It's the portfolio $$$ that counts not the number of properties

With property in many states and markets at least something is always growing provided they are not crossed you are much more likely to have new equity available for you next deposit and purchase.

 

Highly unlikely but even if that did happen, I would be much happier to sell down, pay off debt and still have a handsome sum of net worth left over. Sure beats working my entire life, left to retire at 68 (many will be forced to work till much later) on the poverty line. hell no.

I know it sounds harsh, but the reality for many IS going to be harsh. Not trying to make others feel down, but rather a wake up call to really evaluate what your superannuation is going to be worth, minus all your bills etc and then work out what's left for a retirement...

For those who have a chance to steer their ship away from that ending, its best to start asap imo. Even 2 ips now plus their super will make a huge difference to their retirement.

 

I actually think it is the net worth of the person is what really counts.

Person A has 10 houses at 500k each being located in Syd, Melb, Bris and @ 80% LVR, no shares and only 10k in cash.

Person B has 5 houses at 500k each being located in Syd, Melb, Bris and no loans but also has a 300k share portfolio and a further 200k in cash.

Person B is worth a lot more yet only has 1/2 the amount of houses and could easily double their portfolio if they wanted to.

End of a day it isn't a competition but I agree with the principal the thread is trying to communicate being that a person might not have as many houses but they have better quality assests and could be worth more.

 

I suppose depends too on what stage they are up to. Person B does have more now, but if Person A's 10 houses are quality, and they are still in it for a few more cycles, then I'd imagine A would overtake B at some stage. But like you said, B could also pull out equity and go on a rampage also....So...it would depend on when A would want to consolidate.

 

Not impossible, but not probable either.
The country will stand still.
Too out of big four got Billions from FED in 2008 to stay float

 

http://www.dailytelegraph.com.au/re.../story-fni0cly6-1227533445956#social-comments

$3 million dollar portfolio spread across 22 properties- mainly unit blocks.

 

It seems that having "x amount" of properties is just used by Nathan as marketing, rather than to achieve a financial goal. Seems to be working...

 

I'm sure he's achieved more financial goals than most investors in Australia could dream of ever doing. In my opinion there is nothing wrong with having 100 properties. Some might be very positive, others for growth, others for development potential, others for long term hold etc etc. Nothing wrong. No one here knows exactly what his goals are, his in depth strategies, plans etc

 

+1 on this.

Doing something is better than doing nothing. Super is not the bright shining light of retirement dreams that a normal person on the average wage is banking on. Unless you're higher income or a Public Servant Salary Sacrificing into Super, but who on an average wage can afford to do that? Not many I'll wager. And I do mean a REAL average wage, not the National average. Because there is a difference.

 

And their PPOR is included in this? Interesting article, the comments list on it are worth a read too. So many haters.

 

I can't imagine an experienced investor, except maybe Nathan, would choose to accumulate 3 mil of these type of properties in 12 months.
Are they even worth 3 mil or is that their opinion on what they think they are worth?
Anyway, the strategy just doesn't seem right.
Small, cheap strata units in remote areas have high costs and risks involved, and they have leveraged this at a very high rate based on their current position.
It's a huge risk to set up like that.

 

Completely agree because I think if you have an aggressive expansion like this, what about your contingency/ back up plan if things become pear shape?

 

Maybe these properties get "recycled" via the buyers agency if someone wants out?
Double commission...

 

Honestly I never thought of it this way... thanks guys.

 

As long as it's not quality stuff that you are letting go off to buy somewhere there is no prospects

 

Agree @MsAli ...quite a few people have asked me if they should sell X property to buy in Brisbane. When I looked at the property they wanted to sell and what they wanted to buy. .I wanted to

Personally I'm not a fan of selling especially if someone is in the accumulation phase. I much rather they just extract equity and reinvest. Definetly not sell quality assets to make highly speculative buys. ....just my opinion

 

Agree Leo. It's cost of doing business - land tax, CGT etc. Might as well sell all properties in Sydney and buy somewhere you don't have to pay much...but you don't get much CG either.

It's mindset - abundance.

 

Can I assume the 'X property' as 'Western Sydney property'? If that is the case then I'm not sure if holding on to a WS IP or buying in Brisbane is more speculative (assuming they are not going backwards in their net position).

In my case, I did sell a CGT exempted WS IP and bought two IPs in Brisbane for similar value. Don't get me wrong. I will be happy if WS goes up in value because my home is in Inner West

I don't think there is one single right answer. It all depends on each person's current situation and their future plans.

 

Sash's example is a very good opening to really think about what your exit strategy is, for your investing as you get to downsizing and retirement time.

The problem is; some people misconstrue an "Exit Strategy" from what I can a "Handbrake Strategy". An exit strategy is a controlled gradual relinquishing of something (I.e. looking for a way to sustainably exit the full time workforce; or looking at gradually downsizing a portfolio as your merge into your retirement years).

A handbrake strategy is a "****, I need to pull the pin - and fast - because everything is going to ****". So, examples might be the economy coming crashing down and you need to bail out of some investments - and fast - to free up capital. Or, a significant personal circumstance change.

It's important to have both strategies, I believe. Not being cheeky, but mine look something like this:

Exit Strategies: First one; gradually transition out of full-time employed work and into living off rents on the property portfolio. Then, later; gradually sell down some properties over several tax fin years as I transition into retirement, to pay down the remaining properties and own them outright

Hand-brake Strategy: If Aus ever went to complete **** economically; fire-sale everything, and move to northern Brazil, buy up some cheap beach-front houses, and air-bnb them out to German backpackers whilst laying in a hammock sipping Pina Coladas (or something similar)

 

Mate you are spot on.....people spend a hell of lot of time on how to acquire assets but don't think about the exit strategy. This can be a wealth destroyer. Can you imagine.. lets say you bought 2 properties in Sydney for $500k and even in a down market they are now worth $1.5m.

That leaves you with $1m in gain...even with the 50% CG discount...you will need to pay tax on 500k..or the equivalent of 220k...not great position to be in....though you have made about 780k.

The Hanbrake strategy is silly and a potentially a wealth destroyer. The Exit strategy and gradual downsizing if well thought out and executed is the winner in my eyes.