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Despite a marriage breakdown, this property investor is looking to not only rebuild, but expand into commercial property in just five years’ time.
Following a marriage breakdown, property investor and mortgage broker Colin Rice shared his ambitious plans to get ahead of where he is today despite some life setbacks.
Telling listeners his property journey so far has been a mix of calculated risks and good fortune, Mr Rice believes he can rebuild his property portfolio in under five years.
“I just turned 50 last May,” he said on a recent episode of The Smart Property Investment Show.
“So, I’ve got a five-year plan to basically get back to the position I was in or better within five years.”
In order to do so, Mr Rice said his first calculated risk will be the purchase of a commercial property that his mortgage brokerage business can sublet.
“The next move for me is to look at buying a commercial office suite that I can work from, and then sublet that as well,” he said.
“So, you essentially rent it off yourself. You rent it off, you pay rent into your SMSF. And then, you can sublet it.
“The rent goes in there. And you can make contributions. So, you could buy a property for around a little office suite not too far from the CBD for around the $300,000 mark,” Mr Rice said.
The mortgage broker is banking on paying the property off within the next 10 years, while pointing to the tax benefits of his strategy to utilise his SMSF for the purchase.
While he is currently more drawn to commercial properties, Mr Rice still sees value in residential.
“Personally, I’ll be happy if I can get another commercial property and one more cash flow positive residential property within my SMSF.”
“And then, I’ll just focus on building my business up,” he added.
Mr Rice said he began his property journey in 2000, purchasing up to a dozen properties over the next two decades, albeit cashing out on half during the last property boom.
While currently holding five properties, Mr Rice said he will probably lose two in the marriage breakup.
“So, I’ll be left with three, that’s OK. I’m counting my blessings that I’m walking away with that asset base. And hopefully an SMSF fund and my business and three properties. So, if I come away with that out of a divorce settlement, that’s a good foundation to rebuild again,” he said.
As for the decision to utilise his SMSF to purchase property, Mr Rice said it was one based on his current circumstances.
“You can borrow through SMSF without tapping into the rest of your other situations. So, that’s why I’m going to go that route.”
“It can be a bit complicated, can be a bit fiddly, because there are trusts to be set up. And you have to apply by the SIS Act, Superannuation Act, which is very strict. And there’s penalties in place for that. However, if you’ve got a good accountant and a good auditor, then that’s all pretty sweet,” Mr Rice concluded.
To hear more from Mr Rice, click here.