How many investment properties do I need?

How many investment properties do I need?

I’m often asked how many investment properties do I need to have a worthwhile portfolio and the answer isn’t always that simple. There are a number of things to take into account.

  • What age you are now?
  • When do you want to retire?
  • How much is in your superannuation?
  • Do you own the home you’re living in?
  • Are defined benefits part of your employment package?
  • How comfortable are you with debt?

So many more factors to take into consideration.

Everyone’s circumstances are different and this needs to be fully explored before I can give you a definitive answer. However, for the average person / couple I recommend a minimum of three properties. For others it may be five plus – it’s a matter of me reviewing your personal circumstance and coming up with the best strategy.

If you have at least 20 years left to work, this is achievable without hassle. The less time before retirement, the more assertive you may need to be in your strategy but it’s still achievable.

I’ll give you an example: Harry and Jenna are 46 and 45, both working full time, with two kids in secondary school, owe $100,000 on their own home and are looking forwards to how to finance their retirement. With good equity in their home, consistent income and borrowing capacity of $900,000, Harry and Jenna look at buying two properties. One is a house and land package to be completed in six months. The second the land won’t register for 18 months and building completion in two years. This staggered plan works well as they secure the properties as today’s prices. Once the second property has finished completion and tenanted, they plan to look at a further property.

If you haven’t attended one of our Dining Table Sessions, I encourage you to book your seat here and come along and learn from our educational session and learn more about what you can do to take that next step.

As always, if you have any questions, leave a comment below.

Until next time,

From the desk of Christine.

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