How many properties to retire?

I agree, especially considering how much has happened since 2003 - meteoric rises Perth, low interest rates, GFC.......it would be interesting to find out what everyone is doing now.
 
...refreshing to read a thread where detailed property numbers are spoken of, calculated and logical reasoning backing up the calculations. Even mods and admin staff getting in on the conversations with calculations and heaven forbid - numbers.

Doesn't happen any more. Everyone has been scared away by the John Deere harvesters patrolling.

7 years on and the vast majority have all disappeared....
 
Only one good one.
We don't have ones that good here - so two average ones for me!

Caveat being they are paid off, of course. I have rent on one property about $60pw short of covering two mortgages at the moment, but that is SO not retirement. If we keep our current house, later this year we'll be overall positively geared with 2 IPs paying for themselves and PPoR but not much more, because of debt.
 
I had always had it in my head that when i retired i would sell a couple of ips to pay down the debt of the others and live off the rental income. Now im not so sure this is the way to go!

I would have to:

1. Pay capital gains tax
2. Pay tax on my rental income

I'm thinking about the possibility of holding onto all my ips, not ever selling (unless its a dud) and not pay down all the debt ever ..... just...keep my lvr low. I should still get a good income after paying for the ip related expenses and loan repayments.

The cashbond idea is another option. Especially to help with serviceability later on in the future. Dont know enough about this strategy in regards to using it as an income stream to live off. Dunno if it would work for me. But may think about it in the future.

I just need to find a way of writing up my plan. Do the cals to see how it will work for me. I need to write up a hypothetical 20 year plan.
 
I had always had it in my head that when i retired i would sell a couple of ips to pay down the debt of the others and live off the rental income. Now im not so sure this is the way to go!

I would have to:

1. Pay capital gains tax
2. Pay tax on my rental income

I'm thinking about the possibility of holding onto all my ips, not ever selling (unless its a dud) and not pay down all the debt ever ..... just...keep my lvr low. I should still get a good income after paying for the ip related expenses and loan repayments.

The cashbond idea is another option. Especially to help with serviceability later on in the future. Dont know enough about this strategy in regards to using it as an income stream to live off. Dunno if it would work for me. But may think about it in the future.

I just need to find a way of writing up my plan. Do the cals to see how it will work for me. I need to write up a hypothetical 20 year plan.

I like how you think.
One thing I would suggest, though, is that the cashbond strategy isn't really to fund living expenses. It's more a way of creating an income stream out of equity.
I'm already committed to a strategy similar to what you have proposed. If it doesn't work, the worse that can happen is that I go back to Plan A and sell some IP's. CG tax won't be too much of an issue as I won't have any income, anyway, so my marginal rate will be as low as it gets.
 
Pft, plan. Who plans these things! They just happen!

My only plan for this year is to get as far into building a 4br house as possible, do whatever the bank says is best with the old house, and try not to get toooooo many kilos over 65 :)
 
I like how you think.
I'm already committed to a strategy similar to what you have proposed. If it doesn't work, the worse that can happen is that I go back to Plan A and sell some IP's. CG tax won't be too much of an issue as I won't have any income, anyway, so my marginal rate will be as low as it gets.


CG tax won't be too much of an issue as I won't have any income, anyway, so my marginal rate will be as low as it gets.

What do you mean by this exactly? Will you keep buying to ensure you pay minimal tax? I keep hearing that when people are becoming too neutrally or postively geared they say they must go out and buy another ip so as to keep paying too much in tax? I need to learn more about this. I think im just starting to see the big picture in all of this.



I guess..... if i do go down the road of selling a couple off at the end. Say if I had accumulated 13 properties sold 3 off and were left with 10 ips.

In todays dollars if the 10 ips were worth $250 K each = 2.5 mil

10 unencumbered ips with a rental income of 12 K pa
= $120 K pa rental income

120 k rental income - minus tax of 40% - minus ip related fees of ? %
$48 K tax

$72 K net rental income (minus other ip expenses)


Seems like a hell of a lot of tax to pay. But then again if I were able to end up with an income of $72 K net pa I think i would be very happy and comfortable on that!! I'm currently on $35 K net pa. My goal is to aim hard at doubling my income. If I try my hardest and dont quite make it I will still easily have a higher income than what im on atm. I'm determined to get to $75 K mark.
 
What do you mean by this exactly? Will you keep buying to ensure you pay minimal tax? I keep hearing that when people are becoming too neutrally or postively geared they say they must go out and buy another ip so as to keep paying too much in tax? I need to learn more about this. I think im just starting to see the big picture in all of this.

No, I meant that as I wouldn't have a PAYG income.
True, over time, the properties may become positive geared, or even cash flow positive.
But, if you keep cashing in the equity to pay for living expenes, then you end up negative again with the increase in interest costs.
Even if I pay tax on rental income and income from other investments I won't complain. Nobody ever went broke making a profit.
Funding my desired lifestyle is far more important to me than anything. Tax is just another factor in the equation to be managed.
 
Easy question for me to answer...

8 properties owned outright.

PPOR owned outright.

About $1M in Australian shares.

Should make around $175K per year pre tax. Splitting income 50/50 with the wife, and having some deductions, should get us to about $125k per year after tax. With no PPOR debt, should be enough for a very nice lifestyle.

(All in 2010 dollars).
 
except when it's vacant for 6 months or more.........

I was going to say the same thing.

Depends on the tenant/lease of course, but I would prefer at least say 3 CIPs or 1 CIP with 3 different tenants in the same building...
 
100 unencumberd would be a nice start!

:)

As you get to your goal, most people get addicted and the line moves outwards, unless you have a mentality where the tide goes out and your line goes down to meet the water. I like the thought the tides rise and my line goes futher towards suburbia (and no not so mt druitt become waterfront property either) :)
 
except when it's vacant for 6 months or more.........


Or can't refinance the commerical loan, been down this road.

Like any investment there is negative and positive. Why not spread the risk go resi, CIP, shares and whatever suits your fancy. Let's get real, what is the perfect investment??

I am not interested in those who want to blow their trumpet on one particular strategy, it's bores me s...less.

MTR
 
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Owning 3 IP's outright, "very simply" rental from one would pay your tax, rental from another would pay your living costs and the other would pay your mortgage or rent

All indexed to inflation

Who would stop at 3 though or not leverage beyond that outlined ;)
 
except when it's vacant for 6 months or more.........

a good CIP wouldn't sit vacant for 6 months. The one I observed last year that became vacant at the height of the GFC was immediately relet with a blue chip tenant that invested a 6 figure refit at their own expense. The CIP vacancy is a risk, but so too are tenant trashings, annual vacancies etc in resi.
 
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