First home buyer
For Brisbane-based Xiaolei, an executive working within one of Australia’s top 50 companies, buying property was always high on her priority list, and she was keen to get into the market as soon as possible. She bought her first home in 2009: a 30-year-old house in inner-city Brisbane. However, the journey was far from smooth-sailing.
“Almost every two or three months, the house needed some kind of repair-work. The garden took a lot of maintenance and pest control was a constant issue. For a single-professional, a house like this was just too much work and I never had the time to look after it.”
After 5 years, Xiaolei was in a position to purchase a new home for her family – this time, she purchased a brand-new home – which made all the difference. But she was now also faced with the dilemma of what to do with her old house.
“I bought the house in 2009 for $450,000 and the 2016 valuation was only $500,000, earning $410 a week in rent – with no immediate potential for rental increase. I felt as though things were tracking really well in my career, but in terms of my investment, I was stuck and didn’t know what to do next.”
Tapping into the knowledge-base
By chance, Xiaolei met Irene Liu, General Manager of Ironfish Brisbane and soon discovered they had a lot in common, both migrating from China and being a similar age. The crucial difference was that Irene had purchased 9 properties over a 5-year period. Xiaolei was curious to know how she’d managed it.
“Irene shared a lot of her own personal experience as an investor, spanning from her investment strategies, loan structure, to choosing properties as well as her own property investment tips. Her knowledge was extremely valuable in helping me to explore all the options. For example, I didn’t even realise there were potential tax benefits associated with property investment.”
The importance of loan structure
At the time, most of her friends were telling Xiaolei to just sell the house and be done with it. Irene, however, pointed out the house’s advantages, such as a prized inner-city location which would likely have long-term growth potential. Irene’s major tip was to go away and explore the options around a loan restructure. Xiaolei eventually decided to refinance and use the equity in the house to be able to continue to invest.
“I always knew that simply keeping money in the bank really wasn’t the ideal way to build wealth. I always wanted to invest in property, but my first experience was so discouraging, that I had just about given up on the idea as being too much of a headache. Meeting Irene and having a strategy session helped me to push beyond this experience, and consider other options – it very much renewed my enthusiasm for property investment.”