when you have more than, say 5 properties ......

[on the move]

Often you hear people say they aspire to have a huge number of investment properties, and some do have many properties, it's like a badge of honour, otherwise S McKnight wouldn't have written 'From 0 to 130 properties in 3.5 year' or 'From 0 to 260 properties in 7 year' . I am not in the fortunate/unfortunate position to have 20, 30, or 50 properties. But say if I am, it will be a nightmarish existence : 50 properties maintenance, trust, land tax, council rate, water, legal, accounting, and when you apply for another loan, all the documentations .................... What is life again ?

 

[Indifference]

I've always thought this is an ego thing myself.

5, 10, 20, 30.... doesn't say much really. It is a qualitative measure only.

The net cashflow versus ongoing effort is more important.

What if you only own 1..... if 1 makes you $100k p.a. net versus 20 @ 4k ea, would you be intimidated by the "I've got 20 IPs talk"? I should think not.

Some people like to keep arbitrary scorecards... good luck to them!

 

[bluestorm]

By having too many properties, you really only go from your normal full-time job, to then a job in maintaining the large property portfolio. Don't sound like much of a retirement to me.

Much better to have a few, good net cashflow properties.

 

[RumpledElf]

Would have thought once you're really serious about it you turn into Dazz and become a commercial investor.

Personally I only want the passive income of 2 IPs or equivalent. IPs are the easiest way to get it since I don't have that kind of money to stick in a term deposit or shares that pay dividends. If I did, I'd probably go that way because it is less work. Plus a unit in the city for the kidlets, but that's not really an investment, more a hedge against the lil buggers moving back home once they're out

 

[Rolf Latham]

since I don't have that kind of money to stick in a term deposit

Be happy that Ips are your way then, coz with Tds either youd not get very old or you can live on very little.

Tds are horribly susceptible to inflationary pressures, and the averages of time.

ta
rolf

 

[gerd]

when you have more than, say 5 properties ......

At that stage most investors realize they don't know it all and move to a level that removes the nightmare scenario.
Maintaining a portfolio in excess of 8 to 10 properties introduces different options due to a lager asset base in knowledge and funds.

Gerd

 

[Indifference]

Would have thought once you're really serious about it you turn into Dazz and become a commercial investor.

Some of us non-serious, little folk can do this to...it is not as scary as you think. (not in my limited experience anyway)

Personally I only want the passive income of 2 IPs or equivalent. IPs are the easiest way to get it since I don't have that kind of money to stick in a term deposit or shares that pay dividends.

2 is arbitrary isn't it? I mean, this is a qualitative goal...and it might appear to be the easiest way to get the capital, but it is by no means the easiest way to then get the desired passive income. I mean, 5-6% gross on average, less 15%+ of that return on costs.... doesn't sound too attractive.

Sorry, not trying to be argumentative, just don't see how that approach is the easiest way to generate passive income. Happy to be convinced otherwise

 

[Bargain Hunter]

People will always be impressed with big numbers.

If you told someone at work that you have 20 properties the first thing they would ask is why are you working here? The average Joe has no idea about investing.

However even on this forum someone will make a post about the size of their portfolio and some people will get defensive when someone asks basic questions of the poster.

 

[RumpledElf]

2 is arbitrary isn't it? I mean, this is a qualitative goal...and it might appear to be the easiest way to get the capital, but it is by no means the easiest way to then get the desired passive income. I mean, 5-6% gross on average, less 15%+ of that return on costs.... doesn't sound too attractive.

2 x average new IP in this area = slightly more than we need to live on, hence my math. So yes, entirely qualitative. 1 swish apartment in Sydney would also do it, but those cost a lot more and would take way longer to pay off. I don't really care where it comes from as long as it is passive. And like I said, 2x that kind of IP is by far the easiest way for us personally to get that income, unless one of my websites suddenly starts earning 8x what it does now

The goal of being financially independant is a pretty common one around here, but what you need to get there varies a lot.

 

[our obsession]

I am in excess of 5+ IP's, it isn't a chore, or frustrating, I want to be doing this, accumulating this type of asset base, it's enjoyable, a passion for me, (along with many other varied life ones).

Each is a 'deal' within itself, researching and buying as well I am able, investing is fun. It gives me options for creating other income streams too...so I have no issue with many, multiple IP's...some of the stuff involved is delegated, some is managed by me. So yes, I am manager of managers. Team Obsession is alive and well.

The kicker is:

I choose to be doing all this, and it is fun for me. It does not preclude or exclude me for fun and passions in other things.

The Game of Life. Love it.

 

[The Y-man]

People will always be impressed with big numbers.

If you told someone at work that you have 20 properties the first thing they would ask is why are you working here? The average Joe has no idea about investing..

...and in many ways credibility if you want others to get interested in property investing. If people want to discuss the topic with you, they tend to take you more seriously if you have quantity (without necessarily the "qulity").

Cheers,

The Y-man

 

[Burbs]

Whether it is nightmarish or not depends on the management skills you develop along the way. Or the flipside of that, the lack of interest in or development of managment skills may well be why 70% or so of investors only have one IP.

 

[Dazz]

...and in many ways credibility if you want others to get interested in property investing. If people want to discuss the topic with you, they tend to take you more seriously if you have quantity

Agreed - people seem to take the "norm" or average when discussing property investing.

