


Again, a lot of people say they want to own 10 properties, but the likelihood of an Australian owning six properties, it’s probably more likely for the average Australian to go to the Olympics than it is for them to own more than six properties. And so, if you weren’t an olympian, you’re probably not gonna be an investor who’s at that Olympic or world’s best level either. So that’s not a stab, but that’s just saying let’s get real about this, and let’s get real about the actual numbers, and let’s get real about who buys what types of properties, and what they’re actually buying, and how many they end up owning over a lifetime.

If you look at the overall Australian population, 7.7% of Australians own one investment property. So if you already own an investment property, you’re in the top 7% of Australia’s overall population. Seventy-eight percent of investors own one property. So if we go to two properties, 18% of investors get to two. If we go to three properties, 5.5% of investors get to three. If we look at how many investors get to 6+ properties, we’re talking about less than 1% of investors and less than 0.065 of Australians. So if you’re at property six, you’ve done a hell of a job. But the reality is, if you’re just getting started and you have this big aspirational goal of 10, don’t beat yourself up if you don’t get there, because the odds are most Australians won’t go that far.

But, sometimes owning two great properties outright can be better than owning 10 properties and having a high amount of debt on those properties or owning 10 properties outright and having to do everything associated with that.


Ben Everingham runs a highly experienced buyers agents based in Queensland, which is registered with the REIQ. Over the last 8 years Ben has bought over $8 million dollars worth of investment property and now lives on the Sunshine Coast with his family. Ben and the team at Pumped On Property have supported their clients to buy over $130,000,000 worth of investment property over the last three years.