Can or Will you retire on property alone?

Easy to get to 100K passive income in 15 - 20 years. Just about anyone on a median income or better can do it, as long as they are prepared to treat property the same way they treat a share portfolio, and invest for dividends ( yield) and reduce debt.

 

Our property portfolio is a pure CG exercise. We would be happy with 2% yield if CG was 10% year on year. And this CG is tax-free, unless we sell.

Our income is from SMSF and it is tax free. The minimum 4% pension payment is more than enough for us to live on. Our SMSF is invested in domestic and international shares/managed funds. As long as the SMSF gets more than 4% in income and CG, we should never run out of money.

Plus the properties can generate $36K in net income and we don't have to pay tax on that either.

Happy with our strategy, where we currently are and where we are heading .

For us, property is for CG, not for income.

 

Sheesh! I've no idea! They were never part of my plan.

Really??? I'd disagree.

Yep!

I keep saying this. It's all about keeping your ongoing expenses down. If you've got no non-deductible debts your living expenses aren't that high. This is exactly where we sit. The income is split between us, so taxes aren't that high, kids have left home, PPOR paid off & no non-deductible debt.

 

Sure, but your portfolio is already built, and you did it pre APRA.

If investors starting out try the same thing post APRA and hope for the same outcomes, they are in for a rude shock.

Today, your borrowing capacity would have run out far sooner pursuing growth only, and your portfolio size would therefore have been far far smaller. Consequently, the income generated would be less...

 

Rubbish. If you have problens with scaping by on $100k in Sydney then look at your spending habits.
$100k is a very comfortable lifestylw.
We stil rent on the harbour ( rentvent). Thats $30000/yr. Living expenses say $30000/yr (600/week), thats going out, weekend activities, weekend trips. Then you still have another $40000/ yr for 4-5 overseas holididays per years.

And even if you paying off PPOR its comfortable if you get property within your means. Not some $1.5m first home.

 

Buy and hold may work if your LVR is below say 60% average across your entire portfolio at time of writing. For the keeping up with the Jones' crowd with FOMO fever jumping in NOW at 90% there may not be many new investor success stories?

As PC members are already more aware resi MAY not cut it long term, many are/have been actively exploring investing in other asset classes, and for that matter other countries, for the last 18 months post APRA.

 

Wow do you even lift bro?
How can a couple get by on 30k a year living expenses? Do you eat more than once a day?

 

I think the term is harvesting, this strategy of course could be used.

You could also do this but you would also need to consider/deduct CGT, selling costs and market conditions would need to be considered when selling I guess another option?

Some other considerations, I think its only 1% of investors that manage to buy more than 2 properties.

....But am I the only one that wants to leave property/assets to my children, I must be a dying breed???

 

but you may get lonely

 

Do you have kids?

 

I guess no children, perhaps dumpster diving... who knows, I could not do it.

 

OK I'm not going to be goaded by someone potentially trolling for a response but well, add 3 kids into the mix. If you're considering private school, forget it. That's $100K for 3 kids alone. What if you want them to do sport, or music or something extracurricular...kerching. And try keeping the spending down cum school holidays. You can't stay home - it's impossible unless your tolerance for chaos is extremely high. Need to entertain them.

And last time I checked, an avg dump in Blacktown was pushing $700K.

Also work out the cost of a 2-4 week overseas trip for 5 passengers return, plus accommodation for 5. Most hotels won't let you rough it in one room.

Let me guess, you guys don't have kids.

We're very average and hardly go out for expensive dinners.

 

As a parent I'm leaving some to my kid. I only have one so the game is easier. Is this creating a new version of "old money"?

 

No kids, yes its easier as DINKS. But if you do then maybe spend less money on the precious little darlings needing everything these days. So may spoilt little brats these days. We started out in a caravan park when my parents first moved to Australia.
Oh, "I'm 21 just out of uni and can't get a$1.2m property. The greedy older folks who have worked for 30-40yrs always beat me" . Like , like so unfair.

 

Pretty easy. Take your lunch to work. Don't eat out much. Cut smoking, drinking, take away coffee.

 

Let me give a tip even when the children become adults most will still need financial support, so its quite a massive hindrance.
I recommend no one have children and that could be the easiest way to reach financial freedom. I guess its too late for some, but nonetheless a strategy that should be considered, not to mention less stress just joking

 

Its a cultural thing with me. I am actually going to leave my inheritance to my children, I don't need it, but they do, they are young and why not give them a leg up. That's another story and I am sure I am spoiling them but I don't care really.

 

I'd prefer to spend it, than to leave it to the kids. It sounds selfish, I know, but they both have the skills to do it themselves, and I think that struggle is good. If you make things too easy for them, they then rely on you. Both of them are miles ahead of where I was at the same age, so they're doing well.

Even so......although I'd rather spend it all, realistically, I'm sure that there's more than I could possibly spend without going 'silly', which just isn't my style.

 

Is saving $500 pa? on take away coffees really going to change your world tomorrow? I have a philosophy that there is no point saving the pennies and not enjoying today. Good on you for being so disciplined

 

That's your problem. Whats wrong with public school. If you have been fooled into thinking private school is best, then suffer with a big expenses. My wife and I did publuc school. Currently we pull in $380k/ yr combined income.
Same for sport. The precious little darlings need to have one organised activity after another.