After initially struggling to get a foot in the property market, Dr Jessica and her husband have used residential property to secure their family’s financial future
When Dr Jessica* moved to Melbourne with her husband to further her career, the couple were eager to put down roots and settle in for the long-haul.
But as they began their search for a loan and a family home, they found the traditional banks weren’t equipped to deal with their unique circumstances.
Dr Jessica, a medical researcher with a PhD, was working as a contractor. That meant that banks would only consider loan applications based on the income of her husband, a medical doctor.
“We tried so many different banks. One bank manager basically laughed us out of his office and said there was no chance we would ever get a home loan without a 20% deposit,” Dr Jessica recalls. “It was disheartening. We’d just moved to this new city, and it felt impossible to try and get that sort of lump sum.”
It wasn’t until they met Avant finance specialist Jacqui Lombard that they were finally able to get a foot in the door.
“We sat down with her and worked through the different ways we could get into the market. She was just so knowledgeable. One way was to take a higher interest rate, and then refinance after 12 months,” she recalls.
That first experience paved the way for the couple’s property finance journey. Jacqui has been with them for each step, building a relationship that Dr Jessica says is special.
“When we started thinking about investing in residential property, it was a no brainer to talk to Jacqui,” she recalls.
The residential space, Dr Jessica says, appealed because it could help to create a “nest egg” for the couple and their two children. And she says it felt like a tangible investment type, compared to other options.
“There’s a physical property you can see,” she says.
According to Jacqui, clients who are investing for the long-haul – like Dr Jessica – are well-suited to residential property, which has a reasonably low risk profile if you’re happy to ride out the bumps, rather than buying and selling every couple of years.
Property prices, she says, tend to double roughly every decade, and there are obvious benefits at tax time.
Once Jacqui has worked through a client’s financial circumstances, she recommends using a property broker, or a buyer’s advocate, who can help prospective owners to make an unemotional decision about what they buy.
For Dr Jessica, using a buyer’s advocate proved to be invaluable. Hers was a trusted friend who worked closely with Jacqui, creating a team that “took the guesswork out of everything”.
Even though COVID-19 made property viewings difficult, working with the advocate may even have turned that potential hindrance into a positive.
“When we go and view a house, we’re thinking about which room our daughter might have, and where we’ll sleep. But it’s an investment property. It’s not designed for us to live in,” Dr Jessica says.
And there’s nothing worse, she adds, than attending numerous property viewings and auctions on a Saturday afternoon.
Taking emotion out of the process has led to several sound purchasing decisions, with Dr Jessica and husband buying second and third properties to follow their first.
“They (Jacqui and the advocate) do all the homework,” she recalls. The advocate assesses capital growth in different areas, finding out the best suburbs to target, and then works with Jacqui to work out if the rental returns will be sufficient to secure the loan.
“After buying the first [property], we went back for the second, and the third, because each time Jacqui has just been so able to liaise with banks. It’s been such a pleasure,” Dr Jessica says.
Together, Jacqui has been able to save Dr Jessica and her husband from lifting so much as a finger, instead allowing them to focus on “all the activities the kids do”. The result is a property portfolio that’s performing well, without the stress.
Beyond each individual transaction, Dr Jessica says that one of the biggest benefits of working with Jacqui is the ongoing relationship they maintain, which makes managing their portfolio so much easier.
Whether it’s renegotiating the rates of each loan, or shopping around for better options, having an expert makes everything seamless.
“We’ve been with Jacqui for nine years now,” she says, adding that having her by their side leading negotiations with banks whenever they need is invaluable.
“Jacqui is like family to us. There’s just never been a time where she hasn’t gotten back to me in a timely manner. I’ve always been made to feel like I’m the most special client she has.”
Dr Jessica has two pieces of advice for anyone thinking about investment property.
First, she says it’s important to remember you’re in it for the long haul. Don’t be spooked by rising interest rates!
And second, she says it’s not worth waiting for the perfect moment to buy. It never hurts to start the conversation and start preparing.
*An alias has been used