No Job - how long before I sell properties?

[sash]

Hi All,

Following on from the Cash Flow thread...I thought it would be interesting to know how well people are prepared in terms of whethering this financial "*****" storm!

How long would it be before you have to sell down your property portfolio if you lost your job?

Would be good to know what your risk mitigations are.

For example for myself, I have following lines of defence if I lose my job:

1. Positively geared to the tune of 52k per annum

2. Have over 250k cash sitting in offset accounts and another 200k in LOCs.

3. The payout from any redundancy will be quite substantial - i.e. after
taxes payout will be in excess of 80k excluding super!

 

[Electro]

For example for myself, I have following lines of defence if I lose my job:

1. Positively geared to the tune of 52k per annum

How?

This is $1000 p/week after IP expenses!

2. Have over 250k cash sitting in offset accounts and another 200k in LOCs.

How?

As a new and young investor with a decent income I cannot conceive how one could do this with having a huge income. If you don't mind me asking, are you a very high income earner? Or is this simply a result of good investing?

Please share your wisdom with a beginner.

 

[sash]

Yep....net $1,000pw after expenses but before income tax. Have a look at the cashflow thread bloke called fficjm.....he makes me look like a minnow.

Also others their....but they are probably shy!

Not compared to some in this site.....but 6 figures.

Pearls of wisdom.....keep reading threads on this site. I posted to your last reply on the CF thread!

How?

This is $1000 p/week after IP expenses!



How?

As a new and young investor with a decent income I cannot conceive how one could do this with having a huge income. If you don't mind me asking, are you a very high income earner? Or is this simply a result of good investing?

Please share your wisdom with a beginner.

 

[sash]

Yep...$1k after IP expenses...I am only a small fish....fficjm is da man....he is the biggest fish in the pond.

Also, there are others out there but they are shy!

I don't consider my income high...it is in 6 figures......made less when I started.

I have responsed to you in CF thread & survey!

How?

This is $1000 p/week after IP expenses!

How?

As a new and young investor with a decent income I cannot conceive how one could do this with having a huge income. If you don't mind me asking, are you a very high income earner? Or is this simply a result of good investing?

Please share your wisdom with a beginner.

 

[Electro]

Do you mind if ask how long you've been in the biz and how many IP's you have now?

 

[steveadl]

How long would it be before you have to sell down your property portfolio if you lost your job?

Not applicable, and that's the way I like it.

 

[sash]

Could not get this through, too long!

"If you lost your business or job...how long before you have to sell your property portfolio?"

Care to consider putting a response now?

Not applicable, and that's the way I like it.

 

[sash]

Never had a business....I am not that smart...besides I am the lazy investor!

Number of IPs.....something in the double digits....and over 50% has been bought since 2005!

Do you mind if ask how long you've been in the biz and how many IP's you have now?

 

[Electro]

Never had a business....I am not that smart...besides I am the lazy investor!

Number of IPs.....something in the double digits....and over 50% has been bought since 2005!

Sorry I meant the business of investing in property. I think it can be classified as a business since the ATO is involoved.

I too, in a sense, am lazy. I would much rather spend the time doing the research and making the right decisions rather that just jumping into anything and then having to spend a lot of time and effort after. After all - it's what im trained to do. I want to make the right decision and then let time do its thing.

So 50% since '05 and double digits. Does this mean that the growth of your portfolio is exponential? Have I missed the boat?

 

[sash]

I'll make the same disclaimer as the last thread...I am the village idiot...so you may need to do your own due diligence....

I have been busy buying madly in the last few years thats all.

I don't think you have missed the boat...one would argue that the current Global Financial Crisis presents some excellent opportunities!

Have you got any properties?

So 50% since '05 and double digits. Does this mean that the growth of your portfolio is exponential? Have I missed the boat?

 

[Electro]

I'll make the same disclaimer as the last thread...I am the village idiot...so you may need to do your own due diligence....

I have been busy buying madly in the last few years thats all.

I don't think you have missed the boat...one would argue that the current Global Financial Crisis presents some excellent opportunities!

Have you got any properties?

No properties yet. I only finished uni a couple years back and only now find myself in a position where I can buy my 1st.

I don't think you're an idiot at all. Anyone who is able to put themselves in a position like yours is quite intellegent actually.

I just find a great deal of value in learning from others and gaining insight into their own experiances. Thanks for entertaining all my enquiries... and seriously i'll stop hijacking your threads now!

 

[steveadl]

Could not get this through, too long!

