Читать книгу Buy Now - Lloyd Edge - Страница 33

One client's story — of how while on maternity leave with her second child she took the reins of the family's financial planning — stands out for me.

Jane had a successful career, having worked her way up over 10 years in the corporate sector. She and her husband had been considering buying an investment property for a while and had been saving for a deposit for at least two years. But her savings were accumulating very slowly, on a low interest rate, and didn't reflect how hard she had worked and saved.

Frustrated, she knew she needed to find a way for her money to ‘work smarter’ for her. When she took maternity leave, with a newborn and a toddler to care for, Jane began to reflect on where she wanted her family to be financially in five, 10, even 20 years' time — and that was in a place of assured financial security.

But buying an investment property can be hard. Jane did some research on where to buy and what they could afford. She soon realised that budget limitations meant she'd have to purchase in another state. She wanted to ensure she did it right first time and didn't fall for any sales tactics or traps.

With a new baby, of course it was going to be difficult to do property inspections, especially for an investment property that wasn't close to where the family lived. So Jane employed Aus Property Professionals, and we helped her throughout the process.

Jane came to us with a budget of $450 000. I did a lot of the research and due diligence to ensure she bought in an area that was primed for growth. We chose one of the outer-ring suburbs of Brisbane for Jane's purchase. This was based on the planned infrastructure, which would fuel jobs growth in the area, and the population growth forecast for the suburb.

It was difficult to find properties in such a good area of a capital city that would be affordable, given Jane's budget. I searched both on and off market for something suitable. I considered but dismissed more than 10 properties, either because they were over budget or because they weren't ‘investment-grade’ properties. (I discuss what makes an investment-grade property in chapter 10.)

I finally sourced a newly built property with an asking price of $450 000, right on budget. As it was a new property, Jane would get maximum depreciation for tax purposes. I managed to negotiate a great price — $425 000, which was $25 000 under the asking price and below Jane's budget limit. This meant her rental yield was much higher than it would have been had we bought at the asking price, so she achieved better cashflow right away.

I ensured that the contracts were signed on the most favourable terms for her, including a ‘subject to building and pest inspection’ clause and a 60-day (rather than a 35-day) settlement period.

An excellent valuation of $540 000 just 12 months later demonstrated that we'd bought this property at the right time in the cycle, when the markets were beginning a growth phase.

Jane is now on the right path to building a positively geared property portfolio that will give her the freedom to make financial choices, such as working part-time so she can spend more time with her children, sending them to private schools and taking the family on an annual holiday.