Case Studies

Janice had limited time to create her retirement income...

Hybrid Case Study – Janice (Surname withheld to protect clients privacy)

Back in April, 2002 my investment portfolio started to take on an enlightened & different emphasis. I had just had a meeting at Hybrid House with Kieran & a personal advisor. My expectations of that meeting were that I would begin the long & complex path of unraveling the mysteries of turning the financial mess I had created through uneducated property purchasing into a successful property investment portfolio which would provide for my retirement. I had just three & a half years to turn an increasing annual loss into an income of $30,000 per year to meet the goal set that day.

In March 1996 at the height of a property buying frenzy known as ‘a boom’, I blindly followed the advise of ‘negative gearing’ guru’s out to line their own pockets at the expense of the uninitiated, by purchasing a ‘good little renter’ mortgaged 100% against the equity in my own home. Over the next 4 years I purchased a second & third ‘good little renters’ mortgaged 100% against my own home. In my ignorance, I didn’t know about yields and therefore didn’t realize that the 6.9% I had achieved was not productive.

The theory of negative gearing appeared to be:
1. that rent would be increased every 6 months, hence the profits would improve – the reality was: tenants get upset when the rent goes up & move out, the property is vacant while new tenants are sought, the rent either remains the same or goes down due to unpredictable market forces.
2. that property prices increase so I would be able to sell 2 of the properties to reduce debt on the third creating a comfortable income – the reality was: property prices were not going up & I was in danger of financial strife trying to service debt which included not only the deficit in mortgage repayments but also rates, insurance, maintenance costs & ‘bad tenant’ debts.

So Hybrid Group Ltd’s commitment to me that day was multi facetted with the overall aim of generating my desired income for retirement. This involved:
1. the setting of specific goals to restructure my portfolio
2. a regular series of meetings to educate me & to evaluate progress
3. finding properties which would bring my goals to fruition
4. offering a range of interrelated services essential to creating & maintaining a property portfolio

In two & a half years, I have turned my potentially disastrous property buying experiment into an effective income-creating strategy. I have learnt how to work-the-figures before entering into negotiation to ensure the property fits my goal of having $30,000 p.a . for my retirement. I have learnt to make decisions based on facts, not on what might happen and probably won’t happen. I have learnt to discard my emotional ties with non performing properties selling 3 to release equity in order to reduce debt by $113,600. I have learnt the power of the ‘minor dwelling’ strategy – a cash register in the back yard. I have learnt that it is more financial advantageous to have a strong Surplus Cashflow (before tax).

My Surplus Cashflow (before tax) is now $34,000 and (after tax adjustment) my Passive Cashflow is $39,000 p.a.! I also have Equity of $417,500 which is exceeding that goal set two & a half years ago.

And to top it all off, I have only had to buy 4 properties (1 is a Home and Income) and build 2 minor dwellings to achieve this result.

I can only dream of what my income would be had I sought such sound advice back in 1996.

Don't wait another day - Believe me you owe it to yourself to check out Hybrids Consulting services and get their professional advice today!