When it comes to building wealth through property, the decisions you make today shape your financial future. Recently, a TMAP student faced a common question: Should I buy one property or two? While the answer might seem simple at first, the details reveal why the strategy you choose matters. Let’s break it down.

Scenario 1: Buying One Property with Your Super

The student was considering using their self-managed super fund (SMSF) to purchase an NDIS property. Here’s what the situation looked like:

  • Financial Position:
    • $160,570 in their SMSF
    • $80,000 in cash outside of super
  • Plan:
    • Transfer the $80,000 into their SMSF
    • Use the combined funds to buy an NDIS property worth over $900,000

This approach had its perks. The property could pay itself off within a year due to its strong returns. However, the student would need to commit nearly all their available funds—both inside and outside super—to make this happen. While the potential returns were attractive, this strategy locked their money into super, limiting their flexibility.

Scenario 2: Buying Two Properties with a Balanced Approach

The second option was to purchase two properties by splitting their resources:

  • Inside Super:
    • Use the SMSF’s borrowing capacity to acquire a $480,000 property
    • Leave around $65,000–$70,000 in the SMSF after purchasing
  • Outside Super:
    • Invest $30,000 of the $80,000 cash into an option deal in Austral
    • Keep $50,000 accessible for other opportunities

By spreading their funds, the student could buy two properties without exhausting their cash reserves. This approach left room for future investments and ensured their finances remained adaptable.

Why Flexibility Beats Locking It All Away

While the idea of dropping all your cash into super might seem tempting, it’s worth considering the trade-offs. A self-managed super fund offers the advantage of using funds already in super to grow your portfolio. Adding external cash limits its accessibility, as super funds are typically locked until retirement.

By pursuing the two-property strategy first, the student could maintain financial freedom while still building their portfolio. Once their investments in the $480,000 property and Austral option deal grew in value, they could revisit the NDIS property idea with a stronger financial position.

Avoiding the Biggest Wealth Trap

One of the most common mistakes investors make is going all in too early. Pouring every dollar into one high-cost property—like a dream home—might feel like progress but often becomes a financial anchor.

Here’s what happens:

  • Borrowing capacity gets maxed out
  • Cash flow becomes tight
  • Future opportunities are missed

Instead, a measured approach—like the two-property strategy—keeps the door open for further investments. It’s about keeping momentum, not hitting a financial wall.

Climbing the Mountain, One Step at a Time

Wealth building is a journey, not a sprint. By focusing on smaller, strategic steps, you set yourself up for sustainable growth. Start with what’s manageable, like the two-property approach, and build from there. When the time is right, bigger opportunities—like an NDIS property—will naturally fit into your plan.

The road to the top is all about balance, patience, and keeping an eye on your long-term goals.

Ready to take your first step? TMAP is here to guide you.