Share your investing goal

[TMNT]

TMNT

Your goal is deffo achievable just by raising the rents over the next 10 years

Will the market let your raise the rents $10 - $15 per year?

maybe $5-10, but not $15 to be honest, 95% of the areas I buy in arent areas where people are queueing up for rentals, most of them arent bad areas for vacancies but I hear more of the "oh its a tough time of year" type of comments whenever I speak to a/my PM

so everyone who is talking about $60, 100k, $150pa income,

I assume is talking about LOE and not LOR being the main contributor to their income?

since for some one with say 7 x ips, thats $10 per week increase per year, would mean an income of $35,000 in year 10, which is good but not great

 

[OKFFW]

maybe $5-10, but not $15 to be honest, 95% of the areas I buy in arent areas where people are queueing up for rentals, most of them arent bad areas for vacancies but I hear more of the "oh its a tough time of year" type of comments whenever I speak to a/my PM

so everyone who is talking about $60, 100k, $150pa income,

I assume is talking about LOE and not LOR being the main contributor to their income?

since for some one with say 7 x ips, thats $10 per week increase per year, would mean an income of $35,000 in year 10, which is good but not great

Whether or not LOR is achievable I think would depend mostly on LVR. If you have 7 debt free IP's worth around 3mil yielding around 5% that's going to get you close to your $100k income. On the other hand if your LVR is 80% it's not going to get you there.

 

[VaSSagO]

Mine is pretty boring

Goal: To have paid off all non-deductible debt before I turn 35, currently this is only the PPOR and we are on track to do this. During this time accumulate a portfolio of investment properties and during age 35-40 reduce debt with aim to drop down to working part-time. $100k pa by 40 was a goal but have realised that it probably isn't realistic, will be quite happy to work say 6 months a year and retire fully at say 45.

Method: Buy recently built properties with good yield in Perth preferably green title or small complexes on villas with minimal strata (ie only insurance). Some of these may be small duplex/triplex developments.


Status: Started this year (age 29) after a realisation that we needed a plan to be less dependent on our salaries, we had a PPOR and one IP at this stage. Have since purchased 2 more IPs and in the process of purchasing 2 more currently (awaiting to hear back if offer accepted on 1 and about to put an offer in on another). Planning on purchasng another 2 next year.

 

[ok180]

Goal: Build up my business interests, continue to purchase appreciating assets. buy our dream PPOR within 5 years. Be a good role model to my children, show them how to build their wealth. Show them what it means to be a lifter not a leaner. Always be productive.

Method: Working on the biz, buying properties in metro areas, stashing money away to buy the dream PPOR, having sex to make children.

Status: Business stuff going ok, about 2/3rds of the way through buying the amount of assets I think we will need, realistically will probably just keep on buying until I die anyway, bub #1 arrived last week.

 

[cimbom]

Congrats ok180!

My goal is just to be able to have 30-40k after-tax passive income, no non-deductable debt and a paid off PPOR. This will comfortably pay for our living expenses plus some play money to travel overseas every year. I will only have to work in my own business when I feel like it and do some "hobby" jobs for fun. My husband would like to remain working but will probably have reduced hours at that stage, if possible.

 

[greedy2000]

Scrooge mcduck comes to mind

Pretty much hit the nail on the head

 

[oc1]

No goal here, just keep doing what i'm doing as it is working. I'll then call it quits when i want - could be tomorrow could be in 10 years

Oscar

 

[nhg]

Care to share some of those sums?

Spreadsheet would have been on my work computer

Here's something I threw together in 2 mins, feel free to discuss some of the figures/scenarios and we can come up with something more realistic.

http://somersoft.com/forums/showthread.php?p=1075572#post1075572

 

[Cammclellan]

Hey dtraeger
I've never had any issue extending my LOC with the banks based on the portfolio value alone. I'm looked after by private banking at westpac and anz so I'm not sure if I get any graces because of that. I'm sure the banks know that should they need they have security with the properties.

 

[Cammclellan]

cam, I have a similar goal, as posted above. can you expand on your situation please.
-How many properties
-current equity
-process of drawing equity
-total portfolio
-how long have you been living of equity

I am aiming for $7m portfolio to take out $60k pa to live off, based on an average CG of 5%. Over the long term. I know some years will be nil and others 10%, any tips on managing this.
Thanks

Hey Darlogus

I don't want to sound like a ****** stating my portfolio Val as the last purchase was a very large office complex so it's probably not relevant now. My wife and I did build an initial res portfolio first which doubled early 2000's. I then used the equity to keep buying and just drew on equity for living. It is as easy as it sounds so keep going your vision is very achievable.

I use a system called MAP. Market > Area > Property
This is the opposite process that most investors use who pick the property first.
First check which market is positioned for growth based on the forcast population growth vs the available land supply.

