Commercial beats resi—and Scott’s got the math

Scott O’Neill doesn’t need a hype reel. Founder of Rethink Investing and owner of a commercial property portfolio now north of $150 million, O’Neill has built his wealth not through speculation, but through spreadsheets—and thousands of leases most investors wouldn’t bother reading. Speaking on Unemployable Media’s podcast Unemployable Youth, he lays out, in his usual blunt style, why residential property is no longer stacking up, how commercial assets changed his life, and what most investors are still getting completely wrong.

“There’s a huge political risk in the next 10 years for Australia that no one is accounting for,” says O’Neill, founder of Rethink Investing. “When the voter base shifts from wanting to buy property to knowing they’re going to be forever tenants… they’re going to vote tenant-friendly policies in.” He points to Victoria’s creeping land taxes and rent controls as canaries in the coal mine. “It’s already happening.”

O’Neill isn’t just sounding the alarm for the sake of it. He’s earned the right to be heard. A decade ago, he started with $60,000—money saved working multiple jobs while still at uni—and now oversees a commercial property portfolio worth over $150 million. Along the way, his firm has guided more than 3,000 investors to secure over $5.75 billion in commercial assets.

His journey began, like most, in residential property. “My first purchase was just after the GFC—a house with a granny flat in Sydney. Nothing spectacular.” But it wasn’t the house that changed his life. It was what followed. By 2015, O’Neill had shifted into commercial—buying a $700,000 property in Perth with two tenants: a deli and a fish and chip shop. “That one deal replaced my income,” he says. “We went travelling in Europe for six months after that.”

What’s striking about O’Neill’s rise is how little of it has been left to luck. “I didn’t have a mentor,” he says. “I just saw others doing it—read the old property magazines—and thought: extrapolate that over 10 years and I’m there.” What gave him confidence wasn’t just the stories. It was the maths. “Even back then, I was putting 60 hours a week into my job and five into property. Property made more. That’s when it became a no-brainer.”

For most Australians, commercial real estate still sits in the too-hard basket. O’Neill doesn’t deny that it’s more complex than residential. “If you get commercial wrong, you’re going to get screwed,” he says. “Six-month vacancies, bad tenants, unexpected costs… it’s a different beast.” But for those willing to do the work, the rewards can be disproportionate.

That work includes the kind of due diligence that most investors gloss over. “We’ve got a 100-point checklist,” he says. “You don’t just look at the building. You call the tenant. Ask if there’s a succession plan. Look into their competitors. Look at the lease—are there caps on rent increases? Can they walk away? If the lease doesn’t stack up, the deal doesn’t.”

Why go to such lengths? Because the edge is shrinking. O’Neill says the gap between residential and commercial yields is narrowing fast, forcing new entrants to pay more for the same risk. “We’re already seeing people bring residential logic into commercial. It’s dangerous. A 6% yield going to 5%—that’s a 20% price difference. You’ve just wiped out five years of growth.”

He’s blunt about where he sees most first-time investors going wrong. “Buying 20 houses in low socio-economic areas and expecting to retire? Flawed strategy. Negative cash flow and low capital growth won’t take you far.” The smarter path, he says, starts with a single residential property—freehold, with land—followed by a shift into commercial. “Start residential. Learn the ropes. But don’t stay there too long. Commercial is where scalability begins.”

Part of that scalability, he notes, comes from understanding leverage. “If you’ve bought well and the rent goes up, you create equity. That equity becomes your deposit for the next deal.” He’s candid about using strategies like strata-titling and lease stock loans—where banks lend against the lease income itself, not your personal income. “Most people don’t even know those options exist.”

His own company, Rethink Investing, now reviews thousands of deals every month, buying around 50 properties for clients each month. “We buy about 65% of our deals off-market,” he says. “It’s not rocket science. It’s access. We’ve been doing this a decade. That’s how agents come to us first.”

As for where the smart money is flowing now, he doesn’t hesitate: “Retail. Suburban retail, in particular. Under-supplied. One million more people in the country, but hardly any new builds. Everyone’s still spooked from COVID, but your local supermarket, pharmacy, café—they’re not going anywhere.”

The numbers support him. Industrial land in Melbourne has grown 281% over the last decade. Sydney’s close behind. “That’s 28% per annum,” O’Neill says. “It’s beaten every residential market in the country.”

Still, he’s measured about expectations. “The last 40 years of property growth were fuelled by interest rates dropping from 20% to near zero. That tailwind’s gone. We might be entering a secular rising interest rate cycle.” The result, he says, is that 7–8% annual growth will become 4–6%. “You’ve got to be more strategic.”

His final piece of advice isn’t about timing or market cycles. It’s about the work. “People forget what it takes to get started. I was doing hundreds of letterbox drops, cold-calling, crunching spreadsheets at midnight.” That, he says, is the real blueprint. “Vanity metrics don’t build portfolios. Deals do.”