We Reviewed 200 Properties and Found the Two Types That Grew Fastest

I had my mind blown last Tuesday.

I'm not exaggerating. I pulled our entire team into a room and we went through 200 properties we've bought across Melbourne over the past few years. Every single one. Purchase price, current valuation, renovation spend, rental yield. The full picture.

We were looking for patterns. Which properties outperformed? Which ones just tracked the market? And which ones — if we're being honest — underdelivered?

About a dozen properties in the batch showed annual growth above 15%. In a Melbourne market that has been, let's be frank, pretty average for the last couple of years. You tell someone your property grew 15% in this market and their first reaction is to call you a liar.

But the data doesn't lie. We've got the bank valuations, the comparable sales, the desktop assessments. These numbers are real.

So we dug deeper. What did these top performers have in common? And the answer was so counterintuitive that I sat there staring at the whiteboard for a good minute before it sank in.

They were almost all weatherboard houses. And a surprising number of them were near cemeteries.

The weatherboard effect: why ugly wins

Let me be upfront. I don't like weatherboard houses. Personally, I don't. I own one — exactly one — out of my entire portfolio. And until this review, I sort of wished I didn't.

But here's the thing. That one weatherboard property? Best performer in my personal portfolio. By a mile.

When we laid out the data across our team's 200 transactions, the same pattern appeared. About 80% of the top-growth properties were weatherboard construction 1.

Why? Three reasons, and they all connect to the same principle.

First, nobody wants them. Not the vendor. Not the agent. Not the buyer. The vendor knows their weatherboard is the "ugly kid" on the street. They've lived next to a brick place that sold for $780,000 and they've already mentally accepted that theirs is worth less. Their expectation is lower before negotiations even start.

The selling agent knows it too. They've handled enough sales to understand that weatherboard properties attract fewer buyers, generate less competition, and take longer to sell. So they don't pour their best marketing effort into the listing. They save that energy for the brick veneer down the road that will sell itself at auction.

And the buyer pool is genuinely smaller. Most Australians — and I'll generalise here — prefer brick. It looks more substantial. It feels more permanent. Weatherboard has a reputation (partly deserved, partly not) for higher maintenance, potential termite issues, and a dated aesthetic 2.

So you've got a motivated seller with low expectations, a disinterested agent, and thin competition at auction. What happens? The property sells cheap. Relative to the land underneath it, you're getting the dirt at close to its raw value because the building above it isn't adding a premium.

And this is the second reason. The land-to-building value ratio on a weatherboard property approaches 100%. When the empty block next door sells for $700,000, and you buy the weatherboard house on a comparable block for $710,000, you're essentially paying $10,000 for the building. The other $700,000 is pure land value.

Compare that to a renovated brick house on the same street selling for $850,000. Same land, but $150,000 of your purchase price is tied up in a building that depreciates every year. Your land ratio is closer to 82%. Over ten years, your $710,000 weatherboard will outgrow the $850,000 brick house because 99% of your capital is sitting in the appreciating asset — the dirt — rather than the depreciating one — the structure 3.

The third reason is simpler. Weatherboard houses are easy and cheap to renovate. You can reclad, repaint, even extend a weatherboard home for a fraction of what the same work costs on a double-brick property. Our reno team can do a cosmetic refresh on a weatherboard place for $10,000 to $15,000 that adds $30,000 to $50,000 in perceived value. Try doing that on a double-brick house — you'll spend three times as much and the structural limitations will drive you mad.

The cemetery factor: misunderstood and mispriced

I know. I know how this sounds. "Joey's telling me to buy a house next to a graveyard." Stay with me.

Of our dozen-plus top performers, roughly 20% were within 300 metres of a cemetery. Again, not by design. We didn't set out to buy near cemeteries. We set out to buy properties with the best land value ratios and the least buyer competition. And cemeteries, it turns out, create exactly those conditions.

The psychology is universal. And I say this from experience. I had a white Australian mate who lived across from a cemetery. He told me he was scared to walk his dog at night because of the gravestones across the road. This isn't a cultural thing. Nobody — not Chinese buyers, not Indian buyers, not Anglo buyers — actually wants to live next to a cemetery 4.

So what happens to a nice, solid house on a big block that happens to face a cemetery?

The vendor's expectations drop. They bought it knowing the cemetery was there, probably got it at a discount themselves, and they've mentally accepted a lower exit price. The agent knows the cemetery factor will thin the buyer pool, so again — less energy, less marketing, lower effort.

At auction, fewer bidders register. The property might even pass in, which opens the door for a post-auction negotiation where you can often secure a price $20,000 to $30,000 below reserve.

But here's what people miss. A cemetery doesn't affect development potential. The zoning doesn't change because there's a cemetery across the road. The council doesn't restrict your building permits. You can still add a granny flat, subdivide, or renovate exactly the same way you would on any other block. The stigma is purely emotional, and emotional stigma creates pricing inefficiencies that data-driven investors can exploit 5.

And crucially, cemeteries don't expand. They don't get noisier. They don't build apartment towers. They don't create traffic. A cemetery is, in some ways, a permanent green space buffer. Once you reframe it that way — as a park you never have to maintain — the "discount" starts to look less like a compromise and more like a market error in your favour.

I'm not saying every cemetery-adjacent property is a winner. The same due diligence applies. Check the block size, check the soil, check the planning overlays, check the easements. But if all the fundamentals stack up and the only negative is proximity to a cemetery, you're probably looking at a property priced 5% to 10% below comparable houses one street back — with identical growth potential once you hold for three to five years 6.

What this means for your next purchase

I'm not telling you to go out and exclusively buy weatherboard houses next to graveyards. That would be a weird strategy, and you'd run out of stock pretty quickly.

What I am telling you is this: the properties that grow fastest are the ones that other buyers avoid for emotional reasons rather than fundamental ones.

A weatherboard house on a 600-square-metre block in Melbourne's southeast, where the vacant land next door is worth $700,000, is not a bad property. It's an underpriced property. The building is cosmetically unappealing, sure. But the land — the only thing that actually appreciates — is identical to the brick house two doors down that sold for $150,000 more.

Our team now actively looks for these pricing gaps. When we see a weatherboard property with a land-to-value ratio above 95%, we flag it immediately. When we see a good-quality house with a cemetery, a power substation, or any other stigma factor that doesn't affect the physical asset, we flag that too.

We bought a place in Boronia — weatherboard, not particularly pretty — for $660,000. Four weeks later, the bank valued it at $890,000. That's a 34% paper gain. It was an off-market deal where the vendor was motivated and the property didn't attract mainstream buyers precisely because of the building type 7.

Another one in Cranbourne. Purchased for $590,000. Spent $60,000 on internal modification. Two months later, the bank valued it at $630,000. Gross rental yield above 6.4% — all because we bought what other people didn't want and turned it into what renters needed 8.

The lesson from reviewing 200 properties isn't complicated. Don't buy what's pretty. Buy what's cheap relative to the dirt it sits on. Then make it pretty yourself for $10,000 to $15,000. The gap between purchase price and true land value — that's where the real money is.

And if there's a cemetery across the street? Mate, that's just a neighbour who'll never complain about noise.