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Portfolio accelerator program

Intelligent Property Investment

Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM

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portfolio accelerator Using our Portfolio Accelerator Program, you can build a $6.3m positively geared investment portfolio over 10 years, all from an upfront investment of $125,000 and an annual contribution of $10,000 for 10 years. In this eBook we will show you how Future Estate’s exclusive Manufactured Equity Product (MEP) can assist you to “manufacture” equity upfront in your next investment and accelerate the growth of your investment portfolio.

MEP AT A GLANCE Key Term What is it?

Target Returns

Investment Term

Details Property managed fund (equity)

n

Private property ownership on building completion

n

Typically return circa 15% of the property aquired e.g. $75,000 on a $500,000 property

n

During development of the project

n

Generally around 2 years

n

Investment Amount

n

Property Price

n

Geographical Focus

Market Focus

2

Typically $100,000 – $150,000 equity

Generally $400,000 – $600,000 Australian capital cities

n

Key infrastructure and employment hubs of mining regions

n

Affordable high quality investment property

n

High yields, low rental vacancy and broadly accessible price point

n

Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM


ASSUMPTIONS Conservative Case Assumptions Terms Investor contribution

Details $125, 000

Investment term Property value

10 years $500, 000

Stamp duty MEP investment amount

4% $125 ,000

Comments Initial contribution. $10,000 p.a. thereafter Suitable for investors Generally $400,000 – $600,000, 4% capital growth Percentage of property value Returned to the investor at project completion

MEP investment term

2 years

Typical length of an MEP project

Tax rate on MEP return

16.5%

Based on SMSF tax rate

Rental income

$600

Ownership costs

$7,000

Depreciation tax shield Initial loan amount

$10, 000 $375, 000

Implied LVR

75%

Loan term

30 years

Loan interest rate

6.5%

Per week. Assumed to grow at 4% p.a. Including maintenance, body corporate and other costs. Assumed to increase at 5% p.a. Tax benefits of depreciation expense Property value minus MEP investment amount Loan amount divided by property value Principal and Interest repayments Annual rate based on current lending market condition

In this example, we illustrate how an investor can build a substantial positively geared portfolio over a 10-year period. The investor makes an initial contribution of $125,000 and a further annual contribution of $10,000 for 10 years. Under the MEP Portfolio Accelerator Program, it is assumed that any end-of-year cash surplus is reinvested into as many MEPs as permitted by the cash balance.

Variation Assumptions Low Case

Conservative Case

Target Case

MEP Return

5%

10%

15%

Capital Gain

2%

4%

6%

Rental Growth

2%

4%

6%

Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM

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PORTFOLIO GROWTH MEP Portfolio Growth (Year 1-10)

MEP under construction Completed property

1

2

Source: Future Estate

3

4

5

6

7

8

9

10

Years

Property portfolio comprising 12 properties over a 10-year period.

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Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM


PORTFOLIO VALUE Portfolio Value $7,000,000

$6,000,000

Portfolio Value

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$0

1

2

3

4

5

6

7

8

9

10

Years Conservative

Low

Source: Future Estate

Target

Assuming Target MEP returns are achieved and each MEP takes 2 years to complete, an investor can build a $6.3m portfolio over 10 years.

Portfolio Implied Equity $4,000,000 $3,500,000

Implied Equity

$3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000

$0

1

2

3

4

5

6

7

8

9

10

Years Source: Future Estate

Low

Conservative

Target

Our MEP Portfolio Accelerator Program can assist investors in building substantial equity within 10 years.

Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM

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net CASH FLOW Portfolio Net Cash Flow $35,000

$30,000

Net Cash Flow

$25,000

$20,000

$15,000

$10,000

$5,000

$0

1

2

3

4

5

6

7

8

9

10

Years Source: Future Estate

Low

Conservative

Target

Our MEP Portfolio Accelerator Program can assist in generating positive cash flow for investors during the transition to retirement.

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Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM


If you would like more information about us and our advisory services, investment properties and products, simply call, email or visit.

(03) 9988 2900 info@futureestate.com.au www.futureestate.com.au @futureestate future.estate future estate

Copyright Š Future Estate Group Pty Ltd 2014

This document contains general information and does not contain personal advice or financial product advice. This information has been prepared without taking account of your objectives, financial situation or needs. Accordingly, before acting on this information and making financial decisions, you should consider whether this information is appropriate for you and are recommended to seek independent financial, investment, tax and/or legal advice having regard to your own objectives, financial situation and needs. This information may contain material provided to Future Estate Group Pty Ltd by third parties. While such material is published with necessary permission, Future Estate Group Pty Ltd and its related entities accept no responsibility for the accuracy or completeness of this information, nor endorses it. To the maximum extent permitted by law, Future Estate Group Pty and its related entities disclaim all liability for any loss, costs or damage which arises in connection with the use or reliance on the information and material contained in this document. Any forward looking statements and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Furthermore, past performance is not a true indicator of future performance. Any past performance information in this document has been given for illustrative purposes only and should not be relied upon as an indication of future performance.

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Future Estate eBooks Series: PORTFOLIO ACCELERATOR PROGRAM


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