Where do you want to be in Five Years Time,.

Well and truly finished my accumulation phase, watching CG take place and LVR's reduce.

By then should be siting on a $11-12M portfolio

Will most likely still be working 9-5, but entering final few years.

Hopefully still healthy and doing more of what I love to do (Family time, Travel, Fitness, Food, Music)

 

Awesome work fols! can you share your story?

 

Sure tomlemke. Here goes....

Early 40's, married with 2 young kids. Both work in corporate sector. My wife and I each bought an apartment in Sydney 2001 before we got married in 2005. Used one as a PPOR. Purchased current PPOR in Inner West Sydney 2007- rented it out until 2010, completed a major renovation then moved in. Was at this time we were having kids/ mat leave etc so no investing during this stage- just focussed on staying afloat. Turned both apartments into IP's.

Took a redundancy in 2012 and took some time off to work out what I wanted to do. Decided I wanted to take control of my future and got stuck into property investment education. I've always been passionate about property. I obviously needed to go back to work to fund the master plan- I went back with a different attitude though.

With some good learning under my belt, and a fair bit of built up equity, I then started a fairly aggressive acquisition period in October 2013. We now have around 15 properties, mostly in Sydney and Brisbane. All going well I am pushing hard to secure another 5 by end of year. The Sydney upswing has definitely helped financing the plan. I've worked out how much income/ money we will need to fund our lifestyle in retirement, and worked back from there.

I am a buy and hold player. I am not looking to be a developer, and I am not that interested in renovating. I look for both yield and CG potential. A property must not cost me any money to hold (That would mean less beer and no holidays). The current portfolio is cash-flow positive. I purchase both freestanding houses, as well as apartments and townhouses. Whilst not all of my properties are new, I do like the depreciation benefits newer properties deliver. I get depreciation schedules completed for all properties, and my wife and I both submit PAYG withholding variations to maximise cash-flow during the year. All properties have landlord insurance, and are managed by PM's. Most PM's are useless. I work hard to find PM's that deliver. If they don't deliver, I get rid of them.

All of our properties are outside of Super. It is unlikely I will go down the SMSF property path. At a point in time, I will start salary sacrificing into Super. This gives me some diversification.

My biggest risk is future interest rate rises. I am looking to fix some loans as we speak. No doubt this will buck trends, but it works for me.

I think having a really strong strategy / plan is key, as is education, research & getting the finance structure right. But at the end of the day, you have to take action. You have to make **** happen. You have to go out and buy properties.

The thing I really like about property, is most people can improve their personal situation. Sure, if you have a larger income you can go at it at bigger scale, but changing your future course is definitely possible.

And who wouldn't want that?

 

Your plan might not work out, there are laws against child labour in Australia!

 

If you don't mind me asking fols what does you current LVR look like? I am a newbie and the concept of an eight figure portfolios on 'normal' income seems crazy/unachievable.

 

The banks take your rental income into account when you apply for a loan, so it doesn't take many IPs for your income to be far from 'normal'.

 

Maybe I am just not ambitious enough

If they didn't take into account rental income I wouldn't have an IP Hehe annual income of 22k at the time But 20% deposit really helped! Hence why I was curious as to LVR. Wondering why the banks aren't running scared

 

Well, they are toughening up on new lends at the moment, and they don't take 100% rental income either, but your serviceability isn't just calculated on your income from your JOB, otherwise most of us would be up the creek.

 

Well, 5 years ago the "exit" plan was that to downgrade the PPOR (and move into IP2) - which meant tax was not that big a factor. That is no so much a part of the mondset going forward.

Hopefully over the next 5 years we have found a way to exit the Sydney market with most of the CG intact and are asking PCers about how to exit the Brisbane market (with similar challenges).

 

Awesome read fols! good on you for having a crack make sure you keep us updated

 

In 18 months I plan to be making my current income with a side business I have been working on. I have become compulsive and obsessive on making this work. With in 2.5 years I plan on running my own business.
My wife thinks I have some compulsive disorder. I just told her " I'm setting goals and re-programmed my self to achieve them. Accept it and enjoy the ride!"

 

Well done fols, a good read.

5 years seems a long way away, and then I'll look back and think oh no, I'm a few months of 40 - sigh..

Short term plan is to buy a block we can build 2 houses on, one for us and one IP, sell another IP that still has PPOR status until jan 2016, put the profit into new PPOR build, plus savings and have it paid off in 3 years. Access equity across 3 other IPs + PPOR and start a decent acquisition phase

 

1. Enjoy a summer in northern Europe with the kids, homeschooling and learning the language/culture.
2. Have an awesome 40th birthday adventure.
3. Pay off a huge chunk off our ppor.
4. Aquire IPs 2-4.

 

Thanks for sharing fols! Very inspiring story.

 

Good question. My 5-year goals are: to have a senior position in a different industry; 40% of mortgage paid off; buy 1 IP; have a cash buffer equivalent to at least 1 year's salary. Modest but realistic and achievable for me. For retirement, I aim to be 100% debt free and to be fully self-funded to have an annual income in today's terms of at least $50k. I don't think I'll ever stop working entirely though.