Two-thirds of Property Investors Are Experiencing Negative Cash Flow – What Does This Really Mean?

There’s been a lot of noise lately suggesting that property investors are raking it in thanks to soaring rents.

But when you look past the headlines and dig into the data, a very different picture emerges.

According to the 2024 PIPA Annual Investor Sentiment Survey, nearly two-thirds (65%) of property investors are currently experiencing negative cash flow

This is a substantial jump from 57% in 2023.

And let’s be clear, this isn’t a one-off blip.

Many of these investors expect the situation to continue for years to come.

What the data tells us

Here’s how it breaks down:

• 67% of investors who own one property are in negative cash flow

• 72% of those with two properties are feeling the squeeze

• 66% of those with three properties are in the same boat with negative cash flow

And it’s not just a temporary setback.

A significant portion of investors believe they’ll be stuck with negative cash flow for five years or more, with some forecasting 10 to 20 years before they break even.

This isn’t surprising when you consider the environment we’re in.

Yes, rents have risen but they haven’t kept up with interest rates and skyrocketing holding costs like insurance, rates, land tax, etc.

Why this matters

Despite the narrative in some corners that investors are cashing in on the rental crisis, this data highlights a harsh truth: many investors are dipping into their own pockets just to keep their heads above water.

PIPA Chair Nicola McDougall rightly pointed out that this is not an ideal scenario.

In fact, over 40% of investors surveyed said their cash flows were “tight”, and another 11% were already dipping into savings to cover the shortfall.

And what’s driving investors to the edge?

• Interest rates remain stubbornly high

• Insurance, council rates, and maintenance costs have surged

• Depreciation benefits and tax offsets can only do so much when you’re topping up the mortgage every month.

The bigger picture

Here’s something worth remembering: 71% of property investors only own one property.

Another 18% own just two.

These investors aren’t property moguls. They’re everyday Australians trying to secure their financial future and take pressure off the pension system.

Yet these same investors are often demonised in the media or targeted with ill-conceived policies like changes to negative gearing or additional land taxes.

And that’s the danger.

When governments or commentators suggest further penalising this group, it could have a ripple effect on rental supply because many investors are already on the brink of selling up.

In fact, 57% of those considering selling say it’s due to rising holding costs.

What should investors do?

At Metropole, we’ve always said property investment is a long-term game, but it must be strategic.

Negative gearing can be a valid short-term tactic if it’s part of a well-thought-out wealth creation plan, especially when investing in high-growth locations.

But it’s not a sustainable strategy on its own.

Here are three things smart investors should be doing right now:

1. Review and renegotiate loans – Don’t just accept the bank’s default rate. Many investors are sitting on variable loans with interest rates that are 0.5% to 1% higher than necessary.

2. Reassess portfolio performance – Not every property in your portfolio will be a winner. Consider whether it’s time to rebalance—especially if you’re carrying underperforming assets.

3. Get professional advice – Now more than ever, investors need clarity, strategy, and support. This is not the time for DIY property investment.

Final thoughts

The latest PIPA findings should serve as a wake-up call not just for investors, but for policymakers too.

We’re in a period of recalibration. Investors are adapting to a new reality where holding costs outpace rental growth.

But as always, those with a clear plan, realistic expectations, and access to the right advice will not only weather this storm but come out stronger on the other side.

After all, property investment has never been about getting rich quickly, it’s about building long-term, sustainable wealth.

About Aska Soo
Aska is a passionate and driven professional with many years of experience as a property consultant helping clients achieve their financial goals through property acquisition. She has consulted clients around Australia by reviewing, educating, and advising clients about their financial situation and what they need to achieve their end goal of being financially free.