SSS – Oct 2021

G’day All,

What a great year 2021 has been for Aussie property!

Official cash rate is still at 0.1% – this means the velocity of money flowing through the economy is still considered too low. The RBA don’t anticipate needing to increase this until 2024, but it will all depend on what inflation, wages and unemployment does between now and then.

So when will mortgage rates rise?

CBA and Westpac are tipping they’ll rise a year earlier in 2023. This is because of the huge amounts of pandemic stimulus the government has pumped into the economy. Due to rolling lockdowns, people haven’t had the chance to travel or spend as they would normally. As a result, over $200 billion is estimated to be sitting in savings accounts that will eventually find its way into the economy and ultimately property (land) prices.

This will see inflation and wages increase meaning interest rates will have to rise in order to prevent the economy from overheating. We’ll be keeping an eye on inflation and wages growth going forward.  

What about the recent APRA restrictions? 

From November, banks must assess your serviceability with a 3% buffer (currently 2.5%) ie: if the bank’s standard variable rate is 3.5%, you’ll be assessed for ability to repay at 6.5% P&I.

APRA are also considering introducing debt-to-income (DTI) ratios capped at 6x, meaning for a person earning $100k gross, the max debt they can hold is $600,000. This isn’t in play yet, however if it is introduced, it will constrain diligent and responsible investors from expanding their wealth base.  

It also risks creating a bigger wealth gap between those with and without property. If for instance you owned two investment properties, your PAYG salary plus total rental income would equate to a higher lending cap and therefore ability to expand your asset base.

A person without assets would see their lending capped based on their salary amount only until rental income could be demonstrated.

Tax Update

Although still in draft state, a tax ruling permitting interest deductions for the construction component of lending for an investment property has been issued by the ATO. The land component of lending still cannot be claimed until the property is built and genuinely available for rent.  

For clients who have recently begun the building process or built within the last two years, it’ll be worthwhile discussing this with your accountant, or let us know if you’d like us to assist with your tax affairs if not already.

18.6-year land cycle

As touched on in previous updates, we’re now firmly into the second-half of the real-estate cycle. Key industries for this stage are commodities, agriculture and defence. When combined with high affordability as seen in the graph below (percentage of median income required to service a median mortgage), this broadly equates to the markets of Perth, Brisbane, Adelaide, Darwin and major regionals such as Toowoomba.

Source: RBA 2021

This is also a global phenomenon as property values in the US and UK are experiencing similar gains.

Going forward…

If you’re considering investing for the first time or looking to add to your portfolio, I’d suggest now and the next 24 months (circa late 2023) is the window of opportunity. We expect to enter the winners-curse phase from mid-2024 onwards, and although good purchasing may still be possible, extra diligence and prudence will be needed.  

Please drop us a line if you’d like to explore your lending and/or property investment options and begin setting your future-self up now.

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (min 10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

SSS – Jul/Dec 2020

G’day All,

Well who would have thought!? With the official cash rate now at 0.1% (the rate that banks charge to lend to each other) and average home loan fixed rates between 2%-3%, there’s been a huge increase in real-estate lending across the country!

It’s also set to become much easier to get a loan as responsible lending laws are due to be watered down in early 2021! This together with all the government housing grants on offer plus stamp-duty concessions means property (land) prices will go higher. Vacancy rates are also extremely tight (1% or less) in all capitals and major regionals except Melbourne and Sydney.

As mentioned back in June 2020, we are now transitioning into the second half of the real-estate cycle marked by huge government stimulus and infrastructure spending on things like roads, rail, energy and renewables.

The economic drivers to follow for the next 5-7 years will be commodities, infrastructure and defence and I expect high growth pockets in WA, SA, QLD and the NT. Iron ore (Australia’s largest export) has just surpassed its previous price peak set back in 2014!

NSW and VIC (mainly Sydney and Melbourne) will likely stagnate given their impressive growth between 2013-19, and unless international arrivals and migration resume to record levels, we don’t expect that outlook to change. In fact, the outlook we had back in May 2018 is ringing true!  

As observed in June 2020, government and the RBA are doing everything they can to ensure the economy and house prices do not implode. This is a massive tail-wind that favours property owners.  

If you’re considering investing for the first time or looking to add to your portfolio, I’d suggest now and the next 12-24 months (until late 2022) is the perfect window of opportunity. Please drop us a line if you’d like to explore your lending and/or property investment options.

From the entire Defencewealth team, we wish you and your families a safe and enjoyable festive season and looking forward to 2021!

