Retiring choices can you assist.

[jasonp3]

What are all the choices and the benefits and disadvantages of each choice
for someone looking to retire using a property possibly worth 800 000 or maybe more.
How can the number figures and the pros and cons or each choice be researched better.
What kind of financial adviser or other professionals might be able to help so there wont be regrets in the future that some other choice would have been better.

What are the benefits or losses of each choice and how can they be researched better.

eg sell the property and buy a commercial property for income

sell the property and look at choices of having something to live in and something for earning

sell the garden and buy something for income

rent rooms

build an upstairs or another unit that can be rented out, but those need additional income


sell and buy land that can be developed for higher sales earnings or for earnings and a unit kept to live in.

Are there other choices and how can i find out dollar amounts involved in each or benefits and disadvantages or each that can lead to the best choice without regrets.

 

[Mr. Fabulous]

What kind of financial adviser or other professionals might be able to help so there wont be regrets in the future that some other choice would have been better.

This type of thinking is poison (to your mental state). I suggest getting rid of it with the quickness.

 

[j_p]

Work out how much you need to retire in terms on a dollar amount. If you hit that target you won't be disappointed.

Then you need to work out if your $800k can safely make this amount and how to do it.

There will ALWAYS be ways you could have made more. So don't focus on that, focus on what you NEED/WANT and how to achieve that.

 

[jasonp3]

J-p can you or others give me some dollar calculation suggestions if you can please and how they would work please for different scenarios please.

 

[fernfurn]

Is the property you plan to sell your private home, if not you will be up for 50% cgt. You will need to do some research on your own to answer all these questions. I wouldnt think $800k would be enough to retire on. If its your own home you could keep it and get the pension.

 

[jasonp3]

Thank you all that information is helpful to consider .

 

[WattleIdo]

jasonp3, you need to talk to a decent credit union or even a broker. It doesn't look like you've considered refinancing the property. Am I missing something?
If you took some equity from your exy property, you could buy a couple of cashflow properties in areas that are just taking off now or by rights, have to go off within the next few years (Brisbane is a ticking time-bomb). And still keep your 800 grand property.
Sounds like you need to do a lot more reading and researching. It's OK to speak to professionals without committing to anything. These conversations are good for them as well as you.

good luck.

 

[Terry_w]

J-p can you or others give me some dollar calculation suggestions if you can please and how they would work please for different scenarios please.

The very basic starting calculation is like this

Work out what you need to live on (or what you need to give up work) annually

e.g. $50,000
Then times it by 20
$1,000,000

$1mil invested at 5% pa = $50,000

Now you have to factor in tax, inflation, returns fluctuating etc.

If you are talking about investing solely in residential investment property you may want to work on a 3% return.

$50,000 / 3% = $1.67MIL

So you may need $1.7 mil in unencumbered property, other than your main residence.

Then you work out strategy.
You could buy one property worth $1.7 mil and pay it off over the next 20 years or you may buy $3.4mil worth of property as quick as you can and then gradually sell roughly up over the years.

What I have found is that people usually over estimate what they need. They arrive at the $50k figure by plucking it out of their anus without thinking. So you should do a budget and find out what you really spend.

Also you could set property up so the taxes are minimised so you may not need as much in rents as you would in income from work as you would have more deductions.

Also don't assume you won't earn any othe income ever again as once you are freed from work you may have time to generate other income generating hobbies.

And factor in Super too as this will generate an additional lump sum and/or income once a condition of release has been met.

 

[j_p]

There are too many variables Jason to give a simple answer. Terry has given you a great place to start with his calculations.
If you are good with numbers you can rejig Terry's formulas to calculate different variables. ie to calculate the require return.

Desired income (DI) is $50k
Asset Base (AB) is $800k
Required Return (RR) been the variable

RR = DI/AB
RR = 50k/800k
RR = 6.25%

Obviously that is a simplified example not taking into account taxes, expenses, inflation etc etc.

Time is another important factor, are you looking to retire today or in 10, 20, 30 years? Do you have time to grow your asset base?

You have two broad options, you should probably do both
Educate yourself further
Speak to a financial planner

 

[The Y-man]

Are there other choices and how can i find out dollar amounts involved in each or benefits and disadvantages or each that can lead to the best choice without regrets.

Too many choices in some ways......

What's the risk they are willing to take?
How much can they live on as a bare minimum?

You might get some suggesiton if you provide more detail

All you have given is property value (is it a current bank value?)

Helps if you can give:
1. size of land
2. suburb (determines if subdivisble, extendable etc)
3. number of bedrooms (for boarding)
4. any other cash/liquid assets



The Y-man