68% capital growth in 3 years
In 2013, Michael approached DPN for help with property investment. After gaining a solid understanding of his financial position, DPN presented a strategy to build wealth and researched a range of properties that fit his budget and investment goals.
One of the areas DPN identified was Kellyville in Sydney’s north-western growth corridor. After careful consideration, Michael decided on a house and land package to build a Dual Income property, to support a positive income strategy. The total cost was $772,885 and, just three years later, Michael’s property was valued by his lender at $1.3m, that’s 68% capital growth.
DPN’s dedicated Property Research Team monitors the market to identify emerging growth areas. Their property selection process involves identifying growth suburbs, ones which are backed by infrastructure spending (now in the future) amenities and jobs, near major cities and with stable population growth.
Kellyville, an investment spotlight:
- Western Sydney was announced as one of the three cities that would be part of the Greater Sydney Commission’s Three Centres Plan, a government investment hub.
- Kellyville’s last rural area was developed: 2,448 brand new dwellings were completed in that time, increasing the total by 39%.
- The area has benefitted from major upgrades to roads, including the M2, making the area more accessible for residents.
Importantly, Michael has found renting the properties went as planned. Michael says: “We’ve had no problems finding tenants and they’ve been solidly rented since the get-go.”
Michael’s rental income pays him $52,000 per year. When asked what he does with that extra money, he says: “I’m keen to expand my portfolio”. With the positive income generated from his property and the equity gained from capital growth, Michael can look at new investment opportunities to further build wealth.
Read Michael’s full property investor case study at http://www.dpn.com.au/learn/market-updates/how-to-invest-in-property-and-secure-your-familys-future
G R O W T H
68% in 3 years
$772,885 / $1,300,00
P O S I T I V E I N C O M E O F
Pre tax cashflow
Property Investor Case Study Assumptions
Annual rent combined: rent 1: $600 p/wk + rent 2: $400 p/wk = $1000 x 52 weeks less a 2% vacancy rate | Interest only loan: 5.17% x $723,539 | An initial purchase cost of $33,053 is needed to cover stamp duty, lender’s mortgage insurance, legal and loan fees. (Mortgage insurance can be avoided with a larger deposit or using more equity from other property); Property costs factor in a Medicare levy of 1%; Depreciation available only for new properties; Tax refund based on second highest tax bracket 37% + Medicare levy of 2% Calculation based on year 1. Property value based on bank valuation in Sept 2016 and is rounded to a general yearly indication.
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