Tradie turned buyer’s agent Jordan Veleski purchased a $370,000 investment property for his young daughter Florence. (Source: Supplied/Jordan Veleski)
A Sydney three-year-old has become one of the youngest landlords in the country, owning a $370,000 investment property before she has even started primary school. Aussie parents are increasingly worried about how their kids will afford a home and it’s prompted one dad to take an unconventional approach to give his daughter a head start.
Jordan Veleski and his wife, Kaitlin, bought their daughter, Florence, a two-bedroom unit in Melbourne’s Footscray in August last year. The Western Sydney couple received a hefty $25,000 in gift money from family and friends for Florence’s first birthday and christening, plus chipped in another $30,000 of their own funds to buy the investment property.
The former electrician turned buyer’s agent, told Yahoo Finance, that some 150 people were invited to the christening.
“I come from a Macedonian background, so just ethnically we do big christenings. So you spend what you can,” he said.
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“We got a fair bit of money back from godparents and grandparents, and we sort of pulled it together. We also did a first birthday, and people gave a little bit extra.
“When we counted it, we were blown away by people’s generosity … So that’s when we came up with the idea.”
When Veleski turned 18, he recalls his parents also gifted him around $30,000, which had been accumulated from birthdays and christenings over the years. He put it towards buying his first home a few years later.
Jordan and his wife Kaitlin used Florence’s gift money from her christening and first birthday, along with their own funds, to buy the apartment. (Source Supplied/Jordan Veleski)
Veleski, who is now 37, said he was extremely lucky to have gotten this gift from his parents, but knew he had to take a different approach for his kids rather than the same “old school” method.
“I said to my wife, we have to come up with a different way to make money or to get our kids ahead because the way things are going with property, and I see it day in day out, just that $30,000 at 5 per cent over the next 20 years is not going to keep up when you leverage it with property,” he said.
He believes it has “100 per cent” become harder for younger generations to buy their own homes in Australia.
“What’s happening right now is so wrong, the cost-of-living crisis is so bad. So I’m just trying to find ways for my kids to be able to buy something in the future. And that starts with me,” he said.
The property was purchased for $370,000 in August last year and has recently been valued by the bank at $415,000. (Source Supplied/Jordan Veleski)
The Flo Buyers Agency founder strategically chose the two-bedroom Footscray unit for its price point and location, with the property near the new Footscray hospital and close to the CBD.
The property was recently valued at $415,000 by the bank, representing a $45,000 growth in 14 months.
It is rented out for $470 per week at a 6.6 per cent yield and is neutrally geared, meaning it costs the couple nothing to hold for their daughter.
The plan is to have the apartment fully paid off by the time Florence turns 25 and benefit from capital growth.
While the property has been purchased in the couple’s name, they plan to sell it in the future, pay the capital gains tax and give the remaining amount to Florence. She could then use the cash to purchase a home to live in herself.
The couple also have an 18-month-old son, Jordi, who they are planning to do the same thing for.
While it’s a unique strategy, Veleski isn’t the only parent who has bought their kids a property while they are young.
Northern Beaches couple Mark and Alana previously told Yahoo Finance they bought their four-year-old daughter Willoughby a $1 million one-bedroom apartment in the suburb she was named after.
“I wanted to try and do something now so that no matter what happens to me, there will be something for my daughter one day,” Mark said.
Ray White Lower North Shore director Tim Abbott said it definitely wasn’t the norm for parents to be buying their young kids property. But he was seeing many looking for ways to give their kids a head start in the property market.
The couple hope to repeat the same strategy for their 18 month old son, Jordi. (Source Supplied/Jordan Veleski)
“We’re seeing a mix of people that are older in their 20s, getting a bit of a hand from their parents, maybe for a deposit or just to get started,” he told Yahoo Finance.
“And other people that are younger buyers, buying it in their own right, but just having it as an investment and sort of paying off a bit of the mortgage until they’re in a position to move into it as their principal place of residence.”
Mozo research found parents were gifting $74,040 on average to their kids to help with home loan deposits. Three in four parents who help their kids don’t expect to be repaid.
Australian Seniors research, meanwhile, found seven out of 10 parents over 50 intended to leave their children an early inheritance to help them get ahead.
Veleski admitted he hadn’t even told his mum about the unconventional property purchase yet.
“I haven’t even told my mum that I’ve done this, she would flip it because they come from an old school generation of work, save, put in the bank,” he said.
“Well, you can’t do that anymore because work, save, put in the bank, by the time you do that the house prices just went up $5,000.”
Cotality data released this week showed national values rose another 1 per cent in November, with the median dwelling value now $888,941 across the country.
Sydney dwellings are now sitting at $1,269,659, while Melbourne is at $823,495 and Brisbane is at $1,015,767.
Veleski acknowledged the strategy wouldn’t be for everyone, but could suit people who wanted to help their kids now rather than wait until later in life.
“This is for people that they want their kids to live close by to them, or they want their kids to have a big chunk of money while the parents are still alive,” he said.
“It’s not for everyone.”
Veleski noted he used some equity that had been withdrawn from his property portfolio to help fund the purchase.
He said it was important for people to educate themselves and speak to experts in the field if they are going down the route of purchasing an investment property.
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