Retirement Incomes....will you be in the top 3%!

That idea has some merits....once you get past 80...you tend to travel less...and spend more on health. I too am looking to ramp up spending in the 60s...no point have it all sitting there in your 80s....

 

No point being the richest person in Rookwood!

 

Correct!

 

It may not be free, but it will pay for breakfast, lunch , dinner and dessert for the rest of your days. Single dwellings with vanilla yields wont.

 

Also what some may forget many people in such places can afford to buy instead of rent (Orange, Bathurst, Goulburn...). Now some places are cheaper to buy then to rent!

 

Ahh no, I've got a fixed price quote at 315k including site costs, 500 cut and fill sideways across the block.

40k for landscaping/driveways/retaining walls >600mm
315k build
200k land
555k

Rents in the area are around 380-400 for 3/2/1, and 270-290 1/1/1

680~
6% gross

 

Sure, provided you can get the deposit together and qualify for a loan. Remember, it's cheaper to buy than rent in Sydney and Melbourne as well, yet many still rent

 

These stats are completely inaccurate.

In 2017 around 80% of retired Australians received a PART of FULL pension. Until December 31, 2016, couples who held more than $1 million in assets (in addition to the family home) were eligible for a PART age pension. Since January 1 2017 the age pension assets test is much stricter, which means a couple can own just over $816,000 in assets (in addition to the family home) before losing the age pension entitlement.

In March 2017 singles on the FULL aged pension were receiving $877.10 a fortnight ($797.90 base, $65.10 pension supplement and $14.10 energy supplement). Couples were receiving $661.20 a fortnight each. A single can receive the FULL age pension whilst having 250k of assets apart from their PPOR. A single renting can receive the FULL age pension whilst having 450k of assets. Couples can receive the FULL age pension whilst having 375k in assets excluding their PPOR and 575k in assets for renters.

 

Many retirees who receive either a Full or Part pension also receive a health care card which provides cheaper prescription medications along with cheaper consultation fees at the Doctors. Many speak of this as being of great value.

 

Incorrect....remember dwelling age with time what seems new now will be old in 10 years time and till require maintenance. Was this factored in?

Without capital growth...you could be in trouble....

 

Yes that is correct...and these areas are separated from major metro areas...so when employment drops or changes. there could be an oversupply.

The demographics in these areas prefer freestanding houses.

 

I think you are not looking at the impact of the assets as well as the income test on final income.

This might help....
https://www.noelwhittaker.com.au/resources/calculators/age-pension-calculator/#:~:targetText=Income%20Test,-From%2020%20September&targetText=From%2020%20September%202019%20a%20pensioner%20couple%20could%20earn%20%24308,included%20in%20the%20income%20test.

Let assume a couple today aged both 66 year old and have the following assets:

1. Home - worth 800k (exempt from assets test)
2. Personal assets including car at fire sale prices - 20k
3. Super in pension mode combined - 380k - income from pension is 16k pa
4. Fully paid off Investment property - 350k - income from IP 16k pa

So they have 750 in assets and 32k income (1230 per fortnight income)

So they would have $340.50 in income from Centre so that would provide an income of $40,883 per annun including their pension/rental income. As @TAJ points out they also have health benefits.

This pretty good compared to a couple with the following scenario:

1. Home - worth $1m
2. Personal assets including car - 30k
3. Super in pension mode combined 450k - income in pension mode 18k
4. Fully paid off IP - 420k - income 18k

In this case the couple is actually worse off...they have 36k income and have health benefits.

With the changes 2 years ago....there are a lot more people with assets over 850k..for couples. Just having 1 property in Sydney and some super take people over this amount. The issue is income from property is very lumpy...so the 36k in the example is very lumpy...and chances are it could be only 32k over many years.

This is the real issue most people are not really au fait on the returns they can expect. The government is more reliable for income. As inflation and rates fall futher...even people with $1m in super might have to consider less income unless they are prepared to erode capital.

 

That looks incredibly cheap...if that is case build it....are they prepared to put this to contract or is it subject to soil tests, etc?

 

Soil tests have been done already, site costs are calculated, itemised fixed price quote has been completed, will be ready to pull the trigger when the subdivision certificate is issued, only took a $100 deposit to get the survey and soil tests completed.

 

You might be onto a good thing....

 

Anyone can access these prices through Dixon much like I have, remote locations cost more due to the availability of materials and getting trades there, but its just a matter of selecting the locality on their website (over 1900 designs available and many dual-occs etc).

 

Yes and no.....depends on quality.....in Brissie they were not good value. ....

 

I agree, there will always be people that will rent for varied reasons, but my observation was from purely demographic point of view. We would need to analyse the population of each suburb, incomes, median prices and so forth...
Looking say at those two in comparison:
Compare Australia Suburb - Bathurst, NSW vs Campbelltown, NSW
So you would require a smaller deposit, since lower median price, not much variance in incomes, and then it really depends whether the population demand is there for such a product.
You see personally I prefer to invest in more diversified income and populated suburbs as the concern for me with these places become heavily investor based where most investors can enter and afford OR will there be owner buyers too as more will be able to afford?
I hope I have explained what I meant by that...?

 

And again I say,... after 30 + years of massive growth in big cities - we still have only a tiny % of people who have turned that into a strong retirement income stream.

 

Some are after income and some are after CG. Doesn't mean one is better than the other but rather what one prefers, IMO. Like we like our cup of coffee or tea differently.