Rai and Dawn Krumm-Heller: Taking the safer route to riches

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Rai and Dawn Krumm-Heller were having a hard time getting into the property investment game back in 1999. Running their own business and interested in buying an investment property fairly close to the city in Sydney, they spent a lengthy luckless period trying to get finance for the places they wanted to buy.

“We had been looking for an investment property for about a year,” says Dawn. “We looked in the papers and tended to focus on where we would like to live. We looked at a couple of places in the city, because we like the area around the city, but the banks wouldn’t lend to us for any of those properties. They reckoned that there would be a glut, there would be too many places and too hard to rent. I suppose they didn’t realise what it was going to be like now, where everyone’s desperate for rental.”

Refusing to give up hope, Rai and Dawn kept a close eye on the property sections of newspapers and eventually came across an advertisement for a DHA property in North Ryde. Before fronting up to the house inspection, the couple decided to pitch the idea to a lender.

“We’d gone to our bank to borrow money and everything we said, they said no,” Dawn says. “So we said what about a DHA house? They said definitely. We’d lend you money for a DHA house because it’s guaranteed rent.”

After getting the go ahead from their lender, Newcastle Permanent Building Society, Rai took the short trip from the couple’s house in Gladesville to North Ryde and inspected the property. Liking what he saw, he bought it on the spot.

“We thought it was good that it was close, because we could keep an eye on it,” says Dawn. “We used to drive past and have a look sometimes.”

The Krumm-Hellers purchased the North Ryde duplex for $325,000 and leased it back to DHA for $431 a week. This healthy rental yield of approximately 7% covered Rai and Dawn’s mortgage repayments and meant they could continue with work and life and leave their investment in the hands of the government.

Casting the net further

In late 2011, Rai and Dawn decided to add a second DHA property to their portfolio. Having had an extremely positive 12 years with their first lease in North Ryde, they were willing to invest in a property in the ACT, even though it would be too far away to drive past on the way home.

“We bought the Canberra place in October for $530,000,” says Dawn. “It’s a three bedroom, two bathroom and two garage house. It rents for $540 a week and is actually on a 12 plus three year lease.”

The rental yield of 5% is less than that of the couple’s first property, but it is of less importance as they don’t have to meet repayments this time.

“We bought this one through our super…we have a self-managed super fund,” Dawn says. “We didn’t have to borrow anything for it. We are semi-retired now and we didn’t want to put all our eggs in the one basket. So with our super fund, we’ve got shares and a house and some cash invested.”

By using their super fund to buy the recently built Canberra house, located north of the CBD at brand new suburb Crace, Rai and Dawn were able to secure an investment that will grow for 15 years and can then be sold when they are retired and no longer subject to capital gains tax. Their super fund will also accumulate rent for that period at more than $28,000 a year.

“In 15 years’ time when the lease is up, we can just sell it and put the money into our super fund,” says Dawn. “That’s just more money we’ll have to live off into our old age.”

Overall, Rai and Dawn are ecstatic with their original decision to invest with DHA.

“We recommend it to any of our friends who are thinking of investing,” says Dawn. “We send them emails from DHA about new properties… We know the man who owns the other half of our duplex and he is very happy with his experience too. He is going to buy another one.”

The couple is now anticipating a smooth transition into full retirement over the course of their second lease with DHA.

“We wouldn’t have bought a second investment if we hadn’t have thought it was worthwhile,” says Rai. “For us, it’s 15 years of income that’s going to come in, which is guaranteed, no problems and no dramas. Considering the global financial problems, it’s pretty good not having any dramas at a time like now.”

Rai also says the DHA service has been exceptional.

“We’ve met some really nice people along the way and they’ve all been helpful. They’ve all gone out of their way, they’ve rung, they’ve contacted us, they’ve really put a lot of extra effort in there to keep us happy.”

Do you have more than $120k in your super fund? You could use your super to buy property - Find out how

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