Client Case Study

Purpose

Our client was just starting out and needed some help to make her inheritance count. Our client wanted to achieve financial independence and build a substantial property portfolio over time.

Situation

Our Discovery Session revealed that Kathryn received an investment inheritance of $150,000. It’s always sad when we hear that our clients have lost a family member, and we often find that our clients don’t want to waste the golden opportunity to get a leg up in life. But having the money sitting in a bank account can be dangerous. We have seen it happen all too often that people’s lifestyles absorb the money and before they know it, it evaporates into thin air. Sure, flying first class on an all-expense paid world trip has its allure but building lasting wealth can mean retiring several years earlier than one’s peers. If the money is blown, all that is left is a fading memory of their loved one and that sinking feeling – “if only I did something meaningful with that money”. Kathryn knew she didn’t want to fall into this camp, she wanted to honour her passed loved one who gave her this opportunity to get ahead in life. The feedback that we have heard from our investor clients is that a smart investment property is the best way to invest an inheritance.

Strategy

As part of our investment process, we sat down with our client in a Strategy Session and show her how it was possible to look beyond the only property market she had ever known – Sydney. We showed our client what the numbers would look like with a ‘Rentvesting’ strategy. We explained how her equity could grow quickly by choosing the right property, in the right location at the right time in the cycle. The plan was to achieve as much capital growth in the shortest amount of time, which would ultimately give Kathryn more options down the road.

Solution

We presented three Traditional Property Solutions including two House and Land Packages and a completed Townhouse, all at different price points. Our client decided to go with the completed Townhouse option for $432,500. The location was undergoing tremendous capital growth and rental demand was outstripping supply. 

Outcome

Our recent Annual Review has revealed that Kathryn’s property has increased in value to circa $600,000, and a new rental appraisal shows that $600 p/w rent is very achievable. This equates to about a 39% increase in capital value over two years. Based on Kathryn’s original acquisition price, her new rental yield is now about 7.20% pa. Our client is now considering refinancing to access this lazy equity to obtain another investment property. Kathryn is well and truly on her way to building a significant property portfolio and honouring her passed loved one.