CASE STUDY: DOWNSIZE TO FORRESTERS BEACH
Forresters Beach: Strategy – Downsizer
- Downsizing: A lot of people looking to downsize are retirees or empty nesters who no longer
need a large family home or perhaps are looking for something with less maintenance. - Opportunity: In this example, the couple own their home outright worth $1 600 000. The
house they have purchased has good bones and has been well built but needs a bit of vision
to refresh and upgrade the property, but this also provides the opportunity to finish it to their
own taste. - Sell First or Purchase First: Most of the time people will have to sell their home first in order to
fund their next purchase, but there is another solution allowing people who are asset rich, but
cash poor to use the equity in their own home to potentially qualify for a Downsizer Bond. - Solution: A Downsizer bond allows homebuyers with sufficient equity in their current home to
purchase their next home without the need to sell first. - Location: Discover one of the Central Coasts hidden gems, Forresters Beach. A quiet
beachside suburb with a selection stunning coastal beaches and beautiful walking trails,
located conveniently close to amenities, cafes and shops. Forresters Beach offers the
ultimate laidback lifestyle for those seeking to downsize and escape the hectic city pace.
- Purchase
$1050k Purchase Price
$52.5k Purchase Costs (5%)
$150k Renovation (cosmetic: ensuite, laundry, kitchen, expose timber floors/ remove carpet,
paint, render, restore roof, re-spray pool)
$4.03k Transaction Fee & Bond Fee (Cost to transact with Downsizer.com)
$1256.53k Total - Sale of their Existing Home
$1600k Sale Price
– $48k Sales costs
$1552k Total - Proceeds
$295.47k to put towards their retirement or savings
It is also worth noting in this example, that the $1 600 000, was a conservative estimate and
allows a contingency for issues that may arise. - Asset selection: In order to make this strategy work, selection of an appropriate asset is
critical and the use of conservative numbers including a buffer would be prudent. - Alternative: The couple could have instead purchased a more expensive house that didn’t
require renovation, still using the Downsizer bond and if there was 12 months of strong
growth in the area, they would be able to take advantage of this and sell their property and
realise the additional capital growth.