Case
Study

Managing Investments as an Expatriate

How to manage overseas living with continued investments in Australia

If you’re wondering how to manage overseas living with continued investments in Australia, here’s an example of how Stoneturn can help you achieve this.

Jane and Sam are Aussie ex-pats living and working in Singapore. They’ve been permanently renting while 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

After ascertaining Jane and Sam’s initial needs, we recommended they speak to our financial advisor, in the first instance. After connecting the group, Sam and Jane 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 capital growth in cash or kept as an income-producing asset that could fund other investments or the schooling.

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

UNDERSTANDING THE TAX IMPLICATIONS

Considering tax implications for now and into the future, Stoneturn introduced Jane and Sam to an international tax specialist who advised 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, the tax specialist 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 cash flow 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 negotiating 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.

Stoneturn managed the project from start to finish, which meant researching the best loans, advising on bank credit policy and loan structure. We coordinated with the bank, solicitor, buyers agent, accountant, real estate agent, and financial advisor, and we made sure all parties took part in arranging the property purchase.

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

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 with?

We’d love to start the conversation. Send us an email to alycia@stoneturn.com.au or give us a call on +61 412 210 099.

Let’s make it happen!