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Had an existing Off the Plan that isn’t quite working!


The first Client Story I want to share with you is from Brendan Vaughan, our Qualified Property Investment Advisor, and he had a lovely young couple, sort of early 30s, Melbourne based couple.

They are a professional young couple who are currently renting in the inner Northern area of Melbourne. They love the area that much they obviously want to stay in that area. Now the challenge for them, and this story is really about validation; it’s about validating that right pathway for them in terms of how they’ll move forward. How does this come about? The reality was they’d actually bought an investment property already, and it was an Off the Plan purchase. Now by buying it off the plan purchase, it has done two things for them. It’s now limited their ability to actually buy their owner-occupied home in the area that they want to live, but secondly the property itself wasn’t necessarily a quality asset.

When you get a situation like this, it’s very difficult, when you have to make a tough decision of realising a potential loss, or knowing that a property is not going to perform like it did. A lot of people don’t like to pull that bandage off. What they did is, they came into see Brendan to have that conversation, and building the confidence about what is the right move for them. What was the wash-up of all of that? Their dreams were these, I really did want that family home in that inner Northern area, so that was going to be a purchase of over $1 million, is that was their big rock in the jar. Also, they’re going to be starting a family soon as well. But they had this conundrum around, do they start investing now, which they’d started doing, but did they have to revert back to what their ultimate goal was.

We went through that with them, and Brendan did a great job of studying the numbers, looking at the cashflows, and the conclusion was this… we were going to sell that investment property.

So we could focus on making sure we had enough borrowing power to allow us to buy that big rock in the jar, being that family home. We then wanted to start on having our first child and building out our family, and the confidence around understanding that those were the things that we needed to do, were really important to this young professional couple. We did that. Then we started to build out the portfolio plan. We’re going to buy a series of three investments property, over the course of time, not rushing into anything.

Get the big rock in the jar first, sell that property, big rock in the jar, get that family home, start having the family and then when the cashflows allow, sensible investing in the property.

It’s not always about investing straight away. This couple used the property plan as a means to which they could plan out their future lifestyle, and the sorts of dream that they’re trying to do.

So round’s out, three great properties, target of $80,000 passive income by the age of 60, couple of kids, living in the area that they want to live in, it’s a good news story. So for me, this one’s about that valuation, that reassurance. Just making sure that they were doing the right things, because these are tough decisions, selling a property, potentially realising the loss, they are challenging. So they sought professional advice, they looked at the numbers, and they made an informed decision. So great story for Brendan and certainly for that young couple here at Melbourne, who are looking to succeed in life.



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