“Sarah had just gone through a divorce, no full-time income, and two kids. The banks said no. I got her a solution in 14 days, and today she’s in her new place with her daughters. I didn’t just get her a loan—I gave her peace of mind.”
Someone recently asked me:
“I’m about to sell my share of an investment property we bought long ago with a friend – should I pay off my home loan or roll it into another investment?”
After the sale of this property , and after CGT, they’re walking away with a solid chunk of cash.
My answer? You can do both!!
This is what you do:-
1. First, use the proceeds to wipe out your home loan. This clears your non-deductible debt !
2. Then, once your home is mortgage-free, let us revalue your home and tap into the equity to fund your next investment.
Now, instead of personal / non taxable debt, you’ve got tax-deductible investment debt —
with OPM (other people’s money ) working to build you wealth
You’re not stuck juggling old loans. You’ve hit reset:
As Robert Kyasaki from “Rich Dad Poor Dad” says
“Debt is good — as long as it’s working for you .
The key is in how you structure it.
Need help figuring this out?
Contact me at www.bsifinance.com.au — and let’s build a strategy together to help you grow your wealth through “good tax deductable debt”
So what are the ramifications for an interest rate fall?
❓Has it something to do with the monumental housing shortage?
We need houses - and rate drop will increase demand for housing …. But may also boost supply !
❓Will rate drop encourage investors and developers back into the market to build houses, confident that prices will keep going up as rates fall?
Maybe
❓Will reduction of rates help with the High construction costs and delays getting permits to build more houses ?
Not sure !
First home buyers get in with a 5% deposit and no lenders mortgage insurance.
And this money will be firmly directed like a blow torch on properties in the sub million dollar range.
High demand and low supply = price rises
My view - if you missed the last boom, you don’t want to miss what’s coming
If you want to get your Preapproval for a property loan happening - give me a ring at www.bsifinance.com.au
Scenario
homebuyer has a $30k deposit and earning a combined $180k
Use the 5% deposit scheme to buy your first home now.
The scheme offers no LMI, no stamp duty in most states, and suits their income (they’re under the $200K cap).
With their $30K, they could buy up to $600K .
They could rent out rooms to help cover the mortgage, reduce their debt, and add value through cosmetic renos.
Once their loan-to-value ratio hits 80% - refinance, rent it out fully, and use the equity to buy again.
The election has been a landslide to labour....
What does this mean for property prices in Australia?
In my view , it looks like property will keep on rising for four good reasons – two on the demand side of the equation and two on the supply side.
1. Interest rates appear to have peaked, and the Reserve Bank is expected to start cutting rates. This will give buyers increased confidence right now, and even more buyers are likely to enter the market if/when rates start falling.
2. Population growth is at record levels. The population grew by 659,800 people in the year to September 2023, according to the latest data from the Australian Bureau of Statistics (ABS). All those extra people are increasing the demand for housing.
[Click here to book an appointment with Ivan Kaye]
3. Home building activity is too low. In the same year that 659,800 people were added to our population, we started work on only 165,602 new homes, according to the ABS. That’s well below the 263,920 homes needed for that many new residents (given that the average household contains 2.5 people, according to the most recent Census).
4. People are staying in their homes for longer, which is contributing to a shortage of for-sale properties, and therefore higher demand. In March 2025, a total of 251,000 properties were listed for sale across Australia, according to SQM Research. But in March 2019, there were 354,459 homes for sale. So despite the big increase in population over those five years, listings actually fell 27.8%.
In any market – whether for housing or oil – higher demand and lower supply leads to greater buyer competition. That’s why property prices are likely to keep rising in the foreseeable future.
Australia's median price keeps increasing. If prices keep rising at that rate, delaying your purchase by even six months could cost you tens of thousands of dollars.
It's generally a good idea to get a home loan pre-approval before you start looking for a property, so you can feel comfortable when making an offer.
Property is such a powerful way to grow your wealth because of the power of Leverage
Leverage : is “The 9th Wonder of the World”,
Leverage from property - using opm (other people’s money ) FROM
Here’s how each component plays a role:
1. Using the Banks Money
Definition: Leverage involves borrowing money to invest in assets, allowing you to control larger investments without needing to provide the full purchase price upfront.
Borrowing Power: When you take out a mortgage to purchase a property, you’re using the bank’s money to invest. This allows you to acquire assets that you might not be able to afford outright and thus leverage up into your Investment.
