When it comes to investing in property everyone’s goals and drivers are different. However, the values are similar – security, control, life, living life on your own terms…
When Jane and Leo reached out to us, they owned their home in South Sydney and an investment property in Eastern Suburbs. They also had $60k in cash savings
About Jane & Leo: Couple in early 30’s with no children. Jane is a sales manager and Leo is an IT professional. Their family income was $245,000.
Where they were and what they wanted to achieve:
Jane & Leo wanted to build an investment property portfolio to have more control, choice in life and provide a better life to their future family. They want to give back to the community and also travel overseas to see their family, whenever and travel the world. They want something to fall back on in the future.
The biggest challenge for Jane & Leo was knowing how to continue investment property journey. They became accidental property investors when their first home became an investment property.
They didn’t understand investment set up worked and how they could smartly leverage their assets to propel them with greater wealth creation for themselves. They wanted to know what they could and couldn’t do, and have someone show them step by step what they wanted was achievable. They also wanted help with implementing this step by step plan to accumulate investment properties.
Proposed Solution with a Tailored Plan:
1. Correct structuring of their existing home and investment property set up (this re-structure will enable them to save $125,000 on their home loan over the life of the loan so they can pay it off much sooner and maximise the tax benefits)
2. Maximise equity release from their investment property to fund future investment property deposits and buffers
3. Strategy to put their savings to investment purposes with the correct set up so they can SAVE on tax
3. Recommendations on repayment types suited to their properties – based on what will help Jane & Leo pay off their home sooner
4. Modelling of scenarios comparing of purchasing THREE quality properties versus ONE blue chip property
5. Maximise cash flow, tax benefits and flexibility to pay off the home quicker
6. Mapping out their plan for them to acquire investment property 2, 3 and beyond
Results: Jane and Leo are set up to purchase their 2 properties in the near future, followed by a 3rd by saving further
Investment Equity Release: $134,000
Investment Property 2 and 3: House in a high growth QLD suburb with development potential
Purchase Price for Investment Property 2 & 3 (approx.): $400,000 at 90% Loan to Value Ratio (LVR) including Lenders Mortgage Insurance (LMI)
Funds Used Up: $134,000 approx. ($60,000 savings can be used towards the next investment property or as risk buffer)
Total Property Ownership including Home: $2.5 million approx.
Growth Projection: If the properties owned grow by a conservative 5% per annum, Jane & Leo will be adding $125k to their wealth every year, compounding year on year. In 10 years, this will be more than $4 million in gross assets ($1.575mill in net assets). At the same time Jane & Leo’s property rental income will increase overtime.
Property doesn’t grow in a straight-line basis. Jane & Leo’s portfolio may grow more in one year and less in another.
When Jane & Leo purchase their 3rd investment property using the equity from their home, they will be adding another compounding growth assets.If you are a first home buyer, upgrader, looking to refinance or to buy an investment property Book a Finance Kickstart Call with the Property Twins Team
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