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (min 10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

SSS – Jan/Jun 2020

G’day All,

Hope you’re all keeping safe and sane during this pandemic…

Much has been said lately (mostly negative) on how COVID-19 will affect Australian property going forward. Whilst no one can definitively say what will happen, we can use history and knowledge of cycles as a guide:

18.6-year Real-Estate Cycle – Defencewealth clients will be familiar with, or at least have been introduced to the 18.6-year cycle as taught by Philip J Anderson through his 24-hour property clock and his book: The Secret Life of Real Estate and Banking.

As investors, we use this knowledge to guide our investment timing, combined with fundamental and technical data to determine which property markets might likely provide the best wealth-building prospects, and in an efficient time frame. The clock (first seen by me in 2013) is on record calling for a mid-cycle slowdown in 2020-21, which is where we are now with COVID.

A key point about mid-cycle slowdowns is that whilst a short recession may ensue which affects the share market, property (land) values remain largely unaffected. This of course is a generalisation and other cycles relating to commodity prices and infrastructure need to be referred to when deciding on where to invest.

Going forward, we’d suggest that property will indeed remain stable. However, as we shift into the second-half of the 18.6-year cycle from mid-2021 onwards, the locations that had significant capital growth between 2012-20 (read Sydney/Melbourne/Hobart) will likely stagnate or possibly decline in the run-up to 2026-27.

The states of QLD, WA, NT and SA will, in my opinion, be key to watch and invest in as their economies are primarily built around resources and agriculture, which usually become high-demand in the second-half of the global real-estate cycle.

Another point worth noting is that governments and central banks around the world, including our own RBA, have said they will do whatever it takes to ensure the economic and financial system doesn’t implode. This means that house prices will not be allowed to mass-crash by ensuring people can continue to pay their mortgages and rent. Examples include JobKeeper programs, money printing, bond buying, first-home buyer grants and guarantees, and even direct stimulus payments like Rudd’s $900 back in 2008/09.

Investment home loan rates are now below 3% and gross yields on previously recommended properties are tracking between 4.5%-5.2%. Vacancy rates have been tightening in landlords’ favours (3% is considered a balanced rental market) with April stats from SQM Research showing:

Adelaide (Seaton, Exeter): 0.5%

Gold Coast (Coomera, Pimpama): 2.1%

Ipswich (Ripley): 2.7%

Logan (Greenbank): 3.1%

Toowoomba (Glenvale): 1.8%

Yes, there will be some further fallout in the months ahead, but not to the extent that most are implying. Once we get over this COVID speedbump and society’s demand for home loans picks up again, and at historically low interest rates, this will likely fuel a surge in property demand in areas where new jobs will be created; think resources, agriculture, major infrastructure and defence.

We will of course need to exercise caution and adequate planning as we get closer to 2026-27, being the anticipated peak of the cycle, but until then, maintaining a long-term view especially now will be important. Helping you build sustainable wealth that will provide for you and or your family’s future endeavours is our primary mission.

Stay Safe!

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (min 10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Phillip-J-Anderson-Property-Clock

SSS – Nov/Dec 2019

G’day All,

2-minute read

Quick reminder these updates are designed to help inform and educate on key things to monitor when investing in property. The aim is to help build a solid and sustainable wealth/capital base ideally early on in one’s career. Having an understanding of historical cycles will also aid in future investment decision-making.

Tax Alert

From 1 July 2019, investors are no longer able to claim interest expenses during construction of an investment property. These costs will instead be claimable against capital gains tax if the property is later sold. Investors will still be entitled to full construction depreciation as well as on fixtures and fittings should you elect to build new. If purchasing an established property, depreciation will only be limited to what’s left over of the original construction cost.

Interest Rates

With the official cash rate now down to 0.75%, principal and interest (P&I) investment loans with fixed rates in the mid-3% range are readily available (80% LVR or less). From a cash flow perspective, the aim is to generate a yield (rent) that is higher than the interest rate and is why we target properties generating a minimum 4.5% gross return. Please get in touch if you’d like us to review your current loan situation.

Infrastructure

Federal and State governments are bringing forward infrastructure spending on major projects over the next 5-10 years. Keys states are VIC, NSW and QLD. SA and WA will be ramping up spending in preparation for major defence projects such as the Attack Class Submarines, Hunter Class Frigates and the Arafura OPVs. Our aim is to get ahead of the growth curve before these large projects begin impacting land price.

