While most kids were spending their days running around the playground, one thrifty eight-year-old was saving up her pocket money to climb Australia’s property ladder.
Ruby McLellan and her siblings Angus (14) and Lucy (13) have been crowned Australia’s youngest homeowners after buying their first property two years ago in Clyde, southeast of Melbourne, for $671,000.
Today, the four-bedroom home is worth just under a million dollars at about $960,000.
Appearing on the Today Show, Ruby’s dad and CEO of property investment company OpenCorp Cam McLellen explained he and his partner Felicity realised in 10 years time house prices would be “astronomical” and the children would have to rely on “the bank of mom and dad” for help.
So Ruby, who was six at the time, and her siblings got to work saving a combined $6000 of their hard-earned pocket money for a deposit by helping their parents around the house and packing their father’s how-to guide to investing.
“We thought it was smarter to buy one property now… and let it double in value.” Mr McLellan told Today Show hosts.
“I control the trust, the structures set up so there’s no fighting amongst siblings. Then we pay the tax, split the profit and the kids have then got enough to get started but not enough to do nothing themselves.”
While Mr and Mrs McLellan covered the rest of the deposit for the house, they say the idea is to guide their children through the process to teach them about “smart investing” from an early age.
“What I did with the kids is we went through step by step on how to pick the best investment. There are 10.6 million properties in Australia so how do you get the best one every time?” Mr McLellan later told News.com.
“I took them through that process which is knocking out capital city markets, which are not good for investment. Then finding the best growth corridor based on the infrastructure, population growth, and supply, and then the optimum size and quality property for that specific area.”
The family says the 200 sqm property is now positively geared, meaning the rent is higher than the mortgage repayments, and it doesn’t cost the McLellans “anything” to hold.
While their names might be on the title though, the children are just beneficiaries of money coming out of Mr McLellan’s trust and don’t physically own the property themselves.
They plan to keep the property until the two eldest, Lucy and Angus, are in their early 20s, which will mean they’ve waited one ‘full growth property cycle’ and hope it will reach $1 million.
Once sold, the children will receive an equal portion of the profit after tax to set them up for future investments, along with a bill from Ruby’s dad for the amount they chipped in for the initial deposit.
