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 Kate and Cameron reached out to us, they just owned their home in South West Sydney.
About Kate & Cameron: Couple in early 30’s with two children. Kate is a marketing manager and Cameron is a supply chain manager. Their family income was $167,000.
Where they were and what they wanted to achieve:
Kate & Cameron wanted to build an investment property portfolio to have more control, choice in life and provide a better future to their children.
The biggest challenge for Kate & Cameron was knowing where to start on their investment property journey and how it all worked. 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 loan
2. Maximise equity release from their home to fund future investment property deposits and buffers
3. Recommendations on repayment types suited to their properties – based on what will help Kate & Cameron pay off their home sooner
4. Modelling of scenarios comparing of purchasing TWO cheaper properties versus ONE expensive 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 1, 2 and beyond
Results: In less than 6 months, Kate & Cameron went from just owning their home to purchasing their first investment property
Home Equity Release: $132,000
Investment Property 1:House in a high growth QLD suburb with development potential
Purchase Price: $345,000 at 90% Loan to Value Ratio (LVR) including Lenders Mortgage Insurance (LMI)
Funds Used Up: $70,000 approx. ($62,000 Funds remaining can be used towards the next investment property)
Total Property Ownership including Home: $1 million approx.
Growth Projection: If the properties owned grow by a conservative 5% per annum, Kate & Cameron will be adding $50k to their wealth every year, compounding year on year. In 8 years, this will be more than $472,000 in net assets. At the same time Kate & Cameron’s property rental income will increase overtime.
Property doesn’t grow in a straight-line basis. Kate & Cameron’s portfolio may grow more in one year and less in another.
When Kate & Cameron purchase their 2nd investment property using the equity from their home, they will be adding another compounding growth assets.
What’s Next Kate & Cameron?
Property Twins team will continue monitoring the value of Kate & Cameron’s portfolio to see opportunities around equity release, savings and purchase of further investment properties.
As you work through your own goals, dreams and aspirations, you can see that starting with your first investment property is possible for you. At the same time, you can have the potential to go beyond the first property whenever you are ready.
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.
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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
