93.5% of people do not own any investment property.

4.0% own one investment property.

1.49% own 2-4 investment properties and

Only 0.1% own 5 or more properties.

That last remarkable figure shows that only 1 in 1,000 people reach financial freedom through investment property.

Once you understand the mindset and strategy of the average investor, you will soon realise why.

The average investor will usually put down 20% as a deposit on a property. They decide to start investing in an investment property, which may take many years of saving. (we will assume 5 years in this example). In addition to the deposit, they will also require funds for stamp duty, which can be as high as 5% of the purchase price and also borrowing expenses (fees and charges, stamp duty on the mortgage).

The purchaser will usually pay market value for the property, then rent the property out and wait for capital growth to generate equity. Most investors are not aware of what drives capital growth and will usually select properties with average capital growth rates.

In the first year, the purchaser may only just break even, as the price of the property may only rise enough to cover the stamp duty on the purchase. It may even be 2 years before a property has increased in value enough to cover the costs of stamp duty and other settlement and borrowing costs.

In the third year, the purchaser finally starts to make some profit. The average investor has waited 7 years from the time of deciding to purchase an investment property to actually generating any profit!

In order to buy another property, the purchaser normally needs to generate another 20% equity. In a moderate growth area, this may take another 5 years or more. They will only be in a position to buy a second investment property 12 years after making their initial decision to invest.

In a large percentage of cases, the average investor will get dissatisfied with the returns on the property and not even get to the stage of considering a second property investment. Many will sell within the first 5 years and rejoin the ranks of 93.5% who own no investment property.