Luke and Naomi are in their 30’s and only just purchased their first home a few years ago. When we met with them they hadn’t even considered getting an investment property because they felt that it just wouldn’t be affordable for them yet.
What worked in their favour was the fact that even though they’d only been in their home for few years, the value of the home had increased enough to give them the equity they need to start looking at other options, so we prepared a strategy for them to give them an understanding of what could be achievable.
Their initial thought process was similar to a lot of other people who believe that it’s better to pay down the mortgage first before looking at adding anything else, however when we prepared their financial strategy it became very clear to them that as long as everything is properly structured, adding the right property is actually going to pay their home off in less than half the time, while also saving them thousands of dollars a year in tax.
With Luke and Naomi’s circumstances, they still had 27 years left to pay on their mortgage, and with our strategy we showed them that, without changing their lifestyle, they could completely clear the mortgage in 11.5 years, and the interest they would save is a staggering $215,000. Add onto this that the property would be saving them $7,768 a year in tax, which is a lot of money that they can now use to go towards their own wealth creation instead if giving it to the government.
One of the main concerns that Luke and Naomi had was that they thought it just wouldn’t be affordable to add another property yet, however our strategy showed them that they could achieve all of this, and the property will be running at $42.00 a week CASH FLOW POSITIVE after all expenses. This means the rent & tax are more than enough to cover any costs associated with this property.
They have now taken the first step to building a portfolio for their future and are looking forward to being able to continue to add more over the years.