Can or Will you retire on property alone?

That is what I am going to do

 

Great so the idea is bigger house, no rental properties.

 

Also works in one’s favour when one goes into Aged Care. Your PPOR is counted as around $170K asset value even if it is worth millions

 

The pension is also subject to an assets test, and cuts out around $800K for couples. To own 5 properties and still get a pension means the properties must be very cheap ones???
Marg

 

Could a big fat LOC against your PPOR be shielded from the means test?? Would still show up as part of the mortgage no?

 

That would enable you to live comfortably while still getting back a small fraction of your tax money that everyone else is entitled to.

 

I wouldn’t soley rely on the pension - that’s poverty, but I wouldn’t put myself in a position where I miss out on it either.

 

I agree some people are worse off especially if they hold not enough in their asset base in property, it doesn't really depend on number of IPs but rather how much they hold and what is generates.
Similarly others may face similar situation holding stocks.
However, what I do not understand is why would someone hold 5 IPs and still can have pension? I thought Centrelink look at asset base too not just income? I may be wrong there as I don't know much about Centrelink...
To me I wish to generate enough for my lifestyle not to just replace the pension income, that would not suffice, so you are right it is really a balancing act, and some will be able to live off better having less investment and receiving full pension verses those that may have around that $1million mark at the moment.
That is where the government rules sometimes interfere....
I know of one family who sold 5 IPs in Sydney, many years ago so they can receive the pension, so it really depends what people's priorities are.

 

This may change in the future, my young friend at UNI suggested parties looking into it to cap it above certain amount and hence to start charging land tax for PPOR in the future? I call it wealth tax...
I look at it this way, if around 50% of our wealth is in real-estate and another 20% in Super, when in strive that's where the government will look for a piece of pie, they need to go where the money is.....?

 

Bitcoin is looking better and better

 

Thanks Xenia,
Yes but too time consuming for me, have investigated crypto-currencies, but what can I spend it on, for now I will leave it to gen 'Y' to make their mark.....?
Over the years I think I prefer to specialise what works for me rather than to generalise in various investments as we all have only 24 hours in a day, just works for me...
As I say we all like our cup of tea or coffee differently, that's all!

 

True it’s a difficult space to understand and even when I do think I have a good grasp of it, something happened and my entire definition changes lol

 

I just can't stand missing out on free cash.

 

Bump
Thought I would resurrect this one again

Now that APRA has killed the market, albeit I think a soft landing..

However, how is anyone going to retire on resi property today in Australia?

MTR

 

Kind of my conundrum. But there are worse problems in life.
Pull the pin now or wait?

 

"get a good job that pays good money". Good ol Joe.

 

This one resinated with me..... some years ago at Steve Mck seminar

A Parable…The Tale of the Hunter, The Monkey & The Peanuts….

 

Yes great parable.
I let go of my nuts years ago by selling properties - releasing me from the never sell mentality.

 

Lol... good for you

 

Easy - Its usually the debt servicing and cashflow that makes a property strategy unviable for retirement. Endless borrowing creates a parlay problem where all the equity just gets reinvested. 20% equity on 6 properties is far higher risk than one you own outright. If the 6 drop in value 20% you have a problem. But if one drops 20% its no killer. BUT you have to trade that off with the leverage benefit when prices rise...Holding 6 is better than one. But retirees hold for income.....

Its not unlike retirees with shares. eg CBA. They earn great income and the yield is so high based on the share cost (ie $2.85) v's its present market (asx cba = $72)....If you own property outright that cost $200K and its worth $1m and produces rental income of $50K....You arent thinking of selling as it services itself with a historical cost yield of 25%.

Ungeared property can product consistent income. And not all property has a land tax issue. Many people use strategies to diversify to avoid that. ie commercial IP, different states etc