Longer-term, NT and QLD will benefit from further civil and defence spending as the federal level debates and redefines what northern Australia will need to look like given the power plays occurring in the Asia-Pacific.

Economy

As we move into the second half of the 18-20 real-estate cycle, we expect commodity prices to begin trending higher. We are already seeing this with iron ore and copper spot prices and the new calls for Australia to begin ramping up exploration and production of rare-earth minerals (China currently have the monopoly).

If these trends are sustained, particularly with fresh demand coming from India, we can expect the property markets of WA and NT to begin solid growth over the next 3-5 years. As expected, the recently approved Adani coal mine in QLD has already begun to positively impact the property markets of Mackay and Rockhampton.

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (min 10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Quote

An investment in knowledge pays the best interest – Benjamin Franklin

https://www.realestate.com.au/news/investors-who-hold-properties-for-longterm-get-better-returns-than-those-trying-to-time-the-market/

SSS – Jan/Mar 2019

Well we’re well and truly into 2019 and a lot has happened in the property investment space over the last few months. Main events are the Banking Royal Commission and reports of the Sydney and Melbourne property slow-down.

Royal Commission

Whilst this was a good thing and uncovered a lot of bad practices, bank shares actually increased after the final report was released. Pretty surprising and is an indicator that the market thinks that the worst is actually over for the big banks. It doesn’t look like any new laws will be introduced although consumers (you and I) may have to pay upfront in the future for lending advice. This will prove anti-competitive and end up shifting more power to the banks. We’ll have to wait and see for what happens after the federal election in May. Expect lending standards to still remain tight which will constrain supply and force up rents over time – a good thing for those that either already own property or who can qualify for new lending in the current market.

Market Slow-down

Yep, Sydney and Melbourne prices have come back in the last 12-18 months but this was anticipated and is very similar to what occurred in the late 90’s and early 00’s. It’s also one of the reasons why we have avoided recommending properties in these markets. Notwithstanding, residential rents in Melbourne and industrial property nationally are performing well. Only Sydney and Darwin saw rents fall in the last 12 months.

Key affordable markets to watch remain south-east Queensland and Adelaide. Queensland defence industry has again been boosted with the Loyal Wingman announcement by Boeing. Although still at concept stage, if aircraft manufacturing does go ahead, it will further boost the Queensland economy and of course land prices.

Going forward, we expect the commodity-based economies of QLD, SA, WA and NT to really begin leading around 2021-22. QLD and SA especially so with the submarine and frigate builds, emerging space industry, Land 400 and the large infrastructure projects planned in and around Brisbane.

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Quote

The best time to plant a tree was 20 years ago. The next best time is now – Chinese Proverb

SSS – Aug/Nov 2018

Doom & Gloom – Really?
As you’re aware, the mainstream media have been plaguing us with pending property doom and tipping a massive correction to occur very soon. 60 Minutes is probably the most noteworthy as they had a finance professor (Martin North) state that a 40-45% crash was possible.

What 60 Minutes failed to disclose was Professor North only placed his 40% prediction on a 20% probability; his most likely scenario for Sydney and Melbourne was a controlled correction of 10-15% over the next 2-3 years.
https://www.abc.net.au/mediawatch/episodes/60-minutes-property/10300068

On the topic of academics, the Queen asked a bunch of them back in 2008 why no one foresaw the GFC to which they were stumped and effectively blamed it on a lack of imagination.
https://www.theguardian.com/uk/2009/jul/26/monarchy-credit-crunch

There’s a saying that goes if it’s in the news, it’s in the price. Broadly speaking, the mainstream media are always late in their reporting, but we can use the media to guide our investment decisions and judge where we actually are in the cycle. In line with the principles of risk management and safety, the likelihood of a high-risk event being realised is greatly reduced with heightened awareness and mitigation.

This is exactly what is playing out now with Australian property in general. The increase in negative news is our cue to either remain or continue building our property holdings where it is feasible and responsible to do so.

The Banking Royal Commission is also good for us as the tightening in credit conditions and serviceability standards will slow housing supply, yet population growth and underlying demand continues upward in line with the growing Australian economy. This will lead to increased rents followed by capital growth.

