I Got Scammed On My First Property. Now I Buy Them For a Living.

One scam, one realisation, one belief that cost me five years and the three lessons underneath all of it.

My first ever property purchase was a “scam”. And the embarrassing part is that I should have seen it coming, because at the time I was a qualified structural engineer who not only designed structures (which involves a lot of number crunching and excel spreadsheets) but I also project managed and put tenders together which involves planning and forecasting to determine if a project is worth it for the company – not that different to how you analyse property success.

Today my husband and I hold a portfolio that has grown by more than $400,000 in the last two years, and I buy investment properties for other people through my company Investor Haus Pty Ltd. The distance between those two sentences is made up of three lessons. They cost me real money to learn. They’ll cost you nothing to borrow.

The free advocate and the paddock

I put off investing for years, then finally decided I was ready. I did what most first-time investors do, I looked for help. I found a buyers advocate who was, wait for it, free. Completely free to me. That should have been red flag number 1.

What did the free advocate recommend? A new build, out in an undeveloped area, surrounded by empty paddocks which was nowhere near the established suburbs I could have bought into for the same. However, I only knew this after I had already bought the land – details in lesson 2.

Here’s what I didn’t understand at the time. Free advocates aren’t free. They’re paid by developers, in commission, to move stock. Not only that, but they are also paid by the boutique builders that they promote, the property managers, the sales agents, basically anyone that they refer to you. The person I thought was working for me was working for the other side of the transaction the entire time with their fee invisible to me because it was baked into the price I paid. I got lucky: I saw where it was heading, sold the land, and actually made a small profit. But luck is not a strategy, and I have never forgotten how professional, how polished, and how free the whole trap looked.

Lesson 1. Free advice is the most expensive advice you’ll ever take. Nobody in this industry works for nothing if you can’t see who’s paying your advisor, you’re the product. Before you take advice from anyone, including me, ask one question: who pays this person, and what do they need me to do for them to get paid?

Old properties in better locations outperform new properties in undeveloped ones EVERY TIME.

I didn’t know any better and hearing how after just 5 of these types of properties in 8 years will get me close to $1million in profit, I was sold. But when I started researching recent sales of properties in well-established areas that had shopping centres, public transport and schools (the most critical infrastructure for a good investment property) I realised that the dream he was selling me most likely wouldn’t become a reality.

The $600,000 that he was quoting me for the property blew up overnight to $800,000. This was due to his recommendation of using a boutique builder (not required for an investment property in woop woop). Not to mentioned the fact that he sold me land within a noise corridor which required double glazed windows which adds to the cost and decreases tenant appeal.

Seeing how this blow out of budget I started researching other commercial builders which brought my costs down to the $600,000’s (which only reinforces my first lesson). Even with the lower cost, this new build wasn’t sitting well with me. After a quick search on realestate.com, I found that the neighbouring, established properties on double the size land, were selling for the $600,000’s for the same rental return! This left me pondering, why would someone (my tenant) want to live further away from all amenities and in a smaller house?

What I know now..

Knowing what I know now, I note that the new build didn’t provide any opportunities to increase the value of the property outside of how the market moves. With older properties on bigger land, you can increase the value of the property from the purchase price without waiting on the market. You can:

• Renovate it cosmetically – fresh paint and new flooring can add $80,0o0 of value provided the condition of the property was bad enough when you purchased it

• Subdivide the land and sell – with big enough land you could divide the land (speak to a town planner about this) and sell that lot with or without a unit on it.

• Subdivide the land and hold – similar to the above but this time you keep the unit and rent it out for profit (your choice between the two options is based on capital)

• Granny unit in the backyard for rental income – no need for formal subdivision but still recommend speaking to a town planner to confirm this is an option for the land

Lesson 2. Buy the numbers, not the glamour. The new property may look more appealing, but land and value-add opportunities are what’s really going to boost your portfolio. If a property only grows from market influence, you are missing out on huge equity making opportunities.

 

The belief that cost me five years

This is the part of my story I think will resonate with more people than the “scam” does. For years I believed property investing was something you did for your children. You sacrifice, you go without, and one day your kids inherit the result and I wasn’t even sure I wanted children. What I wanted was to travel. So, in my head the choice was binary: live my life now or lock my money away for a future I wasn’t sure I wanted. I chose travel, and I delayed investing for years because of it.

I have been a structural engineer for a decade now. Good income, disciplined saver. I had every capacity to invest earlier. What I had wrong wasn’t capacity, it was the belief. Because the choice was never travel or invest. I’ve since done both at the same time, and if I’d understood what the right property actually costs to hold, I’d have started five years sooner. Properties don’t care whether you’re at your desk or on the other side of the world. They grow anyway.

If you’re delaying investing right now because you think it means giving up the life you actually want, that belief is costing you more than you know.

The conversation that changed the why

Five years ago I moved from Melbourne to the Gold Coast, and that move changed everything, partly the place but mostly me as a person. I met my now husband here, and investing stopped being an abstract question about an uncertain future and became a concrete conversation about a future we both wanted.

We asked the question most couples never say out loud: what do we actually want from life? The answer was clear. We don’t want to work until sixty-five. We want options, the option to work because we choose to, the option to travel without asking permission, the option to say no. Every property decision since has flowed from that destination, not from a hot-suburb tip or a tax perk.

And a decade of engineering had taught me the thing that finally clicked into place: my salary alone was never going to get us there. Sure we are on good salaries and can save but saving to a portfolio will only leave you behind. Property prices are growing faster than our incomes so being out-priced before you have saved enough for a deposit is a high probability. Equity is the key to a winning portfolio.

Where that’s landed us

Today we hold two investment properties that have grown by more than $400,000 in value over two years. Sit with that number for a second. As an employee, what pay rise would I have needed to save that after tax, after living costs? It isn’t a pay rise. It’s a fantasy. For most people there is simply no salary version of that outcome.

And we’re not done. Right now, we’re living inside our own renovation with all the dust, plastic on the windows (looking like a drug den), the lot. But it is all part of our plan, manufacturing equity in our own home to fund the next purchase. Because that’s the other thing nobody tells you: investors don’t wait to feel rich to make the next move. They build the next deposit out of the last decision.

Lesson 3. Your income buys your assets, but your assets build your wealth. A bigger salary is how you get into the market it is not the vehicle. The right property, in the right location, bought at the right time, will out-earn your job.

 

Why I’m telling you all this

I’m now a buyer’s agent — yes, the same job title as the person who tried to scam me. That’s exactly why I do it the way I do: a flat fee, paid by you and only you, no developer commissions, no kickbacks, ever. I became the advocate I needed in 2021.

But you don’t need to hire me to get value from my story. It took one scam, one mediocre apartment, ten years of engineering, one very good conversation, and $400,000 of growth to learn those three lessons. You just got them in a five-minute read. If you do this yourself with them in hand, I count that as a win.

Next time someone offers you free property advice (and they will) don’t ask whether they’re nice, or qualified, or confident. Ask who pays them. Ask what their portfolio and looks like. Follow the money. It will tell you everything their advice won’t.

Vanessa Dallas is the founder of Investor Haus, a buyer’s advocacy for time-poor investors, and host of The Intrepid Investor Podcast. If this was useful, the first-time investor’s guide is free at www.investorhaus.com.au/firsttimeinvestorsguide. This guide walks you through the buying process, provides you with the ultimate due-diligence checklist you need for every phase of the property purchasing process and a feasibility spreadsheet to really understand your numbers.