Then I pick the best area with a balance of yeild and growth. Buy under the median within infill areas. I draw a line from the area to the city and check there is not an abundance of developable land that can come onto the market. Check the a reasonable established capital bench mark. Then the standard amenities checks.

The property then needs to be the optimum size and quality for that area ensuring I don't over capitalize.

Hope this helps

 

[monalisa]

My wife and I did build an initial res portfolio first which doubled early 2000's. I then used the equity to keep buying and just drew on equity for living. It is as easy as it sounds so keep going your vision is very achievable.

Hi Cam

If you don't mind posting - at what level of equity did you decide that you were ready to Live of Equity? From reading your post, I am guessing when you had equity equal to the purchase price of your portfolio?

 

[Darlogus]

Hey Darlogus

I don't want to sound like a ****** stating my portfolio Val as the last purchase was a very large office complex so it's probably not relevant now. My wife and I did build an initial res portfolio first which doubled early 2000's. I then used the equity to keep buying and just drew on equity for living. It is as easy as it sounds so keep going your vision is very achievable.

I use a system called MAP. Market > Area > Property
This is the opposite process that most investors use who pick the property first.
First check which market is positioned for growth based on the forcast population growth vs the available land supply.

Then I pick the best area with a balance of yeild and growth. Buy under the median within infill areas. I draw a line from the area to the city and check there is not an abundance of developable land that can come onto the market. Check the a reasonable established capital bench mark. Then the standard amenities checks.

The property then needs to be the optimum size and quality for that area ensuring I don't over capitalize.

Hope this helps

Thanks Cam, that is very helpful, as most investors do not use this strategy, its not talked about as much.
Cheers Gus

 

[monalisa]

Thanks Cam, that is very helpful, as most investors do not use this strategy, its not talked about as much.
Cheers Gus

Could it be because it is perceived as risky? In my view it is risky - you are relying on future capital growth - would the value's continue rising when wages have been stagnant over the last few years?

What LVRs are acceptable to the banks if one does LoE?

It definitely appears to be an attractive alternative as opposed to living on rent.

 

[Cammclellan]

Hi Cam

If you don't mind posting - at what level of equity did you decide that you were ready to Live of Equity? From reading your post, I am guessing when you had equity equal to the purchase price of your portfolio?

Hey, Just under 3m equity is when I felt the rule no longer applied.

 

[Cammclellan]

Could it be because it is perceived as risky? In my view it is risky - you are relying on future capital growth - would the value's continue rising when wages have been stagnant over the last few years?

What LVRs are acceptable to the banks if one does LoE?

It definitely appears to be an attractive alternative as opposed to living on rent.

I should note that the growth properties I buy at 80% are only negative for 3-4 years at which point they cover themselves and then start producing on thier own. 80% LVR is what banks will lend up to in my experience once you have a reasonable portfolio. LMI's don't like portfolios.

 

[monalisa]

thanks Cam!

 

[Cammclellan]

Sorry hope I haven't side tracked this thred. It was great reading people investment goals.

 

[Coconutwheels]

im not so crash hot with this planning stuff, can anybody give me a few pointers

I must admit, ive just been cruising along, and just been doing what I enjoy, and its worked out pretty well

current situation:
Income: 32k part time
Ips: 21
Portfolio: 3.6m
Current LVR: 78-82%
Aim to retire in 10 years regardless of whether I buy/not buy any more ips
$200k in todays dollars would be great
Portfolio is neutral to positive, depends on how lucky/unlucky I get with maintenace etc.

Wow that's pretty impressive on $32k income (or any income for that matter)!

How have been able to keep finding deposits? Also has financing such a large portfolio on $32k income been difficult?

 

[Darlogus]

Could it be because it is perceived as risky? In my view it is risky - you are relying on future capital growth - would the value's continue rising when wages have been stagnant over the last few years?

What LVRs are acceptable to the banks if one does LoE?

It definitely appears to be an attractive alternative as opposed to living on rent.

Yeh I agree it is a higher risk, but there again if I was not expecting or relying on Capital Growth I wouldn't be buying property I would be buying blue chip shares with high dividends, so I don't have to fix leaking taps.

I don't mind looking at things a bit different, as per my signature line below, we are all sheep to some extent, especially myself as I did not invent investing in property. Like many others I read a book and followed the leader. Just trying to get into the lead group.

I am just investigating ways of living off IP without needing to sell any assets when I feel like I don't want to work for a while, as my portfolio is only neutral geared and will be a long time before it is generating $60k after tax income, especially when I want to keep buying property that is currently negative geared, and knowing interest rates will start to increase over the coming years which will lower returns.

 

[Presley Boyce]

Perth Investers

Hi all,
I've recently moved from Brisbane to Perth and thought it would be a good idea to see if there are any Perth region investors who would be willing to pass some of there local knowledge on as I don't know the region well. I have an IP in Brisbane and I'm looking to buy somewhere in Perth. I'm happy to meet for a coffee or beer.