Australian exports of tourism, coal, iron ore and LNG are now trending higher, so much so that there’s actually a chance the federal government budget will be in surplus this financial year. https://www.afr.com/personal-finance/budget-in-surplus-in-first-11-months-of-2018-20180705-h12bov

There’s also been a lot of focus on China, but very little on India, a country of over 1 billion that are itching to pull themselves out of poverty and become more developed. This is exactly where China was 15-20 years ago! China’s Belt-Road Initiative (BRI) will also require large amounts of steel and energy and if Australia supplies even just 20% of the anticipated demand, we’re potentially looking at another mining boom similar to 2004-2010. http://www.acbri.org.au/

In summary, Australia is tracking pretty well. This doesn’t reduce investment risk though and when it comes to property investment, there’s a lot of considerations from land-size ratios, demographics, market-cycle, interest rates and investment buffers to name a few that need to be considered. This is in addition to your specific circumstances as an individual.

Always remember that property (land) is a long-term play and its price is derived by its overlying economy and position in the cycle, therefore avoid buying in at cycle peaks.

Strategy
The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Quote
When everyone rushes to one side of the boat, head to the other side to avoid getting soaked

SSS – Jun/Jul 2018

G’day All,

2-minute read:

Interest Rates

The RBA July cash rate remains on-hold at 1.5%. Because Australian lenders source a lot of their funding from overseas and interest rates globally are now rising, we can expect lenders to now begin lifting rates as has already begun with the majors. Now may be a good time to discuss the merits of fixing over the next 2-3 years remembering that P&I is the new norm for investment lending.

Also don’t forget we can also assist you with your DHOAS home loan requirements through Australian Military Bank (AMB)!

Federal Budget

Main take-aways are no changes to negative gearing (ability to claim expenses related to your investment property against other income); however developers will no longer be able to claim deductions on vacant land. This does not affect future clients who build a new investment property under a two-part (house & land) contract with the clear intention to rent it out.

The other big mention is $75 billion in national infrastructure spending. Land owners in vicinity of these projects will reap the greatest increases in land values and therefore personal wealth.

Tax Time

It’s upon us once again. Make sure you’re claiming your full deprecation entitlements and don’t forget that travel to visit an IP is no longer deductible. If you’d like a quote to process your ADF and investment property tax return, please get in touch as the team based in Sydney has some very good packages available.

Market

As mentioned previously, we are slowly moving into the second phase of the real-estate cycle, but not before an anticipated slow-down in 2019-21. From there we will see a growth-shift towards the commodities producing economies of QLD, WA and NT. South Australia will also bode well with the submarine and future frigates projects being confirmed (approx. $85billion). Terry Ryder’s article sums up nicely the relationship between economy and land value and you will do well to spot this early and acquire where you responsibly can.

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Quote – The few who do are the envy of the many who only watch – Jim Rohn

SSS – Apr/May 2018

G’day All,

Finance

-Official cash-rate left on hold at 1.5% for May. This is the longest period in history that the RBA has left the rate on hold. Underlying inflation is still <2%. There is an expectation that wages and inflation will begin to pick up at the end of the year resulting in a possible rate rise.

-APRA have lifted the 10% cap on property investment lending. In summary, banks may be more open to lending to investors and reducing interest rates, but……

-The Banking Royal Commission has ripped heavily into the way lenders assess borrower serviceability and expenses. In summary, getting investment finance now is probably going to get harder before it gets easier around early 2020. Try and have at least 15%-25% saved as a deposit before looking to invest.

Economy

-With global oil prices rising, Australian gas exports are soaring! This will bode well for QLD, NT and WA as demand builds over the next few years. Of note, the NT recently lifted the ban on onshore gas fracking so Darwin will be a market to watch as investment, projects and employment get off the ground.

Market

-Congratulations to our newest clients who are either underway or have recently completed construction of their investment properties! The LAND 400 announcement is a massive boon for the Ipswich economy and this is one of many projects that will support capital and rental growth in the south-east Queensland region.

https://www.qt.com.au/news/land-400-what-5b-defence-contract-means-ipswich/3360618/

Around the country:

-Sydney: Beginning to slow

-Melbourne: Possibly 12-18mths of growth left

-Hobart: Possibly 2-3 years growth left

-Adelaide: Recovery phase. Begin positioning now for $85billion in submarine and frigate projects

-Perth: Bottom of cycle. Expect solid pick-up to commence in 2020-21 as commodities also pick up

-Darwin: Bottom of cycle. Expect solid pick-up to commence in 2020-21 as commodities also pick up

-Gold Coast (Coomera/Pimpama): Approaching peak cycle. Consider accessing equity and investing in other markets.

-Toowoomba: Moving into recovery phase.

-Brisbane (western and northern corridors): Upswing markets due to population, infrastructure and affordability metrics.

