Exclusive, Australia's youngest property tycoon sets the record straight

Exclusive, Australia's youngest property tycoon sets the record straight

Stephanie Brennan is one of Australia’s youngest real estate entrepreneurs, at just 27 she already owns properties across three continents rumoured to be worth $3.2 million.  

The real estate savvy millennial caused a storm of controversy in 2015, with critics claiming her good fortune was due to an inheritance and being given a hand up from her parents.

Today she sets the record straight on how she built her property empire and how she deals with her critics. 

stephanie brennan

Source: LinkedIn

How old were you when you bought your first investment property?

I purchased my first investment property on Sydney’s Northern Beaches in Manly Vale on my 22nd birthday back in 2012. 

Tell us how did you get started in property investment?

Originally, I was more interested in entering the stock market than property, however, this changed after I started working with an experienced property investor. Seeing the returns and how quickly you could build wealth piqued my interest. After moving into property management to better understand property investments, I started investing and it’s become my addiction.

How did you save for your deposit?

Although the focus in the media has very much been on my mum guaranteeing my first property, she only agreed after I had saved the deposit. In hindsight, this was a means of protecting her own wealth, and a valuable first lesson on asset protection. 

Fortunately, I had always been interested in money and working hard for it. My mum had plenty of undesirable chores to earn pocket money – let’s face it, no one wants to change the kitty litter!

Once I had my P Plates, I would skip school to work at my local retirement village. I also worked at the supermarket on the weekends and delivered pizzas in the evenings.

What sacrifices did you make along the way? 

At one point, I had a monthly budget of $50 to see friends. Most of the time I worked and stayed home, counting my money and working towards to goal of seeing my savings increase. 

Being able to buy my first home and all future investments to date has made the lack of smashed avo worth it. It’s also given me good budgeting habits I still stick to, but luckily I can afford the occasional smashed avo now. 

What advice do you have for other twentysomethings looking to buy a home?

Don’t focus too much on the background noise like interest rates and negative talk. Everything is possible if you want it badly enough. 

If you focus too much on the short term, and not enough on the long term, you will never reach your goals, whether that’s buying a property or otherwise. Taking 12 or 24 months to save may seem like a long time, but when you compare that to the 60, 70 plus years of life you still have left, the time passes more quickly than you realise.

You’ve copped some flack online for having a privileged start in life – what do you say to your detractors?

Bill Gates has a great quote –no one chooses where they start in life but they can choose where they finish.

I didn’t choose the family I was born into and I know I’m incredibly lucky. The reality is that everyone gets help in one way or another, it may not be financial and you may not even realise it at the time, but sometimes a disadvantage makes for a great advantage and can even be a driver behind your ambition and future success.

I may have had different opportunities then someone else my age and I’ve taken each opportunity and at times created more. It doesn’t matter what opportunities you’re given as long as you create something of value because of them, which has been a huge driver behind my current business, giving others the opportunity to create their own wealth and their own ideal future without any cost. 

How do you ensure you always buy the right investment property?

My strategy looks partly at cycles in terms of where I buy and sell to maximise my wealth, but mostly, I look at where the future markets are headed and where they’ve been in the past. Coupled with this, I’ll pivot my strategy, such as looking at high returns to increase my serviceability and then holding, capitalising off those returns and then selling and rebuying by porting the security so I can capitalise off the higher growth potential in other states or countries. I prefer to be proactive, but at times you have to react. Those are the times that you learn the most and become a better investor. 

How important is it to secure the right finance for your property loans?

Incredibly important! If you secure the wrong finance, it’s not the end of the world, all problems can be solved, but it’s far better to get your financing structure right from the start. Understanding what you want to achieve in the next 1 to 5 years ideally, will help give you an initial idea of how to structure your finance. 

What are your three key pieces of advice every first home buyer should know?

