·S4 E36

Rental Yield Won’t Boost Your Borrowing Power

February 3

25 mins

Episode Description

In this episode of The Property Nerds, we break down one of the most common investor assumptions: that chasing a higher rental yield will meaningfully boost your borrowing capacity.

Plus, we unpack a timely SMSF lending update that could change how some investors think about leverage and diversification: 90% LVR options without risk fees, and what that may mean in practice.

If you’ve been filtering suburbs based on yield, this episode is your reset.We cover:

1. Why yield obsession usually shows up too late and why it rarely moves borrowing capacity the way people think

2. How a 0.5% yield increase can equal only a modest borrowing bump once banks shade rent and apply DTI limits

3. The bigger levers that actually scale portfolios: income, strategy, savings rate, and lending options

4. What’s changing with higher LVRs and no risk fees, and why it matters for liquidity and diversification inside the fundTimestamps:

00:00 – “If you’re stressing about yield… it’s probably too late”

01:10 – Rental yield impact on borrowing capacity: the big misconception

03:17 – Why a higher yield feels logical

06:01 – The hidden cost: fewer markets, longer search time, missed upside

07:48 – “Cash flow isn’t king”

10:00 – Why higher prices often mean lower yields

11:01 – Fixed costs don’t scale like prices

16:30 – Why negative cash flow is more normal now

18:41 – Growth vs cash flow framing

21:05 – 90% LVR options and what’s changed

22:16 – Why that’s a meaningful difference

24:00 – Stop chasing yield, start building strategically

If you’ve been telling yourself “I just need a higher yield first,” this episode will help you zoom out, run the real numbers and focus on the variables that actually move the needle, without delaying your next purchase for the wrong reason.

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