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Jenny has been a registered nurse for more than 30 years and Andrew retired in 1996 following 21 years service in the Royal Australian Air Force. Both are now professional investors with shares, managed funds and eight investment properties across Australia. They built their fourth owner/occupied home as a two-contract house and land purchase, which they believe was more difficult than purchasing investment properties. This is their story.
Our first property was purchased in 1996 in Melbourne and was all we could afford at the time as Jenny was working part-time and Andrew was about to be discharged from the Royal Australian Air Force.
We found The Investors Club in 1999 and purchased our first Club properties in south-east Queensland; a 2x2 apartment in 2000, house and land in 2003, a fully refurbished house in 2004, and a retirement unit for cashflow in 2005. We digressed slightly and purchased a property in Western Australia in 2004. Every time a new purchase is settled and tenanted we submit a new Finance Capacity Form (FCF).
In late-2005, with a new mindset, we moved into more upmarket properties, tapping into Cairns with an off-the-plan purchase in a beautiful resort-style complex which targeted executive-type tenants. This settled in February 2007.
Fresh from our second Fiji PMC conference, with our goals in mind and the desire to spread our risk by accessing various markets, we moved into the rapidly booming Darwin market by using some equity from the amazing growth of our WA property. We purchased a four bedroom apartment with water and golf course views in Larrakeyah, just outside the CBD. This property settled in December 2006 and we are thinking about our next move.
Following the Sydney Conference in February (which is a must for serious investors), we decided that it was time to try somewhere else. We chose one of the exciting locations selected by the Club which was confirmed by supply/demand figures. We feel this location will continue our property growth, with good rental return, low outlay and low vacancy. Water views also!
This will be our most expensive property and the one we least expected to be able to purchase when we started our quest eleven years ago on just one full-time income. Over this time we have learned much and are still learning through the Club. Since becoming Support Members we have gained confidence and belief in ourselves to achieve our goals.
Next year we will purchase a house and land package somewhere in Australia
(other than South Australia or Tasmania) to the value of $350,000. This will complete the total portfolio we need to give us sufficient equity for retirement. Before purchasing our recent property, we had not paid more than $200,000 for a property, and it was only with the results from our Financial Independence Date Organiser (FIDO) that our mindset changed. No matter how scary, the results were in black and white for us to see. We had never really been scared to make the first move, but we needed to know how to do it right.
We have mentioned a little about our new mindset in purchasing to capacity. Due to inflation, competitive marketing and rising holding costs, it is recommended by the Club that you purchase as high a priced property as your capacity to borrow and service allows. The Club’s unique cashflow software enables you to plan how to cover those more expensive holding costs and any improvements to guarantee substantial rent increases, well over the standard CPI.
We are both baby boomers who believing in the power of the Club system. We needed to step up our accumulation of properties over the past two years as we know that property is the most stable vehicle for wealth creation and the road to financial independence. We realised a long time ago that the government won’t support us as our population ages. A pension and meagre super will not provide the lifestyle we desire in retirement.
We became Support Members nearly five years ago because we believed in accumulating Club properties over time using the power of the Club system and could see the light at the end of the tunnel which we wanted to share. We are quite excited that we have helped several members through the process of purchasing multiple Club properties using the Club support, from finance through to property management. As a result of this help we and six of our members have joined the rapidly expanding Property Millionaires Club. Those with at least $500,000 property equity or $1 million property debt have become silver PMC members, while those who have $1 million in property equity receive gold PMC membership. Remember; ‘our long-term support is the key to your financial independence’. Membership provides more specific, relevant, and detailed information to achieve greater wealth.
The ABS tells us that nine out of ten investors sell their properties within seven years as they do not know how to hold or manage them for the long term. As your Support Member, we can assist you with ongoing support when you buy property through the Club. We would like to assist you to reach your financial goals, so please let us know when we can be of assistance to you.
Although we have three types of investments, we consider property to be our mainstream for wealth creation with the shares and managed funds as bonuses.
The fact is, we have already chosen our financial independence date which is towards the end of 2009. This gives Jenny the choice to give up paid employment and do what she enjoys most. In the last six months, Jenny reduced her work to 14 shifts a month instead of 19 and has still been able to purchase the last three more expensive properties with a reduced income and zero tax.
We have found all this possible due to the ongoing support structure provided to us as Club purchasers with the assistance of our Team Leaders and long-time friends, Sue and Colin Todd and our Branch Managers, Wendy and John Priestly who are always encouraging us to stretch our capacity and ‘borrow until it hurts’.
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