    1. Set a goal, write it down, then work backwards – it’s the first step to making your goal a reality.
    2. Check out a comparison site, a broker, your bank, whomever you want to go to find out how much you can borrow. Also, it’s so important at this stage to understand your budget by writing down every single expense you can think of. Make sure you save/invest before you spend any money on entertainment or items that aren’t a dire need, like your smashed avo.
    3. Find a property that matches your goal and don’t fear going outside your comfort zone or the areas you’re familiar with. A property within a 20-30km radius of a major CBD with strong population growth is a more conservative bet to gain capital growth. 

What are you top three tips for property investors?

    1. Strategy is so important. Get to know your bank’s or several banks’ policies on lending and this could help you grow your portfolio quicker.
    2. It’s also far cheaper to pay for your own renovation than for someone else, so finding an un-renovated property gives you the ability to create your own capital growth even when the market isn’t booming.
    3. Reducing debt is just as important as building wealth. You need to protect what you build and reducing debt will give you more comfort and flexibility when personal circumstances change or when things like interest rates increase.

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Learn more about home loans

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What do people do with a Macquarie Bank reverse?

There are a number of ways people use a Macquarie Bank reverse mortgage. Below are some reasons borrowers tend to release their home’s equity via a reverse mortgage:

  • To top up superannuation or pension income to pay for monthly bills;
  • To consolidate and repay high-interest debt like credit cards or personal loans;
  • To fund renovations, repairs or upgrades to their home
  • To help your children or grandkids through financial difficulties. 

While there are no limitations on how you can use a Macquarie reverse mortgage loan, a reverse mortgage is not right for all borrowers. Reverse mortgages compound the interest, which means you end up paying interest on your interest. They can also affect your entitlement to things like the pension It’s important to think carefully, read up and speak with your family before you apply for a reverse mortgage.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

How to use the ME Bank reverse mortgage calculator?

You can access the equity in your home to help you fund your needs during your senior years. A ME Bank reverse mortgage allows you to tap into the equity you’ve built up in your home while you continue living in your house. You can also use the funds to pay for your move to a retirement home and repay the loan when you sell the property.

Generally, if you’re 60 years old, you can borrow up to 15 per cent of the property value. If you are older than 75 years, the amount you can access increases to up to 30 per cent. You can use a reverse mortgage calculator to know how much you can borrow.

To take out a ME Bank reverse mortgage, you’ll need to provide information like your age, type of property – house or an apartment, postcode, and the estimated market value of the property. The loan to value ratio (LVR) is calculated based on your age and the property’s value.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

How is interest charged on a reverse mortgage from IMB Bank?

An IMB Bank reverse mortgage allows you to borrow against your home equity. You can draw down the loan amount as a lump sum, regular income stream, line of credit or a combination. The interest can either be fixed or variable. To understand the current rates, you can check the lender’s website.

No repayments are required as long as you live in the home. If you sell it or move to a senior living facility, the loan must be repaid in full. In some cases, this can also happen after you have died. Generally, the interest rates for reverse mortgages are higher than regular mortgage loans.

The interest is added to the loan amount and it is compounded. It means you’ll pay interest on the interest you accrue. Therefore, the longer you have the loan, the higher is the interest and the amount you’ll have to repay.

How much deposit do I need for a home loan from NAB?

The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

What is a secured home loan?

When the lender creates a mortgage on your property, they’re offering you a secured home loan. It means you’re offering the property as security to the lender who holds this security against the risk of default or any delays in home loan repayments. Suppose you’re unable to repay the loan. In this case, the lender can take ownership of your property and sell it to recover any outstanding funds you owe. The lender retains this hold over your property until you repay the entire loan amount.

If you take out a secured home loan, you may be charged a lower interest rate. The amount you can borrow depends on the property’s value and the deposit you can pay upfront. Generally, lenders allow you to borrow between 80 per cent and 90 per cent of the property value as the loan. Often, you’ll need Lenders Mortgage Insurance (LMI) if the deposit is less than 20 per cent of the property value. Lenders will also do a property valuation to ensure you’re borrowing enough to cover the purchase. 

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.