If someone asked you which career would be the most likely to lead to a property investment portfolio: mortgage broker, or hair and make-up artist; you’d probably think it was a no-brainer. However, for Sandie Foreman, the lines are a little more blurred.
“I was living in Richmond, NSW, which is right near a RAAF base,” Sandie says. “I had a lot of clients in the [hair] salon and friends in the Defence Force; and they had told me about Defence Housing Australia (DHA) properties that you buy and lease back to Defence staff.”
After later beginning work as a mortgage broker, Sandie referred numerous clients to DHA and, in 2008, took the plunge and bought one herself.
Sandie and her partner bought a four-bedroom, brand new house in Harrison–an ACT suburb located just 9km north of the Canberra CBD. They paid $565,000 for the house, and managed to get a $590 per week rental lease, as part of an ‘above market’ special offer from DHA. This complemented the 100% tenancy guarantee, plus incremental rent increases for the duration of the 12-year lease.
“If it wasn’t such a good deal, we probably would have aimed for about the $400,000–450,000 investment range,” says Sandie. “But it made sense; we got the extra tax benefits of buying in the ACT and claiming our stamp duty back in that first year.”
From silver screen to mortgage scene
Sandie was no ordinary hair and make-up artist before she began mortgage broking. Throughout most of the ‘80s she worked for the ABC on a number of different projects.
“It was everything from the news and Playschool, through to telemovies and full feature films,” Sandie says. “I loved doing it when I didn’t have young children, but the hours can be long and you had to be available six or seven days a week at times, so it wasn’t very practical.”
A friend was interested in taking on a mortgage broking franchise and asked Sandie to be her partner. Sandie liked the idea of a new challenge and got on board.
“I absolutely loved it and we did very well,” Sandie says. “We seemed to have a lot of empathy with clients and took off that way. When that partnership dissolved we both stayed in the industry.”
A brand new scheme
March 2012 saw Sandie embark on her second property investment: one where the only guarantee was a government rebate.
She purchased a small, three-bedroom cottage in Gympie, Queensland, for $279,000, as part of the government’s National Rental Affordability Scheme (NRAS). Sandie knew there were some major developments scheduled for the area and thought it would make a good capital growth play.
“One of my clients is the acquisitions manager for Woolworths and he told me they were building a big shopping centre up there, which is usually a good sign,” Sandie says.
Part of the NRAS scheme dictates that vendors must offer their properties at least 20% below market rent value. In return, they receive a yearly government refund. However, no assurances can be made regarding quality of tenants and Sandie was not so lucky.
“We have a couple with young children that we have to hassle for rent every month. Their first six month inspection found mould on the ceilings and a few other things… it’s much more hands on than DHA.”
Sandie and her husband have recently set up a self-managed superannuation fund (SMSF) and are taking a short break from property investing.
“I have transferred my super into the SMSF and will look at investing in cash or shares until the balance comes up and I can comfortably invest in another property,” Sandie says. “If we do another investment it will be a DHA. You don’t have to chase up rent and make sure people clean the house.”
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