Single Mum: Property Investor – A CaseStudy


www.rodneybukuya.com

Single Mums can be home owners too.

The possibility of buying a family home seems to be getting harder and harder for many Australians. If you also happen to be a single parent that possibility, sadly, becomes almost impossible.For many it may become a dream that they will never be fulfilled.

But is there a silver lining hiding in the cloud that has been created by the Queensland State Governments job layoffs.

Case Study

T,  from Nundah in Brisbane is is 38, a single parent of a four year old and has worked in various state government roles since leaving high school 20 years ago.

T, is paying $300 per week rent for a modest 2 bedroom apartment and was worried that she would have nowhere to live when news of the redundancies spread through her office like wildfire.

But she was one of the lucky ones, a family friend got her a job in a local business. It’s only $40,000 per year + Super but it’s a better position to be in than some of her friends.

Her Super

One of the benefits of working for the State Government is a high level of Superannuation support. In fact T, was receiving Super contributions long before it became compulsory.

T. now has over $150,000 in her QSuper account, a combination of high employer contributions, some personal contributions and a modest investment return.

Now that she’s no longer working for the Qld Government she is allowed to take over control of her QSuper accumulation account. While she is still too young to draw it out, she can move it and has decided to set up a Self Managed Super Fund (SMSF).

The property

With her employer super contributions going into her newly established SMSF, T. is now able to purchase an investment property to a value of $258,000.

She decides to buy a house and land package. She can’t live in this house right now but she will be able to take it out of the Super environment, tax free, once she retires after age 60.

She can then move in and live on a combination of additional Super savings + The Age Pension when she’s old enough to qualify for that. Or sell the property to generate a tax free income and continue to rent until she passes away or goes to a nursing home.

Detractors

Some critics of this strategy would argue that the purpose of Super is to accumulate retirement funding not to buy a home.

Anyone who has ever spent time with a single mum or single dad knows how much effort and self sacrifice they go through to provide for their child. The child that gives them reason for going through everything a single parent has to endure.

If you ever want to see a single parents face light up with joy and hope, tell them that if they can just keep going, that in just over 20 years time, they’ll own their own home, without a mortgage and that when they die, they’ll have something real to leave their child.

These are the days I watch people cry a river of tears. These are the days I’m proud to be the financial planner son of a single mum.

2 thoughts on “Single Mum: Property Investor – A CaseStudy

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