31 Jul 2014
Case Study - Steven and Lily
I first met Steven and Lily, a couple with two kids in early June 2014 at their home in Hurstville. They had initially enquired about the Parramatta project and had not invested before in off the plan properties, but were eager to find something.
Steven worked in a high level role in a Managerial IT position, whilst Lily was a full-time housewife, but their first home in Hurstville had a significant amount of equity attached to it.
With several months of looking at properties for sale in Sydney, with no joy or success, they then came to iBuyNew and made their enquiry in the hope that we would be able to help them find the perfect property to suit their needs and requirements. Understanding the client’s needs is what I do best and I wanted to help their situation by finding them an apartment well suited for them.
By meeting them in person at their home I soon got to work to find out what their specifics were including their goals and maximum budget that they could afford.
With a budget of approximately $500,000, I knew that this was a sufficient amount to find them a good investment property and there were a few options available to them, of which Parramatta was no longer one of them. This was because Parramatta had become very over-priced and would not give as good a return as other up and coming suburbs.
Instead, I showed them various other projects which were within their budget, and would provide a better investment opportunity and this included Campbelltown.
During the meeting, I explained the concept of accumulating property portfolios and what they should be definitely looking for in investment hotspots including a suburb having low vacancy rates, a rising rental yield as well as massive government infrastructure spend. Parramatta had already gone through this phase, whilst Campbelltown was in this cycle now.
To help their decision further I showed them the floor plans for the units still available as well as the developer profile which they were excited about.
For their needs and requirements, Campbelltown was the best fit, within their budget and they could afford to go for a 2 bedroom apartment.
However, the difficulty came when they showed no signs of moving forward, becoming indecisive due to fear taking over by the thought of making the wrong decision.
Luckily, I have dealt with many other investors that have shown these same signs so I was able to assure them that this was in fact a fantastic investment opportunity that wouldn’t be here for long and that they should be looking at the major factors instead of the minor details. Moving quickly was also essential to ensure they would not miss out on this great opportunity.
At the contract review stage, Steven became edgy again. Although reading the contract extremely thoroughly is important to do, he picked up various unnecessary details which I encouraged him to look past and focus on the bigger picture. Regardless of which property or project you go for, there will always be something that you are unhappy with, and some things need to be accepted to move forward.
Once Steven understood this, he then nearly pulled out because of the lack of immediate tax benefits. With my calm and assuring nature I was able to put things into perspective by educating him that although he would only save up to $5K in tax savings per year, he would benefit by the possibility of capital gain by buying off the plan.
When all this had been ironed out and they believed that Campbelltown was actually a solid investment they decided to take my advice and happily bought their two bedroom apartment. This was a great result for Steven and Lily as with this new apartment they will be able to grow their property portfolio in the future to aid their retirement plans.
Mark is the Founder and CEO of iBuyNew.
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