What's your back up
- Thread starter 1911naomi
- Start date
I would suggest you ask the provider of the advice as to the logic ..........
100 k is substantial for many, and milk money for others
6 to 12mths without income is a reasonable ACCESIBLE equity cover buffer to hold.
If you carry appropriate IP insurances then the buffer can be reduced by HEAPS
ta
rolf
Not if they only increase in value.
We try to keep our buffer around $100,000 to $150,000 .... mainly for piece of mind, but also if the unexpected bargain opportunity comes along.
Mystery
We did for a while, but we didn't like the view.I always live on the edge
Mystery
In the three stages we have gone through:
Starting out would have been the security of a job as our back up plan.
In the growth phase it was the broad spectrum of tenants, reducing the risk of all our properties being vacant at once (compared to one ot two properties that could be vacant at the same time!!) and making sure they were CF+ so we could fall back on that if I lost my job.
Now in the end game, the risks are very much minimal. Should there be a downturn in rent across all our properties, we will still be fine. Even a 40% drop would be manageable. To counter the end of world scenario, we are contributing to our super to have as a "back up" if we endup somehome really in the poo.
Starting out would have been the security of a job as our back up plan.
In the growth phase it was the broad spectrum of tenants, reducing the risk of all our properties being vacant at once (compared to one ot two properties that could be vacant at the same time!!) and making sure they were CF+ so we could fall back on that if I lost my job.
Now in the end game, the risks are very much minimal. Should there be a downturn in rent across all our properties, we will still be fine. Even a 40% drop would be manageable. To counter the end of world scenario, we are contributing to our super to have as a "back up" if we endup somehome really in the poo.
So in the midrange how much did you have in the bank .
In the growth phase it was the broad spectrum of tenants, reducing the risk of all our properties being vacant at once (compared to one ot two properties that could be vacant at the same time!!) and making sure they were CF+ so we could fall back on that if I lost my job.
In the growth phase it was the broad spectrum of tenants, reducing the risk of all our properties being vacant at once (compared to one ot two properties that could be vacant at the same time!!) and making sure they were CF+ so we could fall back on that if I lost my job.
I used to live on the edge, and fell off it once!!
The Y-man
I do this at least once a week,my backup is my Mum....
no,not really.its called a VISA CARD,not a well known source of finance.
Rather than measuring your buffer in an 'amount' as such, it is best to measure it in terms of how much time it will buy you.
Work this out by accounting for all of your property expenses, your own/families personal expenses and work out how long you could survive without your income from your job. If you are very conservative, you may account for your IP's being vacant.
Those starting out would most likely have less of a buffer than those well into the accumulation stage or those approaching the final part of their investment journey where the income from their investments supports all of their expenses. (ie financially free).
As Ralph says, insurance could be counted as your buffer. Eg, income protection, life insurance/disability insurance.
Regards Jason.
