Managing Investments as an Expatriate

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.