Anne is a single mum with two kids, in her early 50’s, working a full time managerial job. She has limited time but a keen interest in property and stocks. She has a lovely home in Brisbane with a small mortgage, another Australian investment property with a larger mortgage, a substantial superannuation account and decent stock portfolio. In short she has done well for herself despite some financial set-backs from life circumstances.

Her plan was to invest a fixed amount of money, AUS $36,000, towards a 25% deposit, on a cash flow neutral property that would realise a capital gain upon sale, roughly fifteen years later, when she would be approaching retirement.

Safety of investment and ‘guaranteed’ monthly rental income to offset mortgage costs were essential in this situation. Anne was committed to paying many high expenses for a few years such as school fees, extra curricula activities, school trips plus the cost of feeding two teenage boys on top of her mortgage!

San Antonio represented the perfect opportunity. It is an extremely safe property market within Texas, in the expanding south of the US and is expected to have superior economic growth in the coming years.  Anne’s desire for good capital growth without risk of monthly expenditure led to a Move-Up type Balanced Return property investment in a prime area of the city at Stone Oaks. For five years, her vacancy rate has been nil and she has enjoyed a $200 monthly rental increase on this property.

San Antonio is a center for three major industries. It is home to a thriving specialist medical community, two military bases and domestic tourism focused on the Alamo.  San Antonio enjoys the largest conglomeration of specialist medical facilities in the United States. The US has an aging population (most noticeably in the north)...this is not rocket science! What you may not know is that doctors and nurses from all over the states come to San Antonio to complete a three year internship and gain their specialist certifications.  They then leave to start their new careers in other cities across the US. These are my perfect tenants.
Two newer military bases in the east and west of the city may be set to further expand if older US installations are closed because of US budget cuts.  It’s happened before.  Federal spending cuts do not mean universal cuts.  Indeed, cuts or closures to older facilities may result in increased spending at newer facilities especially those focused on health and modern technologies.
Lastly, San Antonio is a thriving center of domestic tourism and convention trade.

Before selecting the right property in San Antonio, Anne being a financially cautious type, spent a lot of time researching San Antonio districts and Texas and US property in general from her lounge room in Brisbane using the many tools that are now available. Google Earth provided a great view of her selected property and the surrounding facilities, while sites such as Zillow.com provide historical and current information on house sales and rental values.

Anne has adapted her plan and has listed her Brisbane investment property for sale. She wants to focus on Las Vegas Cash Flow properties in the $50,000 range to accelerate the pay off of her San Antonio property and thereafter provide regular retirement income. Removing the heavy monthly debt associated with the Brisbane capital gain focused property will allow her to take a number of smaller ‘risks’ on cash flow properties in the US with a greatly increased surety of outcome.

(For privacy purposes, client’s names have been changed, but all case study examples are real people with real property plans and reference real transactions.)