Buying in a SMSF does come with its own challenges as there are strict guidelines that must be adhered to, but none that we hadn’t come across before so we knew how to overcome this. Also, lending can be quite difficult these days as there’s only a couple of banks lending for SMSF’s, but we have a great network of mortgage brokers that can assist our clients with these types of purchases.
As this investment was going to be purchased with borrowings, it would exclude any property that would need major work such as a kitchen or bathroom renovation, removing a wall to create open plan living etc. Borrowed money could only be used for ‘repairs’ to the property and not for ‘improvements’ such as the ones mentioned above.
Working within our clients budget and their preferred areas, we were going to have to be very strategic with our property selections. As many of the properties that fell within their budget and areas were a little older, they would have needed quite a bit of work to make them presentable and appeal to renters so these properties were out of the question.
NEGOTIATIONS & ACQUISITION
After many, many hours of research in to different markets to find suitable areas and properties suitable for Brett & Julie’s strategy and goals, we knew that the north side of Brisbane would be perfect to achieve this. We have already helped many clients purchase and build in this region, so we knew the growth potential here and what factors would contribute to this in the long-term. We also knew which pockets of this region were ideal for investment to gain maximum returns and growth.
We shortlisted a few properties to present to Brett & Julie and had narrowed it down to a dual occupancy property in a prime location. Only minutes away from the new University which is due to open early 2020, with good transport links to Brisbane CBD by car & train and within close proximity to the newly extended commercial & industrial estate providing good jobs growth, this was the perfect investment. This was also in a family oriented area which means that Brett & Julie will be able to sell to emotional purchasers in the future, who will end up paying more.
The property also had existing tenants in place and we negotiated for one of them to sign a new lease prior to settlement as it was due to expire soon, ensuring our clients had excellent cash flow from day 1 with both units rented out.
The end result, a 2013 built dual occupancy property purchased for $560,000, returning a 6% yield and ready to take advantage of the capital growth to help Brett & Julie enjoy their retirement when the time comes.
If you’re looking to invest and want similar results, then please get in touch with us for a complimentary free chat.
* Their real names have not been used due to privacy.