Background
Family of 3, Travis working full time and Bex working part-time, had invested in a couple of land banks in their portfolio and have made significant gains. However, with the rise in interest rates in 2023 and no longer being able to deduct the interest rate expense, they began questioning their investment strategy and needed guidance.
Solution
Travis booked a free strategy session with us to explore alternative options for their portfolio. During the session, we introduced them to the concept of building a more balanced portfolio to mitigate the impact of interest rate changes. Despite having cash reserves to weather the interest rate rise, we proposed adding a block of units to their portfolio to further enhance its performance. Travis felt he really need to expand his knowledge, so he joined our Property Formula Workshop as well.
Outcome
Travis and Bex decided to proceed with our recommendation and acquired a block of units at a cost of $598,000 which included all healthy homes cost and finders fee. This property generated a remarkable rental income of $1,100 per week from social housing, resulting in an impressive yield of 9.55%. To optimise their overall portfolio, we strategically shifted the debt from the land banks to this new property, allowing them to reduce their interest expenses and make the property’s interest tax deductible. This significant boost to their portfolio has given them renewed confidence.
Future Plans
With the success of this transformation, they are now considering offloading one of their land banks to acquire two additional multi-unit properties. This strategic move will further diversify their portfolio and create a more sustainable income stream for long-term wealth building.