"If you lost your business or job...how long before you have to sell your property portfolio?"

Care to consider putting a response now?

If I lost my business - perhaps a few months. Would you consider my risk mitigation non-existent?

On the other hand, the chances of me losing my business? Zilch. I'd have to have A, B, C, D........ X, Y, Z all go wrong at exactly the same time. Chances of all that happening? See above.

I don't plan ahead for stuff that isn't going to happen in my life, and if I did - where does it end, may as well start planning on what to do when the aliens land.

I guess on further reflection of your question, my risk mitigation is my business.

 

[sash]

So what will happen to your business if you are ill for a couple of months for arguments sake...not that we would want that of course!

Would it still continue to run and bring in the mullah?

If I lost my business - perhaps a few months. Would you consider my risk mitigation non-existent?

On the other hand, the chances of me losing my business? Zilch. I'd have to have A, B, C, D........ X, Y, Z all go wrong at exactly the same time. Chances of all that happening? See above.

I don't plan ahead for stuff that isn't going to happen in my life, and if I did - where does it end, may as well start planning on what to do when the aliens land.

I guess on further reflection of your question, my risk mitigation is my business.

 

[eggnog]

well i'd be absolutely right-royally stuffed and will be found on the roof of brisbane's tallest building

 

[Rob Williams]

I don't plan ahead for stuff that isn't going to happen in my life, and if I did - where does it end, may as well start planning on what to do when the aliens land.

Actually, they're already here Some of them have infiltrated this forum.
I agree with you. I used to fear that I would lose my job and not be able to get another one, so I never borrowed to invest.
After not being out of a job for about 20 years, I realised that the chances of that happening were quite slim. I stopped allowing that fear to hold me back.
I decided that if I lost my job, then I'd rather be the unemployed guy with an investment property than the unemployed guy with nothing.
I thinks it's peoples perceptions of what is "likely" to happen that's the issue. Some people attach a high probability to certain things that others might see as being highly unlikely.

 

[sash]

Iam sort of agreeing with you....I like expecting the worst but planning for the best!

Even in the current climate...I feel better if I have a couple of more IPs under my belt than having less!

As Nathan once said so eloquently...I read, think, and sh&t property 24x7!...just kidding.

I thinks it's peoples perceptions of what is "likely" to happen that's the issue. Some people attach a high probability to certain things that others might see as being highly unlikely.

 

[MichaelW]

Sash,

Very interesting question!

I work for OneSteel, and they recently amalgamated my business unit into two others leaving myself and the rest of the business unit lead team technically redundant. They're going through an internal redeployment process but there's no guarantees. I'm shopping my CV externally as well and have a few leads, but again no guarantees in this environment!

Sooooo.....

Decided I'd at least consider the worst case and determine how long I could service my significant borrowings on zero income given my wife doesn't work and I have a three year-old son.

I modelled my preferred option of buying a nice liveaboard yacht with the redundancy money and sailing North for the next 6-12 months and renting out both the PPOR and the IP. What it showed is that my monthly cash shortfall after all expenses would be about $1500. Not too bad. The good news is that I have over $150K in cash sitting in the mortgage offset account at present, so I could theoretically survive for 100 months in that mode.

Good to know that the "downside" still has plenty of upside. Shame I probably won't get to execute that plan and will likely end up slave to an employer one way or the other... Pursuing three potential jobs based out of Singapore at present too. All offer a pay increase plus a reduction in my tax rate to 15%. May we live in interesting times.

Cheers,
Michael

 

[steveadl]

So what will happen to your business if you are ill for a couple of months for arguments sake...not that we would want that of course!

Would it still continue to run and bring in the mullah?

Yup. Training a new manager at the moment to handle things while I'm on honeymoon. If I knew I was going to be out of action would probably hire an extra person to pick up some of the slack, but I don't work that hard.

Figures might suffer a bit without my prescence, but noting overly substantial.

Plus if it's anything serious I have the bonus of not only the business running pretty much as is, but have income protection/TPD kick in on top of the business income - so might actually be better off! Not that I want that of course!

 

[sparky23]

The way interest rates are looking there would be no need to sell anything, just a case of fixing rates for a good long time - this ought to apply to most people soon I should think?

 

[Propertunity]

well i'd be absolutely right-royally stuffed and will be found on the roof of brisbane's tallest building

Now, now CP it is only a game. We just keep the red & green house things on the board game growing.
None of us get off this planet with any of the goodies we won in the game. You have to hand them all back at some stage.