Nearing retirement, Robyn bought an investment property

Robyn Cott had a retirement plan – she would rent out her investment property and pay off her refinanced mortgages quickly while earning two income streams.
Peter Gearin

Robyn Cott had long-held plans to retire to the country. The 54-year-old accountant from Richmond, in Sydney’s northwest, craved a quieter life on the other side of the Blue Mountains. She has a close friend with similar ideas.

“I’ve always wanted to retire to the bush somewhere,” Cott says. “[My friend and I] have been looking at places to live over the years, and she eventually settled in Portland. I intend to settle there myself one day.”

Portland is a lovely little village near Lithgow. Once known as the home of Australia’s first cement works, it’s now famous for its old-world charm and Australiana period signage. “It’s the sort of place we wanted,” she says. “It took us a while to come to that conclusion but we found it eventually.”

Cott’s heart was set. So within sight of retirement, the accountant did something for the first time in her life – she bought an investment property.

“I had a significant amount of equity in my principal residence [at Richmond] and I’d been reading a lot about using equity to buy an investment property,” she says. “As part of the process, I went through uno to refinance my home loan and use some money to purchase an investment property.”

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Retirement focus

Her plan was simple. She would live in Richmond and continue working full time while renting out her Portland investment property, which she bought for $215,000. She would pay off her refinanced mortgages as quickly as possible while earning two income streams.

Cott admits it wasn’t easy to find a lender prepared to enter into a 30-year mortgage with someone close to retirement age. She says uno home loan adviser Carlo Monzo helped find the right lenders for her situation.

“My principal place of residence is with AMP and the investment loan is with Pepper,” she says. “Carlo suggested Pepper ­– it was our second choice – the first one made life difficult. Pepper had no problems lending me the money, and that was a deciding factor. But we didn’t just go with them because they would approve me. Even though I may have ticked their boxes, they ticked my boxes as well.”

She considered going for an interest-only loan, but quickly concluded it would be a bad idea (and the uno team has created a calculator* *that proves this). “I had my mind set on the loans being principal and interest,” she says. “My plan when I retire is to sell my home and be mortgage-free in my retirement … I want the balance of both loans to be as low as possible.”

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uno’s role

Cott says Monzo and the whole uno team made it so much easier for her to make the right decisions. “There are so many factors in this whole process … outside factors that are out of your control,” she says. “No one seems to have urgency about them any more. Even though we kept hitting barriers along the way and spent a lot of time waiting, uno always kept up the communication.

“If someone wasn’t there, there was always someone else who could help you, so you didn’t have to explain the whole story again. I loved that if Carlo wasn’t there, then Annette was there. And if Annette wasn’t there, Geeta would be there. You never felt like you were just another number.

“I couldn’t fault them. I’d recommend them to anybody. It just felt personal.”

Cott admits she’s not your typical property investor, and that it wasn’t an easy decision to enter into an investment loan so close to retirement. She says that she just wants to make the most of her situation. “I haven’t bought [this Portland property] to get a high rental return. I’ve chosen it for personal reasons. I’m not doing it to make money just yet – maybe one day I will – but that wasn’t the purpose of it.

“[If didn’t buy it as an investment] it would’ve been the same outcome. I would’ve sold my home, paid off my mortgage and used the balance to buy a house in Portland. It would’ve been the same. I’ve just done it five or six years earlier.”

What to do next

Property investors have two options to get started in optimising their financial outcome.

The information above is general in nature, and you should always seek professional advice when making financial decisions.

Peter Gearin
* Three year fixed rate, owner occupier, P&I loan with a maximum LVR of 95% and a loan amount >$150,000. Lender rates and products may change. We cannot suggest you remain in or switch to any loan until we complete our assessment. Fees and charges apply. ^ WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rate is calculated on the basis of a loan of $150,000 over a term of 25 years. ± All loan applications are subject to uno assessment and lender approval. uno does not guarantee that it will be able to find a customer a better loan than the one they currently have or to save them money.