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To get the right answer you have to ask the right question, wouldn’t you agree? So rather than ask “how many properties do I need to retire”, ask “how much income will I need to live comfortably”, and then calculate your needs from that point.
For example, let’s say you’ve decided you need approximately $140,000 dollars in passive income each year. How would you achieve this goal?
For the purposes of this example, let’s suppose you’ve invested in six properties over 10, 15 or perhaps 20 years and have paid off all the debt on your properties. Assuming an average property value of $350,000, you’d have a total of 2.1 million dollars worth of real estate. (These figures don’t assume any capital growth at all)
You may be wondering how in the world you could pay off so many properties so quickly. It’s certainly very possible, if your investments are efficiently structured, to achieve such a goal. At Positive Real Estate we’ve helped hundreds of property investors achieve these kinds of results. We can show you how!
Now let’s assume you’re enjoying an average rental yield of 7% on these properties. At Positive Real Estate we aim to hit that sweet spot of between 6 and 7% average rental yield. If we enjoyed a rental yield of 7% we would have $140,000 dollars worth of passive rental income each year and own 2 million dollars worth of properties; free and clear!
Now of course your results will vary because not all properties, despite our best efforts, will achieve this rental yield, and then those which do get a strong 6 or 7% yield won’t necessarily do this each and every year.
This is why investing in property is a proactive endeavour, not a reactive one. We look ahead at what possible impacts certain conditions will have on the market place, especially where our properties are concerned, and we take steps to minimise any potential problems before they become a problem, (e.g. set up a generous buffer to counter any fall in values).
To find out more about Positive Real Estate’s tips and strategies for investing in property, come along to our next Property Investor Nights. There’s no obligation to buy or do anything at our events – just take a bit of time out of your day and learn how you can change up your current investment strategy – or perhaps start a new one!
For more information about these free events, click here – you’ll be glad you did!