Stoneturn

Managing Investments As An Expatriate

Are you wondering how to plan around living overseas and ensuring you’re still investing? Here’s an example of how it could happen with Stoneturn.

Jane and Sam are Aussie expats currently living and working in Singapore. Recommended to us via friends, they have been permanently renting whilst working with the hope to eventually come back to Australia when the kids are ready to go to high school. Ideally, they’d be able to send them to their preferred private school and buy their dream home near the beach.

Purchasing an investment property

Initially, we worked with Jane and Sam and as we got into the finer details, we recommended that they speak to our recommended financial advisor. After connecting the two, Sam and Jane then came back to us with a solid strategy. They decided to purchase an investment property in Australia for capital growth. Eventually the property could be sold for the capital growth in cash or kept as an income producing asset that could fund other investments or the schooling.

Jane and Sam also have an existing investment property in Sydney purchased 10 years ago worth $960,000 with a loan of $275k.

Understanding the tax implications

Identifying that they may want to consider tax implications for now and in the future when they return to Australia, Stoneturn introduced them to an international tax specialist who advised them that they were already paying non-resident tax rates on their investment property as the net rental income was positive.

Rearranging the loan

To offset this, they recommended Jane and Sam leverage the equity in their existing property and borrow the full purchase price plus purchase costs. We arranged the loan for the equity with their existing bank which was the most convenient option for them. The loan was then made available, ready to be accessed for a deposit when they needed to move quickly on a purchase.

Even though they had the strategy and tax advice, they weren’t sure what the cashflow on the property would look like, what they would need to contribute each month or which banks would even lend to them as non-residents.

Getting the expectations clear

Stoneturn provided them with projected cashflows at current and higher interest rates to help them budget. We ensured there was a little left over from the equity loan for a cash buffer so that they didn’t have to manage fluctuating currencies.

Purchasing a property

Once we had the loan structured correctly for future tax considerations, we introduced Jane and Sam to a trusted buyer’s agent to focus on buying the right property for long term capital growth and also negotiate the right price. Given they are in Singapore, it was impossible for them to accurately research the market or be able to judge which properties would achieve the best growth over time. The buyer’s agent did all the house hunting leg work and was able to secure them a property before it went to auction.

The Whole Process. Start to Finish.

We continued to project manage the entire process, researching the best loans, advising on bank credit policy and loan structure, coordinating with the bank, solicitor, buyer’s agent, accountant, real estate agent and financial advisor to ensure all parties were able to partake in arranging the property purchase.

Jane travels a lot as a senior executive with a multinational so we arranged for documents to arrive at her hotel in Hong Kong for signing before she arrived. After they received the keys to their new property, we then arranged the landlord insurance and building insurance and a depreciation report (and negotiated a discount).

Each year we check in on Jane and Sam’s investments, send a complimentary property valuation and review the finance to ensure it is working to reach their goals.

Please note, this is a general case study and all tax related assumptions would need to be confirmed with your tax advisor.

Does this sound like something you’d like us to help you out with? We’d love to start the conversation. Give us a call on our Sydney landline, 02 8256 3109 or send us an email to admin@stoneturn.com.au

Let’s make it happen!

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I’m living in Singapore and wanted to buy an investment property back in Australia. I lucked in; I was introduced to Alycia Inglis.

Alycia immediately impressed me; she genuinely cared about my needs and really wanted to help me achieve the best outcome.

Throughout our dealings, time and again Alycia demonstrated her impressive knowledge of the finance and real estate industries. Alycia always listened in lieu of pushing; offering insightful guidance and advice in helping me navigate issues (people and institutions) that could otherwise have cost me…all the while maintaining a level of interpersonal care and attention that differentiate her as a bright star in an often cloudy pack. I have my investment property. Thank you Alycia.

Rob M., Singapore August 18, 2015

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