I've got no long term strategy...

[Tim86]

Summary (for those that don't want to read the long details): scenario $432 000 equity, $100 000 income incl current positively geared properties and my job. What's the next step? Goal: get a total of $100 000 per year income through property investments.

More details:

Okay so in 12 - 24 months from now my short term plan will be complete I will have:

PPOR worth $680 000, mortgage $412 000 rental return (4 rooms downstairs rented seperate) $560 per week profit
IP 1: worth $550 000, mortgage $436 000 rental return $200 per week profit
IP 2: my half worth $210 000, mortgage $160 000 rental return $100 per week profit

I'll rent out downstairs of my house until we have our second child, and then I'll need the extra space and have to kick out the tenants so will lose $560 per week profit from the rent. So that will probably be in 3 years.

My income will be $83 000 gross in 3 years as I will only be working 4 days per week. Rental income will be around $350 per week profit in about 3 years. So all my income gross will be $101 300. I will have 2 or 3 years there where the downstairs rent will see my gross income hit $130 420

So the question is what do I do in 3 years time? Do I just keep doing what I've done already. Or am I in a position to do something better?

I have the skills to be able to renovate houses myself, I can do bathrooms, kitchens, flooring, etc... all of the above.

I could keep going with my current strategy, find a renovator, do it up, rent it per room, bring in $200 per week profit on each place with rent all positively geared. Each place would have an average of $60 000 capital growth after reno costs etc... I could hold each property until rent supplements my income?

BUT that's 8 more properties to replace my income!

Is that what it's going to take?

Anyone have any better ideas?

I'm almost wondering if in 3 years I'd have enough equity to buy a boarding house. I've seen ones go for $1.15 million that brought in $180 000 gross per year. Knock $40k off the top for bills, you still have a really good return if you self manage.

Or should I start splitting blocks and making money that way through capital gains?

Anyway any ideas are appreciated

 

[Dazz]

Neither did I for the first 20 years.

Doesn't matter a jot. Never met someone who meticulously planned out their life over 20 years, then proceeded to work the plan with not a single road bump encountered.

Anyone who can sit at the bottom rung of the property ladder and meticulously plan what they are going to do and how they are going to do it when they get up to the upper reaches of the property ladder......well, it just ain't gonna happen.

You won't even remotely find out what it is like on step 7 until you have completed step 5 and heading towards step 6.

Ignore anyone who says they planned it all out before they started and it's all fallen exactly into place.

Head down, bum up, keep going. Good luck.

 

[D.T.]

I'm almost wondering if in 3 years I'd have enough equity to buy a boarding house. I've seen ones go for $1.15 million that brought in $180 000 gross per year. Knock $40k off the top for bills, you still have a really good return if you self manage.

Sounds like buying a full time job to me

 

[BMan]

totally agree Dazz
everywhere you go everyones telling you to u have to plan it out and work backwards, how the hell can i do that when i dont know what i need or when i need it
and even if its worked out whos to say i can buy it when i have to buy it

i have been stuck on this so called step so i figured i would just bypass it

do what comes along and hope it gets you there, sure you do need to have an idea of what you want/need to do but work it out along the way

my plan is to semi retire at 40
how am i going to do that... i have no idea. my rough plan is to buy resi until i can get into commercial and hope that i make the right choices so i can supplement/increase my wage and hopefully make it easier on myself (going to commercial)

 

[ok180]

As other have said it's impossible to plan something out 20 years in advance because circumstances change. All you can do is concentrate on a goal (in your case lifestyle and a dollar figure per week) and play the game as the cards are being delt to you over time.

 

[K_Raheja]

i had heard the following in one seminar ( tony robbins type )

" make a goal and a plan to achieve the goal.......then forget the goal and focus on the daily/weekly plan"

i like the idea of working on the delta ( in terms of cashflow $, # or props, loosing x kg per y months etc )...i can dupe my mind to be disciplined...

 

[Tim86]

Thanks, that does put my mind at rest a little bit. I guess I'll just see how it goes

 

[LoneWolf]

mate, you are doing well compared to the rest of the 95% we have on this land, so keep going bud!

Follow your gut! (that's what I been told anyhow)

 

[TMNT]

personally, I think planning is the most ridiculous thing ever!

nobody knows whats going to happen, especially those stupid excel spreadsheets with 100 numbers of your ip being worth double in 10 years time,
there fore calculating you will have exactly, $57,895.23 per year passive income

how ridicilous

my style, is never even plan based on assumptions such as growth, have a rough strategy, and if it works, then good, if it doesn,t then bad luck

 

[Spectre]

I think theres a difference between goals and plans.

Wasnt it Ricardo Semler who spoke about having a 6 month rolling plan with milestones towards your goal.

Nobody can predict 20 years ahead - but 6 months you should have a pretty good idea where you're going

 

[vaughan]

personally, I think planning is the most ridiculous thing ever!

The best thing about not-planning is that failure comes as a complete surprise and is not preceded by a period of worry and anxiety.

 

[Singo]

Hi Tim86,

Your current strategy seems fine, as you can manage renovations well. But better if you start buying properties to renovate which can be split or added with a GF later. That way, you will have more options in hand when you start working less hours. A block which can be split can be split later. Adding bedrooms and bathrooms could boost the cash flow.

Singo

(Just my two cents. I am not that experienced, just bought my first IP and a low income earner)

 

[Aaron_C]

I would keep doing what you're doing. Who knows what you might find along the way.

 

[JT7]

I would keep doing what you're doing. Who knows what you might find along the way.

So simple but so profound!

 

[Daveh]

Without some sort of planning your doomed to failure, if you succeed your just plain lucky!

I believe in good planning and keeping and meeting goals even if that plan changes and has to adapt to the times.

The fact your thinking about it is positive in itself.

 

[nhg]

Without some sort of planning your doomed to failure, if you succeed your just plain lucky!

I believe in good planning and keeping and meeting goals even if that plan changes and has to adapt to the times.

The fact your thinking about it is positive in itself.

You aim for the moon, the means to get there may evolve and along the way you will grow and discover you may want to go beyond. But without a target you may find you went in the opposite direction.

I had a boss, most switchedo n guy I've met. He never had a goal, he always got ahead in life because he was that good at what he did. Oh a promotion, that's nice. If you looked at where he was heading though, he always seemed to be tracking sideways. Skill can only get you so far if you don't set goals.