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When You Build A Portfolio With A Sister

Sharing properties with family can come with unique challenges, but with planning it can be hugely successful, writes Stevie Waring.

By: Stevie Waring

31 July 2023

An unexpected divorce inspired sisters Christine and Miriam to start investing together. But things soon got complicated. Christine’s husband and Miriam’s new partner also joined the investment portfolio.

Here’s how the sisters relied on each other to grow their wealth, and some ways they negotiated the logistics of it.

The Investors

Miriam, 30, bought her first investment property at 21 with her parents for $217,000. To her, getting on the ladder early was important. This was because property seemed to be the most reliable fail-safe for other options in life.

But when her parents divorced in 2016, Miriam faced a dilemma. Her parents needed to sell up to go their separate ways … but she didn’t want to give up her investment.

So, sister Christine, 40, and her husband bought the parents’ share. At that time the property was valued at $240,000.

The sisters now co-owned the property with Christine’s husband.

But what happened next was unexpected. After laying flat for about 12 years, the Wellington market went nuts. The $240,000 property ballooned to $850,000. It was time to use that equity towards more investment opportunities.

How Many Properties

The trio continued to buy several investment properties in the following years, but their investment plan was a bit ad hoc. They didn’t have a solid plan per se … it was more about trying a few things to see what they could get.

This led them to a seminar hosted by Opes Partners where they listened to Andrew Nicol talk about how to build a retirement strategy through new builds.

The sisters went on to buy a two-bedroom townhouse in Christchurch (which has gone up about $100,000). They are also planning to discuss their current portfolio this summer when their interest-only period ends.

Keeping It Personal

Sharing properties with others can come with unique challenges.

Even though Christine doesn’t expect to become estranged from her sister, or divorced from her husband – sadly, these factors can’t be ruled out either. And no-one can rely on reaching old age without encountering an illness or an accident.

This is why Christine says she only owns 1.5 properties. Sure, it’s a different story when looking at the joint wealth (which is six properties and some land) but none of the trio want to hinge their financial future on anyone else.

So, using Opes’ Wealth Plan software, they all created individual and joint plans. They also created a worst and best-case scenario.

In the worst-case scenario (death or divorce), they are going to have more money than they could ever spend. But the best-case scenario is they get to live together forever.

So, even if you do choose to invest with family, you still want to be creating your own individual wealth plan. Sure it sounds complicated, but Christine says that’s only a problem if the accountant can’t figure it out.

Future Plans

Christine and Miriam feel as if their time of investing together may be drawing to a close. This is because owning several properties with many people restricts the ability to grow wealth.

Initially, the choice to invest together was practical – because they didn’t have the start-up investment to get the ball rolling. Now, somewhat ironically, it’s starting to become something that’s holding them back.

Financially, the sisters are now privileged enough to do it separately.

Next Steps

Christine and Miriam’s experience might resonate with a lot of homeowners. Maybe you started out investing with others, but now you feel a bit stuck and want to start your own portfolio.

There are always options for you.

If you want the same service as Christine and Miriam, your next step is to book a Portfolio Planning Session with us here at Opes Partners.

Disclaimer: Just remember this is a column in a magazine, going out to thousands of people. It’s not personal financial advice. But, it is an example of what can be achieved with personalised financial advice. If you are wanting to book a consultation, email us through the website at https://www.opespartners.co.nz...

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