Don’t Buy a House
| March 6, 2024

If you want to make a smart investment … just…don’t buy a house.

Dear Future Self-Made Millionaire….

Please don’t read this If you are thinking of buying a house as a profit-generating investment …

Just don’t… 


Do read this if you want to avoid one of the biggest financial mistakes you could make.

This blog is about one message.

If you want freedom, don’t buy a house…

I know what you’re probably thinking right now.

“What? You’ve lost your mind, Chris”

I can hear your objections loud and clear, so sit back and let me explain myself.

Here’s my reasoning…

I have over $8million in property… Impressive right? Maybe…but imagine for a moment having a property portfolio and sitting on the couch watching the interest rates go up.. and up..and up…. 

You’re now having to pay more and more and more each month…. Not only that, take into consideration the air conditioning suddenly breaking, garage doors needing replacing, general house maintenance, security systems, renters not paying, and council costs rising…. 

Are you still thinking that buying a house is a great investment?

I think buying a house is a terrible investment.

If you had asked me 15 years ago what my financial freedom plan was, I probably would have told you that buying a house and renting it out was a good idea…

I was wrong.

You can find a much better use for your money that will result in a far better outcome


Firstly, let’s define what we all really want

We all want financial freedom, right?

The elusive goal is to “retire rich and retire young” .. but what does that actually mean?

In my view financial freedom is…

The freedom to not have to work for money, where your life is completely paid for by your investments, so we are free to do what we want with our life.

Sound right to you?

It’s what most people want but they don’t actually have that, instead, they create something different.

How NOT to create financial freedom…

Most people think the way to do this is to get a high-paying job, save, and pay off a house.
Put some money into stocks, superannuation, or a government bond and wait until we are in our 60s to then stop working and live off our “nest egg’…

I don’t know about you but waiting that long seems… A WASTE OF TIME…

But still, many people have that as the goal.

Work hard, save a deposit, buy a house, and then pay it off…
It’s still what most of us think is the logical thing to do, right?

But let’s look at the reality of real estate

In Australia (and I am sure in other parts of the world) it takes years to save up to buy a house,

It takes 12 years in Australia to save for a house deposit … SEE HERE

And once you do, there are many downsides, including being a slave to what the government decides to do with interest rates (can you tell it really has me worked up) 

… Seriously, its crazy to think that once you get a mortgage there is someone sitting in a “government department” who can, with just a stroke of their pen, increase interest rates and make your life significantly worse

In the last few years, everyone with a mortgage has been powerless to the “powers at be” who have increased the interest rate and inflicted pain like some evil supervillain

In Australia, it is now on average $1200 more per month than in 2019 to pay for THE SAME HOUSE!!!

You don’t get anything more for this house, you didn’t get a choice, you just have no control….

If you still choose a house

So let’s say you still go ahead to buy the house.
You have 2 options, let’s explore both

If you buy a house to live in… here are some of the downsides

  • You have to stay in one place
  • You have rates, repairs, insurance and other expenses
  • You have to save huge deposits and are now a slave to whatever the government decides to do with the interest rates 
  • It’s not liquid, even if you make money it is hard to get that money out
    • Any money you take out is taxed like crazy

If you buy a house to rent out

  • You get a very low return on your money compared to other options
  • You have minimal rights as an owner compared to the tenant
  • You have rates, repairs, insurance and other expenses
  • You have to save huge deposits and are now a slave to whatever the government decides to do with the interest rates
  • It’s not liquid, even if you make money it is hard to get that money out
    • Any money you take out is taxed like crazy

Sooo… the big question…

What you should do with your money?

It’s simple and obvious.. You should buy a business (or start one) whilst still working your day job… A business by definition is a profitable enterprise that works without the owner’s input.

Here is a quick example of how much better it is than buying a house…

If you put $100k deposit into a $500k house, here is how it may look

The best case if you had $100,000 to invest in a property

Let’s say it can buy you a $500k house (20% deposit)…
If that house appreciates by an average 6%
And apply a current  interest of 6.5%
And we apply the average rental yield of around 5%
You would have to chip in 1.5% just to cover the interest … this would bring your expected return down to just 4.5% or $27,000

That is a 27% return on your original $100k …pretty good! 


There are two problems with this…

  • Firstly all the money will go to paying back the loan… 
  • And second, to get any of that money out and use it you will likely pay capital gains tax.

Also, just a side note…

There isn’t much you can do to change this unfortunate return….you can’t really make more money from the same house… you could try airbnb or holiday rental for slight improvements, but you would have to take into consideration the costs of furnishing the house first …. 

Or you could do expensive renovations or a subdivision (both require more cash)

Now on the other hand…

If you put that same $100k into buying a business… 

You would have a completely different financial return

Let’s say you put the same $100k into buying a $500k business (20% deposit)
Let’s consider a 10% interest on the business loan (you would likely do better)

The way you value a business is based on its profit, so usually for a business this size a multiple of 3x or 5x is applied on the profits. If we split the difference and assume a 4x multiple of profit. A business valued at $500k would have a “profit” (ebita) of $125k.
If you take the 10% interest off the loan ($400k x 10%) you would be left with an $85k profit

So you put in $100k and made out $85k in your first year…

85% return (before any tax savings)

You would still have the business you could sell for $500k and you would have your original deposit back in cash!

There are many ways you could reinvest that money or improve the business, but even without doing anything you are significantly better off (and you would have still kept your day job)

There are many businesses that fit this exact equation you could buy right now

Now, let’s say you wanted to start your own business and put the same money into it…

If you put that same $100k into starting a business, you could have 3 months of a great staff base for $30k a month.
If you chose a digital business you could start it from home and likely within 3 months be making enough money to pay the staff and take home profit yourself (especially if you follow what we teach)

I would recommend starting a business around a high-paying skill, this is something I have done many times and taught thousands…

Here are some ideas:

  • Sales
  • Digital Marketing
  • A.I
  • Book Writing
  • Content Creation

Within a year you would have a sellable asset that is making you money

If you have a business, you can easily make enough to live on and have staff run it for you.
You can rent a house wherever you want, and move with flexibility
You can give yourself a pay raise by increasing the profitability

Businesses do fail – but entrepreneurs don’t.
You will learn and grow

The idea that not everyone can be an entrepreneur is just ridiculous, there are more than enough examples of every “type” of person being successful as a business owner.

It just makes way too much sense…

So here is your plan moving forward (if you are smart)

Don’t buy a house, buy a business…

Rent the house you want to live in, have the landlord do all the repairs, and expenses…

 move out when you want something new…

Take the money you would have invested in a property and instead, buy or start a business which will give you a much better return on your money.

The best thing you can do is hone your skill in building businesses, make loads of money, and live wherever you choose to rent 🙂

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