Property for cash flow?

[investorak]

I guess there is no guarantees but if i think big picture.
6million in property gaining 10% roughly each year. 600k per year tax free.

How much money do you need/want?

Keeping means your cash wont be turned into smaller amounts due to inflation/others leveraging.

Have you brought houses? units?
How many properites and income streams do you have?
Subdivided each one?
Do you have a thread on your story?

I am fairly fresh to the property game so curious to know what has worked for you

[Wayne]

I guess there is no guarantees but if i think big picture.
6million in property gaining 10% roughly each year. 600k per year tax free.

How much money do you need/want?

Keeping means your cash wont be turned into smaller amounts due to inflation/others leveraging.

Have you brought houses? units?
How many properites and income streams do you have?
Subdivided each one?
Do you have a thread on your story?

I am fairly fresh to the property game so curious to know what has worked for you

I see your point - but that relies wholly on capital gain which isn't guaranteed.
It could be said the same for shares + they provide better than property in dividend return.
Property doesn't gain 10% per year, every year like clockwork but, I suppose, in lean years you still have equity to remove so you wouldn't starve.
Food for thought!

10 stand alone houses, 3-4 bedroom in the upper quartile of quality (not bottom feeding).
No I don't have a story out there - I suppose I'm not a trumpet blower.

[richard56]

You have done really well. congratulations

You have 6million of rentals, 1 million home and debt of 2 million so a 28% lvr.

Wouldnt a better way to have a revolving account. Use the money tax free and then in 10 years it should have doubled?

Im curious to know how you were able to do so well
What types of properties did you buy and where? how long did it take?
Have you been in a salary job through this time or a business?

Hi
Can you explain how you can use a revolving account to fund your retirement?
I don't quite get it.
Thanks
Richard

[Zorwarrior]

Wayne that is a good portfolio you have built up, congratulations. I know 'someone' with a similar portfolio in terms of equity.The issue definitely is the cashflow return in property, its just too low. To add to that, there is a lot of work managing tenants and managers. I agree though that property is a good long term wealth creation asset, just not a cash cow.

For those of you already retired, what level of retirement income do you deem enough to liveoff, assuming you have a family of some sort (kids etc), especially if you live in the bigger cities like Auckland..????

Retirement is definitely a goal I am actively working towards and I have no concerns about being bored. The way I see it, we spend about 30-60 years of our lives preparing for (school, Uni) a job and then working a job/business. No matter what anyone argues, the MAIN reason for a job/business is to make money. Sure there are a few other things like satisfaction, achievement, importance etc but ...see how many people will show up to your office tomorrow if you told them they would not get paid (I suggest none).

30-60+ years of a lifetime spent chasing money is to me quite a underwhelming life. Sure we have other aspects of our lives within that period but the majority of it (8-10 hours a day) is spent on doing work to get money, to do the things you want to but dont have the time.

So retirement to me is about living, helping, achieving, accomplishing BUT NOT with a monetary angle to it. I am involved in many charities and plan to basically get involved almost full-time doing meaningful work, not just for the sake of money. Sure some jobs are meaningful (social workers, nurses, etc etc) but not many people want to do that as the money is terrible. As MMM (Mr Money Moustache) says in his posts as well, work is much better, when its not for money.

[simongu]

Hi Wayne,

Congratulations getting to your position. Very similar to ourselves ($8m rentals, $2m home, $3m debt, high earning but fallen out of love with it, looking to travel), and have been looking at how to convert this equity into "retirement" income, given the difference between the ~3% net yield on property (cf to ~7% when we started investing 20 years ago) and fairly safe alternatives out there.

For what its worth, my plan is to sell down "enough" but rather than invest in stocks etc directly will invest further into PIE funds - conservative funds from a quality provider currently return ~6% pa tax paid. No worries about selecting / following stocks, and having risks of insufficient diversification. No I am not a financial adviser / get commissions or anything like that, this is what I do now with part of my income, and plan to ramp it up with a capital injection - timing somewhat dependent on election result!

Good luck with whatever you do

[Wayne]

For what its worth, my plan is to sell down "enough" but rather than invest in stocks etc directly will invest further into PIE funds - conservative funds from a quality provider currently return ~6% pa tax paid. No worries about selecting / following stocks, and having risks of insufficient diversification. No I am not a financial adviser / get commissions or anything like that, this is what I do now with part of my income, and plan to ramp it up with a capital injection - timing somewhat dependent on election result!

Seems we are in similar positions and have come to similar conclusions.
Stocks or direct - I'll choose later when I have sold.

[Zorwarrior]

Simon, are you going to keep some of the rental property or just your home? If so, what is your reason to keep the properties, given the low returns? Well done to you as well!

[simongu]

Zor, will still keep some rentals despite the crap returns, partly for diversification of income stream, partly because I get satisfaction maintaining properties, partly for asset security (against eg stock market crash), and partly with a view to future capital gains, we may wish to 'swap' for an apt overseas somewhere we visit frequently

[Zorwarrior]

Fair enough, makes sense Simon. The relative ‘security’ of property is the main reason I hold on as well. The risk of the value eroding by 50% or more is very low but in stocks it’s much higher. Of course, natural disasters have added a whole new level of risk on both fronts. I have been burned by shares before, so am still wary but its going to have to be overcome to get some kind of reasonable income to live on..time to study me thinksJThe relative ‘security’ of property is the main reason I hold on as well. The risk of the value eroding by 50% or more is very low but in stocks it’s much higher. Of course, natural disinters have added a whole new level of risk on both fronts. I have been burned by shares before, so am still wary but its going to have to be overcome to get some kind of reasonable income to live on..time to study me thinksJ

[Beano]

Hi Wayne,

Congratulations getting to your position. Very similar to ourselves ($8m rentals, $2m home, $3m debt, high earning but fallen out of love with it, looking to travel), and have been looking at how to convert this equity into "retirement" income, given the difference between the ~3% net yield on property (cf to ~7% when we started investing 20 years ago) and fairly safe alternatives out there.

For what its worth, my plan is to sell down "enough" but rather than invest in stocks etc directly will invest further into PIE funds - conservative funds from a quality provider currently return ~6% pa tax paid. No worries about selecting / following stocks, and having risks of insufficient diversification. No I am not a financial adviser / get commissions or anything like that, this is what I do now with part of my income, and plan to ramp it up with a capital injection - timing somewhat dependent on election result!

Good luck with whatever you do

Great result $8m in rentals is not a easy achievement in a lifetime but to achieve that in 20 years is fantastic

[simongu]

Thanks Beano. Of course it only happened due to "luck" and exploiting others, working my ass off overseas for 7 years to raise capital was completely irrelevant and hence what I get out of this is "unearned income", and anyone wanting to replicate what I have done should look to the Gummint for assistance