Case Study - January 2006

Andrew and Kylie Carr

“It was Brian, from Wealth Coach Australia, that introduced us to Investment House” says Kylie Carr from Brisbane. “We joined Wealth Coach to get on top of our personal finances. We were like most people – earning a good income but not really seeming to get ahead. And it wasn’t as if we were living lavishly either. Anyway, part of the strategy we worked out included a property investment and Brian suggested we talk to the team at Investment House”.

Andrew and Kylie weren’t seasoned property investors, so being able to work with Investment House meant they had an experienced hand to help guide them through the process.

“We hadn't done anything like this before so it was a bit daunting. We met up with Colin and he explained how different options could work for us. And then he went through the entire process in simple and logical steps – it all made good sense” explained Kylie.

“Once we saw how it all worked we both felt pretty confident about going ahead. The ‘One-Stop-Shop’ service that Investment House offers was attractive too because everything was handled in the one office. We figured that meant there was less chance of things slipping though the gaps. Anyway, we looked at several options and decided to go with a house and land project in Camp Hill. It was a 423m2 block and promised city views from the back deck if we built a two story home.”

“It was in March 2005 that we kicked it off” says Andrew. “We settled on the land at the end of April – and according to the feasibility model Investment House had given us – we should have the whole thing done and dusted just before Christmas.”

As it turned out, we reached practical completion just before Christmas but the final touch ups weren’t done until January. The house was handed over on Friday 13th – nothing unlucky about that as the tenants moved in three days later on Monday the 16th.

“Once we made our decision to go ahead, it was dead easy” chimes in Kylie. “Choosing colours was a dream. We'd heard of people having domestics over colours, but being able to choose from a hand full of professionally prepared themes made it quick and easy – and no domestics!”

Once the construction was underway Andrew and Kylie visited the site a couple of times. “We were just being nosey - we really didn't have to because Sarah did a wonderful job in keeping us up to date with regular photos of what was happening, and also emails with what was scheduled next. A friend of ours is project managing a small townhouse development and she's frazzled 24/7 - I can't help teasing her with how easy our house has been”, said Kylie.

As the construction phase neared completion, Andrew and Kylie became a little apprehensive about how quickly the house would be rented. During the construction, the loan payments had been capitalised so the payments weren’t affecting their week to week cash flow. But once the normal repayments started it would hurt if there wasn’t any rent coming in to help. “We needn't have worried. Wanda had tenants lined up a couple of weeks before the house was finished” said Andrew. “And she managed to get a higher rent than was forecast in the initial feasibility analysis so we were really chuffed.”

A similar house was built on the block next door and has just sold for $680,000. “It has a plunge pool but one less bedroom (and it’s a bit smaller), so we figured they are pretty similar, if we assume our house would sell for the same amount then we’ve picked up an easy $65,000 in equity” says Andrew, with a smile resembling a Cheshire cat. “This arm-chair developer thing doesn’t pay too badly, especially if you work it back to an hourly rate!” he quips.

Where to from here? Andrew and Kylie plan to let the dust settle on this one, and then look at getting more houses in their portfolio before the next phase of capital growth in Brisbane.