If someone volunteers "we own 4 properties" there is usually some sort of image that runs through the mind of the listener. I know I do. That would be say 3 normal houses worth say 400K each, with maybe a unit or apartment of say 300K....so about 1.5m, with incomes of around $ 350 p.w. each and unknown debt levels.

Could be wildly off the mark ??

They might mean a Vauclause mansion, a cattle station, a beachfront villa in Vanuatu and an apartment on Fifth Avenue in New York.....who knows...

If discussing property, most experienced investors desparately don't want to be taken as a noobie. Blurting out "how many" gives this hazy impression that you know what you are doing, without revealing too much. Might make future conversations easier, or it may lead into another conversation that may be lucrative that otherwise wouldn't of presented itself if the listener hadn't been informed of the number.

The SMcK example is probably a good one. 260 in 7 years sounds mind blowing to most folk....but then during the split up with Mr Bradley, he walked away with the other assets of the business, and Mr Bradley walked away with the property....he's a smart cookie, but I don't suppose a book entitled "How I went from half of 260 properties back down to 0 in 6 months" is going to shift too many books off the shelf.

 

[RumpledElf]

If someone volunteers "we own 4 properties" there is usually some sort of image that runs through the mind of the listener. I know I do. That would be say 3 normal houses worth say 400K each, with maybe a unit or apartment of say 300K....so about 1.5m, with incomes of around $ 350 p.w. each and unknown debt levels.

Ah, 'normal'. The in-laws have the 300-500k 'normal', while ours were bought seriously on the cheap. You could equally swing this argument around from 'I own X properties' to 'I own $X,000,000 of properties' and get the same problem in reverse with everyone dividing your total by $400,000 to get the number

And people like Dazz need two or more X's in that figure of course

 

[BayView]

I think that once you go past 2 properties (and the 2nd one isn't yer standard holiday house that only you use 4 times a year), you have already gone past 90% of the world in terms of property accumulation.

And, if you manage to hold these 3+ properties for more than 5 years, you have probably out-done more than 95% of the planet.

Think about how many people you know (other than this forum) and how many of those people are multiple IP owners (forget the holiday houses - they don't count).

 

[on the move]

I had a few mistakes listening to the spruikers chasing extra $20 a week rent, especially the latest purchase (emotional buy). Sometimes hear people say so and so have 30 or 50 properties etc, can't help but thinking I could have done better, but on a second thought do I really want that many lesser quality properties with all the hassles when one major repair bill will wipe out half year's rent, life is too short.

 

[Luv2Travel]

50 properties maintenance, trust, land tax, council rate, water, legal, accounting, and when you apply for another loan, all the documentations .................... What is life again ?

I couldn't even imagine! I only have the 2 plus my PPOR, and so much paperwork and lots of mail with everything multiplied by 3. There's always something to pay, but that's not what bothers me. I'm in the process of selecting a tenant and it's doing my head in, I'm such a stress head. The thought of doing this regularly if I had lots of properties...

 

[Propertunity]

I couldn't even imagine! I only have the 2 plus my PPOR, and so much paperwork and lots of mail with everything multiplied by 3. There's always something to pay, but that's not what bothers me. I'm in the process of selecting a tenant and it's doing my head in, I'm such a stress head. The thought of doing this regularly if I had lots of properties...

I think you need to get your head around it a bit better Biggles ...for your sanity and lifestyle.

Yes, there is a lot of mail. Yes it is multiplied x whatever numbers of IPs you have. I have one of those wire rack file thingys sitting on my desk, OK it IS a BIG desk but with one file for every IP, every bit of mail gets opened and thrown in its file, never to see the light of day until the Accountant opens it and EOFY. Oh, of course I don;t self manage either, I just manage a couple of PMs - via email.

Yes, it can be a pain when all the rates come in at once, but I was thinking some time back that:
1. Problems don't go away just because you get wealthy
2. It is better to have the problems of the wealthy and try to find a few $K's every 3 months to pay the rates, than it is to wonder about where you are going to find $2K for little Johnny's dental work when you were poor.

If you have more than 5 x decent IPs (say of around $400K a piece in todays money) and assuming a very average 8% GC each year ....then you are increasing your net worth by an average $160K tax free (if you don't sell) each and every year over the long term.

I can put up with the inconvenience of some maintenance issues, and a few emails from a PM every now and then for that kind of money

 

[Luv2Travel]

I can put up with the inconvenience of some maintenance issues, and a few emails from a PM every now and then for that kind of money

I absolutely agree which is why I intend to remain in the game. It's not so much the bills and paperwork as I am an organisational queen! It's this whole tenant selection, relying on a property manager to tell me about my options and then I decide based on what they tell me. So many horror stories I'm scared of making the wrong selection, or in the current case I'm scared about my legal liabilities as I posted in another thread with a child and a hill. I've been assured however I have no responsibility so am a bit more relaxed. This is only the second time selecting and I'm sure I'll relax more once I've done it a few times. As I said, I'm a stress head and think of every little thing that could go wrong but I'm like that with everything in life though, overthink everything.

 

[redwing]

I got:

1. My House
2. The Outhouse
3. The Treehouse
4. The Cubbyhouse
5. And I spent last night in the Doghouse

That's Five