How eight-year-old became ‘Australia’s youngest homeowner’

The family behind “Australia’s youngest homeowner” reveal how the eight-year-old secured a four-bedroom house while still in primary school.

Most kids would have a hard time understanding what terms like “property investment”, “landlord” and “positive gearing” mean.

But for eight-year-old Ruby McLellan, they represent years of saving her pocket money and saying no to toys and treats to earn the title of “Australia’s youngest homeowner”.

Ruby and her siblings, Angus, 14, and Lucy, 13, purchased their first property together 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.

The siblings 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.

Their dad, the CEO of property investment company OpenCorp, Cam McLellan, said kids today will need the “bank of mum and dad” to afford property – which is all the more reason to get started at an early age.

“The sooner you can get started the better because property prices will only continue to go up because we’ve got a huge under-supply of housing in Australia,” Mr McLellan told news.com.au.

“The skilled migration is increasing continuously so the long term under-supply is going to continue. The sooner a young person can get into the property market, the lower the deposit they have to save.”

Ruby and Cam McLellan appeared on the Today Show to discuss the strategy. Picture: Supplied

While Mr and Mrs McLellan covered the rest of the deposit for the house, they guided their children through the process to teach them about “smart investing”.

The 200 sqm property is now positively geared – meaning the rent is higher than the mortgage repayments and it doesn’t cost the family “anything” to hold.

“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 asked.

“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.

Ruby was six at the time the property was purchased. Picture: Supplied

“So while the Today Show appearance was about me just giving a deposit to my kids, the whole concept was about teaching them the process of smart investing.

“Ruby is surprisingly [knowledgeable] for an eight-year-old, the other day she asked me about when you sell the property, how much money is left over and I was explaining to her tax requirements to be paid and those sorts of things. Even as an eight-year-old, she’s getting a grasp of the concept of buying and selling property.”

The under-supply of housing in Australia means it’s better to get into the market sooner than later. Picture: Supplied

The family will 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.

Currently, the children are beneficiaries of money coming out of the trust and don’t physically own the property themselves, although their names are on the title.

Mr McLellan told news.com.au he pieced the strategy together from lots of lunches with “other grey haired investors” and wanted to pass on the knowledge to his kids.

Mr McLellan wanted to pass on his investment knowledge to his kids and other Australians. He encouraged readers to pick up a free copy of his book. Picture: Supplied

He decided to write the best-selling book My Four-Year-Old the Property Investor and shared his best advice for fellow young prospective buyers.

“It’s obviously daunting for young people to save that huge deposit. Break it down into bite-sized chunks of things you can do, so ‘how much can I save in the next three months’ and set yourself small goals to achieve, rather than going ‘I’ve got to save $120,000’.

“The last one is, young people will have to sacrifice. The spending of young people nowadays is astronomical compared to 20, 30 years ago when I was growing up.”

“I never went to a cafe till I was 25, I sold my car and rode a bike for nine months to get my first deposit so the sacrifices are real that you have to make. I was working two or three jobs and so was my wife,” he added.

“If people want to get into the property market, just lock away for a couple of years and just work your absolute butt off with one single focus in mind.”

Originally published as How eight-year-old became ‘Australia’s youngest homeowner’