For most property investors, their focus is mostly centred on the obvious: location, yields, capital growth and financing. Those things matter. Yet there is one strategic element that separates those who build five, ten or more properties from those who stop at one or two and blame the bank. That element is the order in which you buy. The sequence you follow, the market cycle you choose, and the purpose of each purchase determine whether each asset becomes a stepping stone or a dead end.
Let’s explore why purchasing order matters more than almost any single decision you will make as an investor, and how a deliberate buying sequence accelerates scale and reduces the risk of being stalled at property one.
Property investment is not just buying properties, it is unlocking your next property
Too many new investors treat each acquisition as an end in itself. The smarter approach treats each purchase as a means to an end. Buy with intention and you create equity, serviceability and cash flow that unlock the next opportunity. A single property bought in the right way can be a launchpad; the same property bought without strategy can trap equity and restrict borrowing capacity.
When investors buy to buy the next property, they consider how the asset will perform across three dimensions: short-term cash flow, medium-term equity growth, and lender serviceability tests. If your first property is chosen only because it is inexpensive, or because you love the suburb, you may end up with a high-maintenance asset and weak serviceability. That can stop your portfolio before it starts.
The arithmetic of sequence: how the right order compounds into scale
Think of property purchasing as a progression. The right order looks like this: 1 → 2 → 5 → 10. The wrong order looks like this: 1, then stall, then blame the bank. The difference between those two paths is not luck, it is preparation and design.
A deliberately planned first property is often different from a final portfolio cornerstone. For example, a first property can be structured to maximise lender recognition of rental or to qualify for owner-occupier benefits that strengthen borrowing power. The second acquisition uses the equity, tax position and improved serviceability from the first. By the time an investor reaches properties three to five, they have established structures, tax clarity and lender history. Those things make lenders more comfortable and can lead to faster approvals and better loan terms. The momentum generated by one well-structured purchase snowballs into more deals over time.
This is not theoretical. Investor behaviour in Australia shows a concentration at low counts, with most investors holding just one investment property. Recent data shows around 71 percent of investors hold only one investment property, and nearly 90 percent own one or two properties. That concentration explains why so few reach five or more properties. The order matters because most investors do not design their first and second purchases to optimise onward borrowing and tax efficiency.
Market timing, cycle awareness and buying order
Buying order must align with the market cycle. Real estate is cyclical. Prices, yields and borrowing conditions vary across phases. The investor who purchases in the right stage of the cycle for their strategy will face lower cost of entry and better growth potential. The investor who buys out of sync risks poor cash flow and stalled equity growth.
A practical example is the “buy-to-buy-the-next” formula used by our founder Bharat. He looks for purchases that will be easier to refinance or to extract equity from, while still offering acceptable rental coverage. Timing the purchase to a phase when lenders are active and prices are sensible improves the chance the property becomes a stepping stone rather than a bottleneck. In markets where new investor loans rose sharply over recent quarters, access to credit has been more available, making the sequencing opportunity real for disciplined buyers. ABS data shows that the number and value of new investor loan commitments rose notably in recent quarters, reflecting increased investor activity. That trend creates windows where a well-ordered plan pays off.
Practical principles for constructing the optimal purchasing order
Here are pragmatic rules I advise investors to follow. These are actionable and repeatable.
1. Clarify the end goal – Is the plan cash flow positive holdings, or is it accelerated capital growth to sell into larger purchases? Your end game determines whether your first properties prioritise yield, tax efficiency or capital growth.
2. Buy with exit options in mind– A property bought with clear refinance pathways, or with strong rental demand, is easier to convert into equity. Avoid properties that are illiquid unless you are deliberately holding long term.
3. Use structure to your advantage– Ownership structure, tax positioning and documented rental strategies influence lender assessments. The right structure at purchase time reduces friction for subsequent borrowing.
4. Sequence by lender perception– The first two properties are incredibly important, because they establish lending behaviour patterns. Avoid one-off purchases that look risky to lenders.
5. Keep documented performance– Lenders respond to history. Demonstrated rental stability and low arrears make it easier to get the next loan approved.
6. Reinvest equity strategically– Equity extraction should be tied to the next purchase plan, not to discretionary spending. Extracted equity is the currency of growth.
Case study concept: a founder’s secret formula in practice
Our founder Bharat uses a simple secret formula: buy a property to buy the next property, in the right order, at the right time, in the right market cycle. That means the first purchase may intentionally be a property that offers cleaner rental coverage or a short-term refurbishment plan to add value quickly. The second purchase then uses improved serviceability and either equity release or higher rental to move up the ladder. This disciplined sequencing avoids the common trap where investors find themselves unable to secure the second loan and then blame external factors, such as banks or market conditions, rather than their own plan.
This approach is supported by macro patterns in the Australian market. Median dwelling values and market sizes have been moving materially over recent years. For example, Australia’s median dwelling value has risen significantly in the past five years, which emphasises the value of timing and order in building wealth through property. When the market momentum and lending windows align, disciplined sequenced buyers capture disproportionate benefits.
Why many investors stop at one or two properties
Behavioural reasons account for much of the failure to scale. Fear, poor planning and misaligned purchases create friction. The most common scenario is emotional buying. An investor purchases a property they love rather than one that fits into a scaling plan. This often leads to higher maintenance, unexpected costs and reduced borrowing capacity.
Another common cause is misunderstanding bank serviceability rules. Lenders assess each borrower’s total exposure, and an unfavourable first loan can close doors. That is why the order matters. A strategically chosen first and second asset can create a favourable profile which lenders interpret as lower risk.
Finally, market timing without a plan can derail growth. Buying during the top of a short-term cycle for sentiment reasons can freeze equity and postpone the next purchase for years.
Strategize the order before you buy the first property
If you want to go from one to ten properties, think of purchases as moves on a chessboard. Each move should enable the next. Buying in the right order is the single most powerful lever you can control. It is not magic. It is planning, discipline and an understanding of market cycles and lender behaviour.
Australia’s lending and price data show that opportunities to scale exist, but they are won by those who plan a sequence, not by those who react to adverts and emotions. Start with the end in mind. Choose your first property to unlock the second. Choose your second to accelerate to five. If you get the order right, you may surprise yourself by how quickly the portfolio compounds. If you get the order wrong, you will likely stop at one or two and wonder where it all went wrong.
For anyone serious about building a multi-property portfolio, my single piece of advice is this: buy the first property as if it must buy the next one. That shift in mindset changes everything.
