home owner-new investor

"We're paying off the house, but super won't be enough to live on. It's time we looked at property investment."

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You already own a home or you are paying it off, and you have some equity in it. You have been thinking that you want a certain income and quality of life in retirement, and that time is approaching fast. What you have in super and investments won't be enough. You know you need to consider doing something else or you will be short. You feel comfortable with an investment property as a way of helping you achieve your goals.

Dean & Sally’s Story

Dean & Sally had just paid off their mortgage. Their house had more than doubled in value since they bought it 14 years ago. Dean’s younger brother had been with DPN for the past 12 years and had accumulated 4 investment properties. Dean realized that his brother was not involved in a get-rich-quick scheme, but had rather established a sensible and sustainable strategy over the years. He decided he should look into doing the same.

Dean is a high school principal and Ruth is a corporate accountant. Their household income is over $200,000 a year with no real tax benefits, and they have a combined superannuation savings of over $500,000. They want to retire in 15 years time on $80,000 a year ($1500 a week), which is about 40% of their current income. They would need just over $3,000,000 in super, investments etc. to be able to draw $2,300 a week, which would be equivalent to today's $1500.

Even with $500,000 in super, they would have to accumulate another $2,500,000 over the next 15 years in growth and additional savings to achieve their goal (just over $160,000 per year). They realized that simply relying on employer super contributions and saving cash in the bank was not a smart way of doing it. The longer they wait, the harder it would get.

dpn’s solution

Dean & Sally used DPN’s Property Accumulation Analysis to find they could comfortably purchase three investment properties immediately that would only cost them $700 a month or $8,400 a year after tax. They could see that the growth they would receive on the three properties far outweighed the interest they would earn on that $8,400 if left in a bank account.

They also received about $30,000 in a tax refund that helped fund their property portfolio. They set up a Self Managed Super Fund (SMSF) and each rolled over their superannuation accounts. They were able to buy two more investment properties with less than 50% debt. The rent, combined with their employers' 9% super contributions, comfortably paid for the properties and even reduced the loans in super. Working with DPN and their accountant, they refined their strategy further, salary sacrificing another $10,000 each into super to rapidly pay off the properties since the maximum capital gains tax in the superannuation phase is 10% and in pension phase is nil.

Without affecting their quality of life and only having to divert $700 a month of their cash flow toward a property investment portfolio instead of their bank account, Dean and Sally now have over $2,000,000 in property, rapidly helping them toward their retirement target in 15 years.

what dpn can do for you

If you've paid off your home or are in the process of doing so and have some equity in the house, and you're aware that superannuation is not enough to maintain your quality of life in retirement, then give DPN a call on 1300 713 318 or fill in the contact form below. We'll show you how to accelerate your savings, working smarter and not just harder by investing your tax and making your money and super work harder for you.