Our clients, Jane & Boyd are hardworking Australians. They came to us recently. They owned their home, owning just their home in Sydney with an intention to buy a couple of investment properties. Once purchased, they will be set up to add $1 million in assets which have the potential to grow to $1.1 million net wealth across their home and investment properties in the next 9 years!
About Jane & Boyd: Couple in mid-30’s with two children. Jane is a school teacher and Boyd is an IT professional. Their combined family income is approx. $180,000.
Where they were and what they wanted to achieve:
Jane & Boyd wanted to take charge of their financial future. Ideally Jane would be able to cut down on work hours and stay home with the family and both of them will not work beyond the retirement age.
They have been thinking about investing for a very long time and life circumstances and a young family never allowed them to really take the plunge. Given the time passed, they wanted to take active steps to build wealth for their family. This would provide them with more control and a better future for their children.
They wanted someone by their side so they can confidently build their investment portfolio, step by step.
Proposed Solution with a Tailored Plan:
- Restructuring their existing home loan so they are able to tap into the equity & extend the borrowing capacity by consolidating some personal loans. The focus was on a lender that gives them the flexibility to invest further and also provide them with the opportunity to pay it off sooner
- Analysis of various repayment types that will help Jane & Boyd leap from just their home to multiple properties
- Maximise equity released to fund deposits for future properties
- Strategise and mapping out purchase of the 1st investment property & 2nd
- Plan for structuring the purchase of 3rd investment property, as Jane & Boyd build up their savings and equity
Results: Jane & Boyd in a matter of months will be able to purchase at least 2 investment properties
Home Equity Release approx.: $300,000
Investment Property 1 Purchase Price: $500,000 at 80% Loan to Value Ratio (LVR), renting for at least $450 per week
Investment Property 2 Purchase Price: $500,000 at 80% Loan to Value Ratio (LVR), renting for at least $450 per week
Total Property Ownership including Home: $2.2 million approx.
Growth Projection: If the properties owned grow by a conservative 5% per annum, Jane & Boyd will be adding on average $100k to their wealth per year, compounding year on year. In 9 years, this will be more than $1.1 million in net assets due to the compounding affect.
Property doesn’t grow in a straight-line basis. Jane & Boyd’s portfolio may grow more in one year and less in another.
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