How many IP's would you like to have?

[geoffw]

In some way it is a very limiting question, which if answered and you believe that answer, will limit your growth.

I would hope that everybody anwered 50+ as this answer says 'the sky's the limit', not because everybody necessarily wants 50+ properties but whybuild a limit in your mind.

A very good point.

But is the limiting belief limiting yourself just to IPs?

The Cashflow game looks at property, shares, and businesses- although most businesses come in when one is in the fast track (which is the position you were in).

Even in that game, concentrating on Cashflow- capital gain was very important. It's often a capital gain which gives one the resources to cash up and to buy into the big deals- the ones which get you out of the realm of the tiny little cashflow deals which will take you forever to get out of the rat race.

 

[Jimmyjamjars]

Tranquility

The Perfect Answer.
A lot of thinkers say we are here on this earth to find our reason and that once money is OK aka "enough" we seek enlightenment.

I remember on holiday traveling down the north east coast of Tassie , south of St Helens. Pristine beach beckoned to the left so we pulled over to a side track to the top of a dune. It was around 10:30am and no-one for miles.

Then over the dune I came across an old Hilux with a late 20ish Guy who was sipping a coffee as he read the morning paper. His Dog was running along the beach.

All 50m from the waves.

I apologised for my intrusion but he answered “No Worries Mate" as my wife patted his dog. So we sat on another dune, not far away and enjoyed local cheese we had bought the day before and a cup of tea.

Him, his dog, my wife and I were the only people for miles as we looked east and pondered that the nearest people facing us were in New Zealand.

After the break we went back to the car I said thanks and got talking. I asked what he did. He said he was a chippie (carpenter) from Melbourne. Had sold up in Melbourne and bought that valley over there. Building a shack for wife and me.

I left thinking, regardless of what the world thinks of wealth, power, prestige or status, this guy had made it.

This guy has enough.

Peter 147

10 Points Peter,
This is EXACTLY my view of happiness. When I was reading your post, I could just envisage being there sitting on the dunes and not having a care in the world. Perfect. We just spent a weekend on the beach in our little pop-up camper at Inskip Point and I was in my element. My wife knows that my goal is to simply put a strategy in place where we can afford to travel round OZ indefinitely without money worries. I don't have dreams of jet-setting or living in mansions, just to have a reliable vehicle and caravan and travel, travel, travel. Loved your post Peter, thanks again.
JIM

 

[handyandy]

Hi Geoff

Can't agree more, there are way more possibilities, than just property, to accumulate wealth.

At this point in time we have most classes of investment covered even the art work that was refered to in another post (bought for the appreciation of the art rather than the appreciating value).

Cheers

 

[Glenn]

Hi Penny,

I just want 1......good one, just like the one that sold on Beaufort Street in Perth a couple of weeks ago.

37 room boarding house
0% vacancy
$60pw per room
sale price: $730,000

Do your own sums!

Glenn

 

[geoffw]

I just want 1......good one, just like the one that sold on Beaufort Street in Perth a couple of weeks ago.

37 room boarding house
0% vacancy
$60pw per room
sale price: $730,000

Isn't that, in effect, a business similar to a motel- perhaps with less turnover? One which would require a lot more active involvement than a standard IP arrangement? There may be payments to a manager required, which might cut down on profitability; I'm not sure about items like land tax or rates either.

There have also been new regulations imposed on boarding houses- fire regulations and the like- one would need to know how compliant it was with those.

A motel would typically return a little more than that, though with a more active involvement.

 

[Peter 14.7]

10 Points Peter,
This is EXACTLY my view of happiness. When I was reading your post, I could just envisage being there sitting on the dunes and not having a care in the world. Perfect. We just spent a weekend on the beach in our little pop-up camper at Inskip Point and I was in my element. My wife knows that my goal is to simply put a strategy in place where we can afford to travel round OZ indefinitely without money worries. I don't have dreams of jet-setting or living in mansions, just to have a reliable vehicle and caravan and travel, travel, travel. Loved your post Peter, thanks again.
JIM

Me too. Jimmy Jam Jars.

I enjoying driving but have not really seen a lot of Australia at all. A big trip would be great.

Unfortunately Mrs 147 believes:

"5 Stars is a Holiday, 4 Stars is Camping"

Years of camping as a child wrecked the romance for her.
Peter 147

 

[Glenn]

Isn't that, in effect, a business similar to a motel- perhaps with less turnover? One which would require a lot more active involvement than a standard IP arrangement? There may be payments to a manager required, which might cut down on profitability; I'm not sure about items like land tax or rates either.

There have also been new regulations imposed on boarding houses- fire regulations and the like- one would need to know how compliant it was with those.

A motel would typically return a little more than that, though with a more active involvement.

