Avoid these 5 mistakes when acquiring multiple properties

Planning portfolio growth before you know your borrowing ceiling

You cannot build a portfolio without knowing how many properties the lenders will support. Your borrowing capacity is not a fixed number. It shrinks with each new investment you add, because rental income is discounted and expenses compound. Lenders typically assess rental income at 75 to 80 per cent of the lease amount, then load it with a serviceability buffer. Every property you add reduces the income available to service the next loan.

Consider a midwife earning $95,000 who buys a unit returning $450 per week. The lender assesses 80 per cent of that rent, deducts interest at the product rate plus three percentage points, then adds costs like body corporate and council rates. After the first property, her residual income supports perhaps one more property at the same price point. Without restructuring or additional income, a third becomes difficult. Knowing this ceiling in advance allows you to choose properties that fit within it, rather than overcommitting early and losing the ability to expand.

Choosing interest-only terms without accounting for principal reversion

An interest-only period defers principal repayments for up to five years, which lowers the monthly cost and preserves serviceability for the next purchase. The mistake occurs when you assume that serviceability test will remain the same when the loan reverts to principal and interest. It will not. Lenders assess the full principal and interest repayment from day one, even if you elect an interest-only term. That assessment does not change, but your cashflow does.

When the interest-only period ends, your repayment increases because you are now paying down the loan balance over the remaining term. If you hold three properties and all revert to principal and interest within the same 12-month window, your monthly outgoings can jump by several thousand dollars. Portfolio investors who rely on interest only loans for nurses to maintain serviceability need a plan for reversion, whether that involves refinancing to extend the interest-only term, increasing rent, or paying down other debt to offset the rise.

Treating rental income as guaranteed when lenders do not

Vacancy is factored into every serviceability calculation, but many buyers underestimate how much it affects their ability to borrow again. Lenders do not assess your portfolio income at 100 per cent occupancy. They apply a discount for vacancy and management, which varies by postcode and property type. In areas with higher vacancy rates, that discount can reach 25 per cent, meaning only 75 per cent of the advertised rent is counted as income.

If you base your purchase decisions on gross rental yield without adjusting for the lender's treatment, you will overestimate your borrowing power. A midwife with two properties generating a combined $1,100 per week might assume she has $880 per week in assessable income after an 80 per cent haircut. If the lender applies an additional margin for vacancy or uses a lower rental figure from a valuation, that income drops further, and the loan amount she qualifies for shrinks accordingly. Ask your broker to run the serviceability calculation using the lender's actual treatment of rent, not the lease amount.

Relying on negative gearing for properties purchased after mid-2026

Negative gearing rules changed for residential investment properties acquired on or after 7:30pm AEST on 12 May 2026. If you bought after that date and time, rental losses on established dwellings can no longer be offset against your midwifery income. Those losses are quarantined and can only be used against future rental income or capital gains from residential property. The change takes effect from 1 July 2027, but it applies to acquisitions made from May onward.

This matters for midwives building a portfolio because the tax benefit that previously subsidised a negatively geared property no longer exists in the same form. If you were relying on a $12,000 annual loss to reduce your taxable income and generate a $4,000 refund, that refund disappears from next financial year. Your after-tax position deteriorates unless the property is cashflow neutral or positive. Eligible new builds are exempt from the quarantine, which makes them more appealing for investors who want to preserve the deduction. If your strategy depends on offsetting losses, acquire properties before 30 June 2027 that were under contract before 12 May 2026, or focus on new builds that meet the definition under the legislation.

Adding properties without releasing equity from the one before it

Buying multiple properties in sequence without accessing capital growth from earlier purchases leaves you dependent on savings for every deposit. That approach works for one or two properties, but it stalls quickly. Equity release loans for nurses allow you to convert the increased value of an existing property into a deposit for the next, without selling or refinancing the original loan unless required.

In a scenario like this, a midwife buys a unit that appreciates from $500,000 to $580,000 over three years. She can access up to 80 per cent of the new value, which gives her approximately $464,000 in available borrowing against that property. After repaying the original loan balance, she has released enough equity to fund the deposit and costs on a second property. Without this step, she would need to save another full deposit while servicing the first loan, which delays the next purchase by years. Portfolio growth relies on leverage, and leverage requires using equity as it accrues, not waiting until the mortgage is paid off.

Failing to separate investor and owner-occupier debt before you apply

Lenders apply a debt-to-income cap separately to investor loans and owner-occupied loans from 1 February 2026. Each bank can fund up to 20 per cent of new investor loans at a DTI of six times income or greater, and the same for owner-occupier loans, but the caps are calculated independently. If you have both types of debt on your file, the way you structure them determines whether you remain within the cap or exceed it.

A midwife with an owner-occupied home loan of $400,000 and an investment loan of $300,000 has total debt of $700,000. If her income is $95,000, her DTI is 7.37 times, which exceeds the threshold. Whether she can access another investment loan depends on whether the lender has capacity within its 20 per cent allocation and how the debt is split across portfolios. Refinancing to move investment debt to a lender with available capacity, or paying down the higher-risk loan, can bring you back within range. Ignoring the cap until you apply wastes time and narrows your options. Plan the structure before you need the next loan, not during the application.

Growing a property portfolio requires forward planning, not just access to finance. If you are a midwife looking to acquire multiple properties and want to structure your loans to support that growth, call one of our team or book an appointment at a time that works for you.

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