Exit strategy poll

Was reading an article and took the headings from there and thought it would be interesting to see where people put themselves into. I'm sure there are other options but hopefully this captures most.

 

Hi Leo,

"....when the time comes." .... I guess this needs more elaboration before an option can be selected for the poll ....

Does that refer to a time when the person goes bankrupt or primary earner loses job or something else.... like in general day-to-day?

The action someone would take would vary on the exact "time" situation we are referring to here....

 

haha.. never thought of it like that Y man...

 

I'll vote for:

"I'll do what makes sense, when the time comes".

So much will change in the coming decades that calling it now would be a bit silly.

Though generally, I like the idea of holding on to the largest asset base I can (and maybe nuking a few IPs to wipe out some debt if necessary).

 

I voted never sell and pay down debt. The idea being to have enough rental income for living expenses and continue to get Capital Growth by keeping the properties.

 

Hi AusMover,

Yeah there are so many different variables. I guess I just mean kind of like an exit strategy.

 

I can't ever see myself going backwards, so it's never sell and increase debt for me.
The time is nigh.
The question is, if this is my strategy, what am I actually exiting from?

 

Either never sell and pay down debt or sell some to pay down debt, enough to live off rent.

 

Having already exited, mine is, control the largest asset base possible to generate lifestyle income requirements whilst everyone else is paying its way.

 

I don't see this as an exit strategy bec

How does this work, not trying to be smart? just trying to understand how much debt is paid off pa when most properties in Australia are negatively geared and I assume you are accumulating property you are just increasing debt right?

MTR

 

Mine is never sell, move equity into higher yielding assets.

 

Probably sell a property every few years if need to, but won't be paying off debt. Besides this part, my idea is a bit more complex.

Will be putting any sale profit in the offset and in high yielding shares for the dividends. Can live on property cashflow, plus dividends, and topup by selling shares if need to.

This is in combination with positive cashflow, because the aim is to lean towards cashflow properties closer to the end game. Maybe commercial property, and semi commercial.

IF the banks let us, will also be paying property expenses with a line of credit so that we have larger income available to us. Semi LOE strategy.. But will probably only be able to get 1 LOC approval before leaving job, so it won't last forever. However it should allow us to delay selling any property for a couple years and get a bit more gains.

This is all theory because at the moment I have no desire to retire, and I have at least 5-10 years before its possible anyway.

 

Whatever is required to maintain a reasonable lifestyle.

Either the capital generates enough return or you start eating in to the capital.

 

Exit strategy - "when the time comes" will not work for me, as you are not in control, if the "time comes" your only option may be to liquidate, to reduce debt and you will be at the mercy of the markets, worse still you may not be able to sell.

Exit strategy for me is "sell some properties pay down debt".

I don't care what I sell, cash flow/income is king for me, you can always buy properties that is not an issue, strategizing, managing the debt monster and enjoying a comfortable lifestyle today is very important to me.



MTR

 

I guess for me its selling some stock to pay down debt so I have a guaranteed certain level of net rental income coming in each week (regardless, that's the SANF), while continuing to build my asset base, but also selling some stock each build to reduce debt a little to continue to increase net rental income and then also living off some of the profits from each project. I guess never selling would increase my asset base even more but my goal is to be able to enjoy the wealth as soon as I can and not just build a super mega asset base for the hell of it. There may be better ways to do this but this just makes sense for me.

 

I would try and hold onto my assetts for as long as possible and try and repay the debt (with whatever income I have left over). Hopefully by that time the properties I have acquired are all paying themselves off due to rental rises over time. If I'm forced to sell than I would sell but especially with property it's not something I would want to flip over the short term due to all the costs involved with buying and selling. Shares is a different story as they are easy to liquidate and the costs involved are minor.

Edit- I answered this question assuming 'when the time comes' relates to a raise in interest rates or some type of financial hardship!

If the case was 'when the time comes' meaning to retire it would be a different story. I'd sell off the majority of the properties and hopefully I'd have enough money just to live off the interest off a savings account + still have some money tied up in shares so I could also live off the dividends. My retirement will be 40 years away though haha.

 

I voted "Sell Some Properties to Pay Down Debt" but really it's more like sell some properties to pay down some debt, and direct profits into a fully franked dividend income stream

 

Do you also use margin loans??
Higher yielding assets, what % return ?

Thanks
MTR

 

Or could be exit strategy or anytime really.