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The bank manager told me that it was policy not to lend to someone over the age of 70 (from memory) if the security was the family home. The reason being they did not want to be in the position of forcing pensioners out of there homes if they defaulted. If the security for a loan was a non PPOR...

Yes it probably would be feasible as long as the loans are covered by rent ie cashflow neutral. The PPOR worth $1Mil does not really come into the equation.

That would work, horses for courses. I am more comfortable with property. Traditional LOE may be similar to a Reverse mortgage, but thats not what is being suggested. Exactly. Sell one every 2 years and live of the proceeds. Just replace the one thats sold with another.

Dredfern, that sounds about right. Obviously $44k after tax is not a huge income, but far better than the pension. So to increase the amount, buy dearer properties and/or more of them. We have now decided on 8 properties and buy/sell every 2 years. We will sell the first property next year...

Exactly Rixter. As a whole, the portfolio is neutral or positive geared. I have modified my plan a little so I will next year have 8 IP's. This means I can sell one and buy another every 2 years giving 16 years growth every 2 years.

Banks require 2 things to lend money. A deposit or equity, and income. The portfolio grows over time to give the equity. The proceeds of a property sale is placed into an annuity which the banks class as income.

We are getting close to our next phase and will start LOE probably next year. I have done a spreadsheet that covers all sorts of scenarios, interest rates , inflation, capital growth, it still works. Recently I have been checking with banks about putting proceeds into an annuity to qualify...

Yes Rixter, thats about it.

It depend on how it is structured. By placing the proceeds into an annuity or similar (lots of other posts explaining this) the bank will accept it all as income, but ATO only charges tax on what the capital earns.

Yes there are costs, but they are not too much when looking at the overall picture. About $20k buying and selling costs plus cgt. Borrowing equity is not tax free money. The tax does not have to be paid till the property is sold, but one day it must be paid. So it is really just defering the...

I like it. It's very close to my idea of buy a property every 3 years. After 15 years you have 5 properties. Then buy another and sell the first property. Repeat every 3 years. It gives you an income of 15 years growth every 3 years. If you bought in 1985 for $100k, it would...