[Case Study] Restructure to Expand Portfolio (2 x Investment Properties) & Purchase Future Home | Property Twins™
[rev_slider ]
In: Property Investors0

Our clients, Sophie & Peter are a professional couple. They owned their home and an investment property. They wanted to expand the portfolio (and potentially purchase a future home that would be an investment property for the time being).

They had existing equity in both their home and investment property. They also had savings built up.

About Sophie & Peter: Couple in their late 30’s with one child. Sophie works in projects and Peter works as a consultant. Their combined family income is approx. $160,000.

Where they were and what they wanted to achieve:

Sophie & Peter wanted to take charge of their financial future. They wanted to buy an investment property that could be converted into their home in the future.

They wanted someone to show them how they could maximise the equity they can access and be able to buy this next property with tax effective set up and minimised risk.

Proposed Solution with a Tailored Plan:

  1. Maximise the equity they can extract from their existing investment property and their current home which can be put towards the next property
  2. Ensuring they get a better interest rate so the reverse compounding effect of paying off their home loan is expedited
  3. Analysis of various repayment types that will help Sophie & Peter so they prioritise paying off their home before an investment property (which will have tax benefits subject to their tax accountant’s advice)
  4. Strategise and mapping out the purchase of the 2nd investment property

Results: Sophie & Peter are set to purchase their second investment property

Home Equity Release approx.: $240,000

Investment Property 2 Purchase Price: $880,000 at 80% Loan to Value Ratio (LVR), renting for at least $470 per week

Total Property Ownership including Home: $2,080,000 million approx.

Growth Projection: If the properties owned grow by a conservative 5% per annum, Sophie & Peter will be adding on average $130k to their wealth per year, compounding year on year. In 9 years, this will be more than $1,000,000 in net assets due to the compounding affect.

Property doesn’t grow in a straight-line basis. Sophie & Peter’s portfolio may grow more in one year and less in another.

What’s Next for Sophie & Peter?

Property Twins team will continue monitoring the value of Sophie & Peter’s portfolio to see opportunities around equity release and further investment properties which are possible for them, given the planned set up of their existing properties.

Sophie & Peter already have a plan to purchase their 3rd investment property as well, as they save more and build equity in their home.

Sophie & Peter’s current home loan structure is strategically set up to allow them to pay off their home loan faster and maintaining tax effectiveness of their investment loans.

As you work through your own goals, dreams and aspirations, you can see that acquiring one and more investment properties is about having a ‘step by step’ strategy laid out to enable you to keep moving forward.

This is possible by having a ‘step by step’ plan tailored to your circumstances, established upfront by the Property Twins to enable you to keep moving forward.

If you are a first home buyer, upgrader, looking to refinance or to buy an investment property Book a Kickstart Call with the Property Twins Team
Join Our Exclusive Facebook Community: Property Addicts Australia

Note: Please ensure you always seek specific specific credit, tax, financial, legal or investment advice. Property Twins' Blogs are not a substitute for personal and specific, taxation, financial, legal or investment advice

Leave a Reply

Your email address will not be published. Required fields are marked *