Next move: IP2 or ETF?

Discussion in 'Investment Strategy' started by Sam Lee, 9th May, 2021.

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  1. Sam Lee

    Sam Lee Member

    Joined:
    6th May, 2021
    Posts:
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    Location:
    Sydney, NSW
    Hi All,

    I have been thinking about my next move to achieve my (early) retirement plan and would like to get ideas/opinions from others & experts here. I am deciding between a) buying a second IP (somewhere in Sydney), or b) investing more in ETF (which I have just recently started). Also, open to hear other options too (though, not quite into share trading).

    Below are my scenarios.

    - Salary - $150K pa (gross) + super & Rent from IP ($550pw)
    - PPOR (Sydney's inner west) ~1.6M, 450K loan I/O at 2.98%, 450K in offset (Note: PPOR was initially purchased as an INV)
    - IP1 (Illawarra, NSW) ~850K, 751K Loan I/O at 3.04%, 500K in offset
    - (Total property assets ~2.45M, total Loans 1.2M, total owing 250K)
    - Managed funds ~$150K
    - Single, no kids, 47yo, no other liabilities (car, credit cards')
    - Goal - to be able to retire with passive incomes in 5-8 years

    Note: currently have pre-approval for another $500K loan for IP2 if I were to proceed.

    Love to hear your thoughts.
    Cheers.
     
  2. Trainee

    Trainee Well-Known Member

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    How much passive income are you after?
     
  3. Sam Lee

    Sam Lee Member

    Joined:
    6th May, 2021
    Posts:
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    Location:
    Sydney, NSW
    At least $4K/m.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Why is it one or the other? Why not both
     
  5. Ryan23

    Ryan23 Well-Known Member

    Joined:
    16th May, 2016
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    Location:
    Queensland
    On rough numbers you’re probably close if not already there if you include your ppor offset.

    450 + 500 + 100 + 150 = 1.2

    using the old FIRE 4% rule in ETF’s thats 48k per year or 4k per month.

    Obviously there are selling cost etc and now you would have to pay the mortgage...
     

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