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and results and are selected for their balance in anticipated cash flow, capital growth and risk.

Please get in touch if you’d like the team to review your lending or discuss any aspects of property investment!

Quote – Someone is sitting in the shade today because someone planted a tree a long time ago – Warren Buffet

SSS – Jan/Feb 2018

G’day All,

1-minute read:

Interest Rates

Official cash-rate was left on hold at 1.5% in February. There may be a rate rise towards end of year as employment, wage growth and inflation start to slowly pick up. There hasn’t been much movement in investor rates but I recommend fixed rates for the next 2-3 year period be explored depending on your personal circumstances.

Serviceability and lending policies are still very tight. This will further constrain new housing supply (a good thing) but policies will eventually change and with it some solid capital growth if you can acquire now.

Property Cycle

The transition into the second half of the real-estate cycle is now slowly underway. Sydney values are very slowly losing steam and we can expect a shift of focus away from finance and services based economies (NSW & VIC) to the manufacturing and resources based areas such as QLD, SA and WA. This will take around 2-3 years to play out but opportunity is brewing. Broad 2018 expectations:

Sydney: prices lower by end of year

Melbourne: prices slightly higher by end of year (tends to lag Sydney by 6-12mths)

Hobart: probable double-digit growth (catch-up period after almost 10 years of zero growth)

Adelaide: prices higher by end of year (bulk of 10-year $200billion defence spend is in SA)

Perth/Darwin/Canberra: prices to remain stagnant (Perth & Darwin primarily resources-based economies)

Brisbane: prices higher by end of year (increased interstate migration, infrastructure and median price gap between Brisbane and Sydney is now at its widest in history).

Strategy

Always remember that property is a long-term play (min 10-years). Our TWO-50-TEN™ strategy and asset selection process is designed on this principle and based on experience. The aim of building wealth is to provide choice and manoeuvrability in the future.

From the whole Defencewealth Team, here’s to a great 2018! If you or anyone you know would like to discuss finance (including DHOAS) or tax/accounting options, then please get in touch.

Quote

If you do not plan your future, someone else WILL plan it for you – Unknown

SSS – Nov/Dec 2017

G’day All,

2-minute read:

Firstly welcome and congratulations to our newest investment and owner-occupier clients!

We’ve increased our partner network to now include trusted tax & accounting services as well as DHOAS lending through Australian Military Bank.

Economy

-Official cash rate remains on hold at 1.5%. The RBA meets again in February and consensus is for rates to again remain on hold due low inflation at sub-2%.

-We expect improving economic conditions going into 2018. Trump got his tax cuts passed and Europe is powering along economically despite all the Brexit worry. Asian middle-class is strengthening which bodes well for Aussie tourism, agricultural exports, commodities and international student numbers. What happens overseas matters to us as Australia is well and truly part of the global economy.

-Aussie banks will continue to capitalise on the improving economy and increased APRA regulations by independently raising rates (investor loans especially). I agree that now is the time to fix (strategy & asset dependent) and should be aiming for sub-4.8% interest-only or sub-4.2% P&I. Fixing for 3 years now should time well for an expected mid-cycle slow-down in 2019-20 where interest rates will likely drop momentarily.

Property Market

Key land markets to watch in 2018 are:

-Greater Brisbane (heavy infrastructure spend)

Adelaide ($85 billion in naval spending)

-Perth (cyclical low)

-Townsville (Adani Carmichael mine flow-on effect)

-Cairns (tourism and tight vacancy rates) and

-Darwin (approaching cyclical low combined with defence, tourism and livestock trade increases).

Sydney and Newcastle will likely plateau with Melbourne expected to increase for the next 12-18 months.

On behalf of the Defencewealth Team and partners, I wish you and your family a very Merry Christmas and safe, prosperous New Year! As we recharge and refresh, I encourage you to take stock of what you’ve achieved in 2017 and we’ll be sure to hit the ground running in 2018!

Quote

The project you are most resisting carries your greatest growth – Unknown

Strategy

The Defencewealth strategy of TWO-50-TEN™ is based on acquiring a $2 million portfolio at 80-90% LVR over a 6-8 year timeframe. Once acquired we work to reduce the LVR to 50% over the next 4-7 years using a combination of capital growth, offset accounts and principal repayments. Once at 50% LVR, you will have some serious financial options but it will take time (10-15 years) to achieve. The new property packages we recommend are considered investment-grade based on experience and personal results and are selected for their balance in anticipated cash flow, capital growth and risk.