Endgame - What are you aiming to live off?

From what I understand there are generally 2 ways to live off of a property portfolio. LOE and LOR

Who does what?

...if there are 3rd, 4th, 5th options and so on. Please enlighten me.

Cheers

KJB

 

Endgame is live of rent and share dividends. I may have to sell a couple of properties for this to occur.

 

Unless some capital growth happens in the next few years, we'll be living off the kindness of strangers.

 

The government!!
Or some rich arab guy who has a fetish for ugly middle aged men like me

 

Can't imagine retreating and reducing income in future by eating into equity, so it's live off rent for us and continue to increase income levels year after year.

 

I'm on the pension now and only allowed $205k in assets as a single person (not including my PPOR).. this amount will increase in Jan 2017 to $250k assets for a single person.

So, bearing this in mind, I am aiming to increase my assets to $250k (they calculate asset cost as value of asset minus loan amt left on it) but have to be careful which loan products I choose as it could effect my pension eg if the IP loan is funded through equity of my PPOR.

So, after all that, I aim to maximise the amount of pension I receive from the govt, keep buying IP's while I am able to service loans and upgrade my PPOR if my assets become more than amt allowed by Centrelink for the full pension and I guess that's it at this stage.

 

Hopefully, live off SMSF (owns cash, shares and managed funds but no property) for the rest of our lives. Been doing this for 5 years so far and balance is still increasing.

Pass property portfolio (owned in multiple trusts) to our kids and then later to our grandkids. But only if they are very nice to us !!!!

 

When I was up in QLD 2 weeks back, I read headlines that younger generation are impatient and are trying access their inheritance in a brutal way. I am thinking about selling my children before my property, probably my end_game...

 

I would suggest you give them to charity...

 

hopefully she is tax deductible

 

As long as they are valued at $2 or more and you have a receipt

 

I think for me, even if I am in a great financial position, would love to keep on learning and being around people. Wouldn't mind obtaining a couple more degrees under my belt to broaden my knowledge base and being able to do pro-bono work.

If I was to have children later on down the track, be involved in coaching the junior soccer/ football team and advice the kids the team motto of "Cheat to win, but don't get caught like Lance Armstrong".

 

Be carefully selective with what you say about getting a Pension and holding assets on here @shimmy there are a few who here who won't like this working of the system to your advantage.

 

Wow, really? To me it is sound thinking and I don't see it as 'working the system' at all. Why do you think what I consider to be, good management, as working the system?

edit - hmmm, you must be taking the **** at my expense. took me a while to catch on

 

For me it is a live off rents strategy. I feel that is most sustainable throughout retirement. Like others, I may have to sell some off to balance out the LVR's on the remaining properties.

At 34 I am still in accumulation stage but hoping to have some finality to that in the next 3-4 years. At late 30's; with the properties purchased on their 30-year mortgages, I'll then strategically go for refinances (if available to me!) From my early 50's (when the first round of 30-year mortgages are coming close to due), to my late 50's (when the final properties I'd purchased back in 2015-2019 come almost due for their 30-year mortgage completions).

Definitely want to have all properties held, have their max re-financing completed by late 50's at the latest (since getting longer term loans past 60 is hard to do).

Why do this? The intention is to top loans up to their maximum allowable, in my 50's. Ideally an 80/20 LVR maximum. Of course, I'll have savings and equity that I'll have released (drip-fed) over the yeara that will go straight into each and every little offset accojnt I have (one aligned, per property/mortgage, ideally).

Once all of that is set up, I become like master puppeteer; sitting above the grand stage of my investment life. I can basically pull an control gearing levers at my leisure, per-property, and move equity around between them (and within each one) a lot more freely. I have the full benefit of OPM (other peoples money - i.e. those 80% bank loans) when I want it, but the plumped up offset accounts maximised to drive the yields I'll need to live off, and have a financially happy retirement.

Then at 70s I can strategically start selling off one per financial (tax) year as I become more frail and houses become more burdensome to hold on to. Once fully retired I don't believe CGT is payable? Could be mistaken though, and 40 years from now, policy could have changed in that regard.

In short, I am making the system work for me, throughout the decades!

 

Great minds think alike...exactly my strategy....

I plan to live off the following...and create a stable 6 figure income

1. Dividends from the top 15-20 on the ASX
2. Rents

Relying just on rents is not stable as this varies a lot...

The play money will be:

1. Super ( from 60 on assuming they don't change rules)
2. A couple development (to continue to increase my base assets)
3. Contract work (to prevent myself from going stir crazy)
4. Selling assets if they don't make sense

I can pull the plug today....but having too much fun......

 

Apart from being able to pull the plug today (cause I can't) that's exactly my philosophy. Inc 1,2 & 4. As for contract work, maybe but I'd be just as happy developing and packaging for entertainment as much as the money it makes. As I have young kids I'd be targeting a stable income (outside of developments) of $150k+ (ideally $200) and a Debt free PPOR.

 

Live off rents as well as chunks of development profits, keeping some stock to keep expanding.

 

Live off rents whilst continuing to invest

 

No end, just keep working and buying until I die. Aim for more flexibility along the way.