ABOUT MARK & MARGARET WACHNIK
- Occupations: Self-employed (commercial office fit-outs)
- Age: 50 & 44
- Family: Two teenage boys, 11 & 15
- Began investing in residential property (year): 2000
- Property portfolio value (including principal place of residence): Approx $8 million
- Number of houses you own (including principal place of residence): 13
Mark and Margaret Wachnik own their own home and have built a portfolio of 12 investment properties in just ten years.
Mark and Margaret lived with Margaret’s parents in south Sydney until they had saved up enough money for a deposit for their first home. In 1989, they bought a house and they were determined to repay their loan as quickly as possible.
“We lived very plainly,” Margaret explains. “We didn’t take holidays and we often just took sandwiches to work. We had second hand furniture from St Vincent de Paul’s and some of the rooms were unfurnished for many years. Any money we had went on the mortgage. We paid it off in five years – even with the interest rate at 16.5 per cent.” Three years after being debt free, the Wachniks had no savings. They were spending everything they earned so they decided to buy something and pay it off. They borrowed money to buy some land for their dream home and to buy Margaret’s father’s small goods manufacturing business.
They made these decisions without financial advice because they didn’t know anyone they could turn to. Margaret decided to read some books on personal finance. One of those books was John Fitzgerald’s Seven Steps to Wealth. It made complete sense.
Margaret says, “It was the first time we understood we had to think about our financial future. And it was the first time we’d heard about passive income and what are true assets. We were always looking for other sources of income and we decided that property was for us.”
In 2000, Mark and Margaret attended a Custodian seminar and soon afterwards they purchased two investment properties in Brisbane. A few months later they bought a third, also in Brisbane. In 2002 during the boom, they bought their fourth property in Brisbane and in 2003 their fifth in Western Australia through their private superannuation company.
Buying the first two properties was a great start but at that early stage of their wealth building journey, they didn’t understand about securing an 80 per cent loan, negative gearing and tax advantages. Instead, they sold their land to help finance the houses, paying a 50 per cent deposit on each. They treated the houses as if they were their principal place of residence and wanted to pay them off quickly.
It wasn’t until later, when they had a meeting with John Fitzgerald that they understood they had plenty of equity to duplicate. Furthermore, by owning positively geared properties and working in professional jobs, they were paying more tax than they needed to.
While they have the right loan and taxation structures now, they still save the 20 per cent deposit for each new property. “We just can’t bring ourselves to use the equity in the houses,” laughs Margaret.
In 2008, Mark and Margaret bought their new home with water views on Sydney’s lower North Shore. In 2010 they moved in and renovated.
The Wachniks like property as an asset class because it is tangible and they have control over it – and they also saw how much the value of their own home had increased over the years.
Mark and Margaret have been on an incredible journey and they have achieved more than they imagined.
They consider themselves to be on a personal journey just as much as a financial one.
“Our family think we’re lucky to be in the financial position we’re in now but they don’t realise how humble our beginning was,” says Margaret.
Mark and Margaret want to pass their wealth building knowledge onto their sons so they can start earlier in life and take advantage of time in the market and compound growth.
Custodian Reviews – Read more success stories from average individuals who rose above the average!
*extract from Custodian Millionaire Case Studies magazine printed in 2012.