Brief: Prepare for retirement - Aged 45 to 55
Currently have their own home valued at approximately $1M and want to build a portfolio to give them approximately $1M by the age of 60 to 65 to retire comfortably.
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Our strategy is to purchase 5 to 7 properties over the next 10 years;
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Year 1. Purchase 1st property in the inner suburbs close to CBD in a gentrifying suburb. Ideally property should have development potential for future subdivision.
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Year 3. Purchase 2nd Investment property in a high yielding suburb where rental yields are quite high, vacancy rates are low and similarly to investment 1, the suburb is undervalued and ready to see strong capital growth.
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Year 5. Purchase 3 rd Investment property in metropolitan area again with future development potential.
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Year 6. Purchase 4th Investment property in a high yielding suburb where rental yields are quite high, vacancy rates are low, the suburb is undervalued and ready to see strong capital growth.
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Year 7. Property 5 Develop property no. 1 add second dwelling to existing dwelling or redevelopment of 3 units.
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Year 8. Property 6 Develop property no. 3 creating a secondary property on your existing land.
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Year 9. Purchase 7th Investment property in a high yielding suburb where rental yields are quite high, vacancy rates are low, the suburb is undervalued and ready to see strong capital growth.
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Year 10. We have accumulated 7 properties by balancing our portfolio, to include;
Properties in metropolitan suburbs that will increase in value faster and have development potential. Properties in other states or regions that have higher rental yields that increase our income to allow us to keep on borrowing money to buy sooner. Developments of 2 of our existing properties adding another 2 properties to our portfolio, utilizing the capital gains of our properties to continue to fund our new purchases meaning. By the end of year 10 our total portfolio value will be approximately $7.4 Million. Our debt will be approximately $4.6 Million & that will leave us with a gross capital appreciation of $2.8 Million. Our rental income would be approximately $300,000 pa & our annual interest payments on our loans would be approximately $225,000 based on an average bank interest rate of 5%.
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Each strategy is different and bespoke to a clients wants and needs. You too can achieve financial freedom through realestate by working with us at AusInvesta, your partners in property growth & protection.