Hi Geoff,

It would take more active involvement than a standard ip on long term leases, but I feel that once the new owners are comfortable with their leasing system that it would chew up very little time and provide fantastic cash flow with the potential to grow the business incredibly.

Glenn

 

[quiggles]

Hearkening back to the original theme, I too feel that enough is not defined by numbers. That said, I voted for 50+ as by that stage it would be worth having both a front office and a back office. you would truly have a business growing for you. And although one $1 million tenant could sack you (and knows it and has that market power), one hundred $10,000 tenants aren't going to combine to do the same thing.

 

[likewow]

Hi Penny,

I just want 1......good one, just like the one that sold on Beaufort Street in Perth a couple of weeks ago.

37 room boarding house
0% vacancy
$60pw per room
sale price: $730,000

Do your own sums!

Glenn

Thats about 16% gross return which is great for an IP but lousy for a business and a boarding house of that size would be more like a business then a passive IP, so what looks good on the surface probably isnt so great. I could think of better ways to make money with $730k.

As to the original question, i think it matters more the value and quality of your IPs rather than the quantity.

 

[Jerry Maguire]

Hi All,

If you were to buy a few IP back before 1996 for about 650K each
now those few IP that you bought is worth 2 mil each
so does it mean that the few IP that you have bought years ago in 1996 is hard to rent out?

The rent is about 1K per week
I have got no problems renting out my place in the area
cos of corp rentals

Regards
Jerry

 

[likewow]

Hi All,

If you were to buy a few IP back before 1996 for about 650K each
now those few IP that you bought is worth 2 mil each
so does it mean that the few IP that you have bought years ago in 1996 is hard to rent out?

Regards
Jerry

Jerry, Is that a rhetorical question?

 

[Jerry Maguire]

Sorry likewow i'm asking everyone

 

[qaz]

I don't think this question is really relevant. Personally i'm aiming to have the ability to retire comfortably on the median wage (indexed for inflation) in 10-15 years time. But that doesn't mean I will just suddenly stop investing. I'll probably just write a new goal and go for that. So I think some sort of time value is needed to make such a question relevant. Such as "How many IPs would you like to (and aim to have) have in 10/20 years time?".

 

[Glebe]

I want 5 investment properties, but for each property to be a house in Inner Sydney. So in today's values it'd be about $3.5 - $4 mill for the 5. Alot less headaches in my opinion.

 

[Twitch]

I want 5 investment properties, but for each property to be a house in Inner Sydney. So in today's values it'd be about $3.5 - $4 mill for the 5. Alot less headaches in my opinion.

Except that land tax may give you a bit of a headache.

I'm looking to have 2 or 3 IPs in each of the major capital cities to avoid the land tax problem and diversify the risk a bit.

 

[duncan_m]

Except that land tax may give you a bit of a headache.

I'm looking to have 2 or 3 IPs in each of the major capital cities to avoid the land tax problem and diversify the risk a bit.

Land Tax exposure can be managed through owning IP's in a variety of different entities. Individual names, trusts etc..

I dont know about other states, in SA you can even have 99% of an IP in one name and 1% in a trust name and that successfully removes that particular IP from the Land Tax calculation as its the combination of owners names that makes is used to generate the Land Tax bill..

 

[Amarantha]

Enough to generate a comfortable income

 

[keithj]

I'm feeling a bit controversial this morning, so can you add an option for NONE.

I see IPs as a way of getting growth, but an inefficient way of getting income. On retirement I want income indexed at more than inflation and no headaches. So I say sell the lot and put the funds into Listed Property Trusts, a basket of high yielding blue chip shares and Listed Investment Companies.

Just think about never worrying about interest rates, dodgy tenants, insurance claims, vacancies, slack PMs, land tax, depreciation schedules, banks calling in loans, paperwork......

KJ

 

[WillG]

How many IP's will I need to retire ?

I would like to acquire another 3 IP's within the next 10 years in areas I currently know well. I see this as a short to medium term goal to give me 'semi-financial independance'. I suspect I may have new goals & priorities in 10 years.

 

[kissfan]

I'm feeling a bit controversial this morning, so can you add an option for NONE.

I see IPs as a way of getting growth, but an inefficient way of getting income. On retirement I want income indexed at more than inflation and no headaches. So I say sell the lot and put the funds into Listed Property Trusts, a basket of high yielding blue chip shares and Listed Investment Companies.

Just think about never worrying about interest rates, dodgy tenants, insurance claims, vacancies, slack PMs, land tax, depreciation schedules, banks calling in loans, paperwork......

KJ

This is what I was hitting on when I posted a bit earlier on in the thread, except I think (at this stage) by keeping a few I/P's gives a few options for later on. The only concern I have in regards to selling any (or all) of the I/P's is the capital gains tax that would apply. There has to be a better way, but agree in principal with Keith that a different approach to keep the cash coming in with less headaches might be more viable

Regards
Marty