Info on guarantor

[Brian84]

Thanks for your reply redom and Corey.

Redom I think I will concentrate on the central coast area. If the property needs Reno or maintenance I can go and stay up there because I have a caravan in big 4 caravan park on lake macquarie where we holiday a lot and I also have my in laws that live up there in summerland point.

 

[Marty McDonald]

Central Coast has one of the highest arrears rates in the country. Tread carefully.

 

[albanga]

Hey Brian,

Your in a great position and I agree with all the brokers, definitely pay out the guarantor loan and get started with the remaining equity. As Corey has suggested you should be looking to take this to 90% with the LMI.

I think your goal setting is great, but you could define it even further. A lot of people on the forums say the term "financial freedom" but it means totally different things to different people. My mum could be financially free on $350 a week, I on the other hand would be financially free on $1500 a week.

It also makes the number of properties you own slightly irrelevant (except for diversifying the portfolio) If financial freedom to you is $1000 per week then why does it need to be 10-20 CF+ properties? Why not 5, each $200 a week positive? A lot less hassle and can still spread the risk.

 

[Brian84]

Thanks Marty and albanga.

Albanga- I would like close to 20 properties by by age 40 so then I could sell down half of them and pay out the other loans on the other 10 properties providing they have had good growth, then I can live off the rent of the paid out properties less all the costs of holding the outstanding properties, maintenance, insurance, manager fees etc.

Financial freedom to me is being able to just say to my wife and kids pack the bags we are going on a holiday 2mrw and not have to worry about the cost, or another point is being able to do renos on my property or investment properties without having to borrow the money. Pretty much not have to check the price tag on something I want to buy. It's not really a dollar figure each week it's about not having to worry about money at all and live comfortably.

 

[Peter_Tersteeg]

Rather than work from 20 properties, have an income figure in mind that will allow you lead the life you want. 20 properties is still a very arbitrary statement.

Once you understand the kind of $$$ you'll need, then you can work on a plan to build the investment portfolio that will meet that outcome.

Say you want an income of $100k. You can achieve this with 10 properties delivering $10k each, or 5 properties delivering $20k each.

5 properties are probably going to be in better locations, have better capital growth and attract better tenants. Sometimes less is more.

 

[Brian84]

Thanks Peter that makes sense. I think I would aim for 2-2.5k per week. I think that could be easily achievable from 10 properties.

 

[albanga]

With no target then how can you ever really achieve your goals?
Saying to the wife and kids pack your bags and go is still so vague, go where? Bendigo or Berlin?

Knowing a number and a timeframe defines everything about your property investment journey.

 

[D.T.]

With no target then how can you ever really achieve your goals?
Saying to the wife and kids pack your bags and go is still so vague, go where? Bendigo or Berlin?

Knowing a number and a timeframe defines everything about your property investment journey.

He already specified his target and his timeframe earlier in the thread.

 

[albanga]

He already specified his target and his timeframe earlier in the thread.

A timeframe yes but not a specific target which is why I suggested trying to get a figure in mind. My point being a number of properties is irrelevant to the end goal of "financial freedom". You could own 40 properties if you wanted to but if they had no growth and little cashflow then how does this help you?

If however you set a target of say $1000 per week then you have a more specific goal. You can say I need 10 properties at $100 per week cashflow (after outgoings) or 5 at $200 or heck 3 at $333.333333.