Working out How Many Properties are Needed to Reach you Goal

Discussion in 'Investment Strategy' started by Terry_w, 26th Mar, 2016.

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  1. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Settlement was a last minute rush, but after a 2.5 year wait, the new office is mine! Builders have already started the fit out. I'll be working from here in 2021.

    20201215_070004.jpg 20201215_065552.jpg 20201215_065536.jpg
     
    Peter_Tersteeg, 16th Dec, 2020
    #81
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  2. spoon

    spoon Well-Known Member

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    I thought everyone is WFH from now on and moving to regionals, why a new office? ;)
     
    spoon, 16th Dec, 2020
    #82
  3. Blueskies

    Blueskies Well-Known Member

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    Are you sure about the maths here? If you want $240k/yr that means each of your 5 properties needs net yields of nearly $50k/yr . Your gross yields before tax, management, maintenance, insurance rates etc would likely need to be up around the $400k/yr to have any hope of getting that type of return. I would think you would be looking at $8-10M of high yielding/commercial property to reach that target.
     
    Blueskies, 16th Dec, 2020
    #83
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  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Signed the purchase contract about 2 years ago (it was off the plan). I've been office hopping for almost 3 years. This office will cost me less than my business was paying in rent, so it effectively means I'll own another property without and improve my cash flow, with more space. It's in an excellent location and will likely get a decent rental income over the long term. It's effectively a bonus in the overall plan.

    WFH is good to a point, but I've been struggling with efficiencies between my staff and I. Getting everyone back into an office will hopefully have things running a bit smoother next year.
     
    Last edited: 16th Dec, 2020
    Peter_Tersteeg, 16th Dec, 2020
    #84
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  5. Redom

    Redom Mortgage Broker Business Plus Member

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    Congrats @Peter_Tersteeg, that is a very nice place to walk into daily and call your own.
     
    Redom, 16th Dec, 2020
    #85
  6. Blueshoes99

    Blueshoes99 Well-Known Member

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    Yep, I live in Sydney so even one property in a good area is over $60k in rent per year - that’s today’s price - in 20 years it will be $70k for one property. I think I’m being conservative here ...
     
    Blueshoes99, 16th Dec, 2020
    #86
  7. bythebay

    bythebay Well-Known Member

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    do you still remember this post Terry ><
    Would you update or change any of your steps
     
    bythebay, 23rd Jun, 2021
    #87
  8. Terry_w

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

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    Yes still remember it and I think it still stands - lots has changed but the numbers of maths behind it hasn't. You might need to assume lower yields now and factor in lower interest rates.
     
    Terry_w, 23rd Jun, 2021
    #88
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