Asset Appreciation: As property values increase, your equity grows. This can lead to substantial compounding returns on your initial investment, allowing you to reinvest or fund other financial goals. Equity is where you grow your wealth, which also gives you the opportunity to draw down on equity as a deposit on your next investment property … and go again!
How It Works:
2. Tenant Contributions
Definition: Rental income from tenants provides a consistent cash flow, which helped cover mortgage payments and property expenses.
In the ideal world (which should happen over time) , Interest Rates plus Expenses should be equal or less than Rental Income received making your Investment - Cash Flow Positive in your hands.
Meaning Michael’s investment property is now funding itself - and as the property increases in value over time, the $50k investment will continue to get exponential returns .
He can then rinse and repeat :)
How It Works:
3. Tax Benefits
Definition: The Australian tax system provides various deductions related to property investment, which can enhance your overall return on investment.
How It Works:
Combining All Three for Compound Exponential Growth
When you strategically combine these three components, you can create a powerful financial strategy:
Compounding
Compounding, is a Powerful Principle that when harnessed correctly, can turn your modest investment, into Significant Wealth over time !!
Conclusion
By leveraging bank financing, benefiting from tenant contributions, and utilizing tax advantages, you can effectively give you more wealth than you ever thought possible - helping you create your generational legacy
A key factor is to buy the right property in the right area at the right time!!
This is a key 🔑 factor in maximising your wealth .
The cool thing is that in Australia, property in all major cities have increased significantly over time
In my view - today
Feel free to give me a call . I will gladly refer you to my property guru network, and I would be delighted to help you maximise your leverage by getting you the right loan ;)
Investing property in your Super can be a great way to build your Retirement Savings in Super…. Because of the ability to leverage using opm (other people’s money)
You can now borrow to acquire residential, commercial or industrial property, within your self-managed super funds”.
”The Power of Leverage … why would you borrow to invest in property with super?”
For every $20,000 of super , you can buy $100,000 worth of property
Leverage is using other peoples money when you are investing.
Here is a hypothetical scenario of how your investment can work (thanks to ProperT)
*simplistic helicopter example provided to merely outline the financial power of Leverage + Compounding Returns
These are things that an accountant or your financial planner can share with you - but some of the tax benefits include
Undoubtedly the greatest tax benefit associated with investing in property within a Self-Managed Super Fund (SMSF), is the potential Capital Gains tax Concession on capital growth.
As per the ATO web site : “If the property is sold while in accumulation phase after being held for more than 12 months, a 10 per cent tax rate applies. However, if that same property is sold after the super fund has converted to pension phase (in retirement), zero per cent tax applies.”
The longer you hold the property, the greater the likely capital gain, and the larger the tax benefit.
Rental income on properties owned by your super fund is also concessionally taxed. Another fantastic financial gain within your super. As with capital gains tax, in the pension phase, no tax will apply to rental investment income, and a flat 15 per cent will apply in accumulation phase. This is also extremely favorable when comparing neutrally or positively geared property, with rental income taxed up to 46.5 per cent, for property held in an individual’s name.
The Australian Tax Office allows individuals to make pre-tax salary-sacrifice contributions into super, paying 15 per cent contributions tax in super, whilst saving marginal tax in their own name. Which again could be up to 46.5 per cent. More after-tax dollars to invest, results in greater wealth being accumulated by you, and/or more personal debt to be repaid.
You may not be aware, that at age 55, workers (employees or the self-employed) can establish a “transition-to retirement, account-based pension”.
The benefits are twofold. First, in pension phase, as stated above, investments will be capital gains and rental income tax free. Secondly, pension payments made from super to an individual are also concessionally taxed and will be tax free from age 60.
Therefore, the typical transition-to-retirement financial strategy involves swapping higher taxed salary income, with lower taxed pension income, thereby allowing additional salary-sacrificed super contributions to be made.
This is not advice, ask your accountant/financial planner to explain. If you haven’t got one - let me know and I will refer you to the best ! (On Referron)
Your financial planner/accountant will explain how you can take advantage of this legislation and how Superannuation pension payments can be received, while working full-time or part-time.
There is a process for property investment in SMSF
It is complex - and if done properly can be a game changer for your retirement . You need to have on your team
- a great accountant
- a great financial planner and
- the best mortgage broker - that’s me - https://www.bsifinance.com.au/
And of course , you will need to find the right property in the right place at the right time to maximise your growth potential
Feel free to call me and let’s see if this strategy can work for you ….. hopefully our chat will be part of your journey to financial freedom :$ )
