Case Studies

It’s a future that Hometree helps a diverse range of clients become a part of.

The property industry in Australia is a great place for entry-level investors to learn about growing their wealth, with opportunities to purchase and hold providing safe paths to stable financial futures.

  • John and Emma are aged 51 and 50. They have a $300K mortgage, two children at university and $120K in super. John earns $80K per annum and Emma earns $45K.

    After hitting 50, John and Emma both realised that retirement was getting closer and it was time they started looking at how they were going to get their mortgage repaid by age 65 and somehow boost their retirement savings.

    As they started to really look at their financial position they realised very quickly that if they continued on the path they were on there was no way they would be retiring at age 65.

    Hometree sat down with John and Emma to examine their situation and developed a strategy. John and Emma built their home four years ago and ended up with a $300K mortgage. Because of their combined incomes their children receive virtually no support from the government while they are studying at university and even with the children working part time they still need assistance from John and Emma to live. They have no ability to save any money or make extra payments on the mortgage to reduce the term to 15 years (to be paid off by their retirement age).

    Their home is valued at $600K which means there is $300K equity. Hometree suggested that John and Emma meet with Burbs Property to discuss acquiring an investment property. Burbs Property have placed many properties for Hometree’s clients in the past that have all been cash flow positive, and in most cases the rents have exceeded expectation.

    Burbs Property showed John and Emma a dual-key property on the Sunshine Coast located within 1km of the Sunshine Coast University. On one side there are three bedrooms, two bathrooms and a double lock up garage and on the other there are two bedrooms, one bathroom and a single carport. From the street it looks like one house but it’s actually two, and as a result attracts two lots of rent.

    Hometree calculated that with the correct loan structure, the property is $85 per week cash flow positive. Hometree then received the quantity surveyor’s report and were able to calculate what additional tax savings will be generated. After analysis, the property will generate an additional $205 per week – cash that can be deposited directly into John and Emma’s personal mortgage.

    With an interest rate of 5.09% p.a. and a remaining loan term of 21 years, John and Emma are paying $485 per week on their personal mortgage. The additional $205 per week will help them pay their mortgage off in 12 years, hitting their goal and saving them $71,343 in interest.

    Ecstatic with this result, John and Emma then went on to implement the rest of the recommendations outlined by Hometree and now have clear direction on their superannuation, have insurance in place and their wills have been updated.