How many Ip's needed to retire? (I am a bit shocked!)

[BayView]

There is no way I would ever purchase something for $200k that rents for $160pw.

What amazes me is that there are people who do it all the time, and do it with properties of twice the value and more (rent increasing proportionately - but still cr@p), and the agent tells them "this is a good rent return for this area" and the punter believes that.

 

[skater]

so until rents catch up to the recent capital growth spirt, and cover more of the cash outgoings, i would say the idea of 10 IP's for the average wage earner is not likely.

All I can say is "Perceived reality is reality to the perceiver."

There are plenty of investors that have 10 or more IP's.

Sure not everyone does, but take a look around. Look at the polls that forumites have posted previously on number of IP's. You also don't have to go to country areas to get a higher yield than 3%. I would suggest that if the best yield you can get is 3%, then maybe you are buying at the wrong time in the cycle.

 

[skater]

What amazes me is that there are people who do it all the time, and do it with properties of twice the value and more (rent increasing proportionately - but still cr@p), and the agent tells them "this is a good rent return for this area" and the punter believes that.

I know! I see it all the time.

What a lot of investors fail to realise is that you need to get a good rent return. If you don't, not only are you tied to something that is bleeding you dry, you are also hobbling yourself so that you physically can't buy more properties.

Many of these will be the ones who will only ever have one or two IPs. Then they sell out because they didn't make any money, or they are bleeding hearts to their tenants and let them stay for years on below market rates because "they're a good tenant".

 

[Gremlin]

Yeah I think most people's "plan" around these parts - if the plan is to live off "rent" - is to either buy shares or commercial property for cashflow, cashflow sucks with IP's.

I completely disagree. What I do think is fair is that yields suck at current prices. Ergo, don't buy for yield at current prices.

I bought a bunch of free-standing inner-city ring above median properties in the mid-90s which were yielding over 10% at the time. Cashflow on them is great and has been since day one.

 

[skater]

problem with property is the ability to keep buying.

so until rents catch up to the recent capital growth spirt, and cover more of the cash outgoings, i would say the idea of 10 IP's for the average wage earner is not likely.

Here is another example of someone who has a good yield and has bought more than one or two (presuming, of course, that "a bunch" means more than two) in a city. I'm betting he did not sacrifice CG for cashflow either.

I bought a bunch of free-standing inner-city ring above median properties in the mid-90s which were yielding over 10% at the time. Cashflow on them is great and has been since day one.

 

[Rixter]

i would say the idea of 10 IP's for the average wage earner is not likely.

Hmmmmm how strange...Today Im an average wage earner and its not stopping me. I actually started out way below the average wage.

CC its just 'your belief pattern' formed from your life's experiences since birth that suggests otherwise.

Success is 80% correct mindset x 20% applied strategy.

In other words, what/how you think is FOUR TIMES as important than the way you use choose to do it.

Hope this helps.

 

[skater]

Hmmmmm how strange...Today Im an average wage earner and its not stopping me. I actually started out way below the average wage.
.

That's the point I was trying to make. We started out self employed with an income that was almost half the average at the time. Today we have only one wage earner, unless you call the $100pw that I make an income, and invest mainly in Sydney. Not stopping us either.

I would suggest instead of saying "I can't do" something, changing it to "How can I do" something.

 

[Dazz]

Success is 80% correct mindset x 20% applied strategy.

So success is 0.16 of something ??

what/how you think is FOUR TIMES as important than the way you use choose to do it.

In the words of "Rixter", have you got an ABS link for that data. I've seen those numbers lolled about by many, but never seen the raw data from a definitive source. Where did you get the figure 4 from ??

 

[Ausprop]

a seminar with a man wearing a big hat. 7 years was mentioned as well, or was it 10?

 

[chrispy]

We were on way below average wages but still managed to end up with 16. I agree with the others its not can I do it...but how can I do it.

I have sold down now, live off rents of 7, with cash in the bank to draw on when replacement equipment, repairs, etc is required and to fund my constant travelling

It can be done.

Chris

 

[MCS_80]

Whats the "average" Australian income these days anyway?

Im thinking the last time I was told it was $50K+

Anyone care to confirm this?

EDIT : just did a little search and it seems to be $57,000 PA or there abouts.

Bloody hell, I wish I was "average" hahaha. Im well under that mark, single income with mortgage and one kid. Do I have no chance ?!!!

Cheers

Mick

 

[skater]

MCS, where there is a will, there is a way. Sure, you may not buy vastly expensive properties with low yields, but if you want to invest, then you can. You may find that you have to look outside your immediate area to do it (we did), but if you really want it, it's possible.

When we started, or meagre income (self employed) was supplemented by Centrelink, because it was so very low. It was hard, and finding a property that we could afford was somewhat difficult, and convincing the banks was another storey altogether. But we did it! Incomes can (and do) improve over time, and rents increase, so this makes it a little easier.