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Thursday, November 26, 2020

Invest now – live in later | Summerfield

Sometimes the obvious is just staring us in the eye. But it takes some planning to start as well as process to achieve. But all things worthwhile take effort. As two great men of history said, failure to plan is planning to fail, and, if you can’t describe what you are doing as a process, you don’t know what you’re doing.

Many questions come to mind when working through the best latter years and retirement plans. How much do we really ‘future proof’ where are we going to live in retirement? Where are we going to spend our most important golden years? What offers us value and financial security and financial optimisation? What offers us flexibility? What offers us ready access to health services?

There is common thinking that many people leave retirement decisions such as where to live when downsizing or seeking a new beginning until too late. They leave it until their opportunity to fully enjoy retirement and community living and community spirit is diminished. People need to plan early when the best financial and personal decisions can be made.

With respect to planning for a retirement home, the newly released Invest+Retire™ package at Summerfield seems to tick all the boxes. Cash flow positive. Summerfield is a thriving over-55s affordable luxury estate at the vibrant community-spirited Braidwood, between Canberra and Batemans Bay. It has really hit on a formula where financial and personal planning for retirement and as to where to live can be worked through proactively.

Most importantly, for the Invest+Retire model the property is freehold, so you can borrow, with no ghastly exit fees or selling restrictions. You can sell when you like and keep all the money.

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The newly released Invest+Retire™ package at Summerfield seems to tick all the boxes when it comes to planning for a retirement home.

So what is Invest+Retire™ all about? It really is very simple. Identify where you want to live and a property in an over-55s freehold estate and purchase as an investment property. Check value and amenity. Look at rentability and if any rental underwrites or guarantees. Take advantage of taxation deprecation benefits in your own personal circumstances. Most importantly, take advantage of the current low interest rates and flexibility to sell your home when it suits you best and pay off your debt later with your super.

Let’s look briefly at the investment equation – the numbers. For every investment decision, you need to consult your financial adviser.

You are 57 and your spouse 55 and you love the beautiful freehold three-bed two-bath two-car Summerfield home which you can purchase for $600,000, say $630,000 with stamp duty and costs. You plan to retire in five years. You have excellent equity in your own home. Your job pays you $100,000 per year before tax. You go to contract.

You are advised of the BMT depreciation analysis for this new home. You run through the numbers using your own home and Summerfield as security. A 95% loan and you have some cash to pay towards stamp duty and costs.

With the rental guarantee, the analysis shows a positive cash flow of $142 per week. With such a low cash input, the return on investment is fabulous. No better time than current interest rates to invest and then retire.

The formula just makes sense!

Visit the Summerfield website here.

This feature was created in partnership with Summerfield. For more information on sponsored partnerships, click here.