At Purely Finance, we broker home loans and investment loans in the Perth area. Often, the two areas come together and we broker a home loan for an investment property. Since legislation was passed allowing Self Managed Super Funds to obtain investment loans, more and more small investors have begun to use real estate to help secure their futures.
Eventually, everyone asks us one important question: “How many investment properties do I need to retire comfortably?”
The answer is that there is no answer that works for everyone. Everyone’s financial needs are different. An individual financial situation includes factors such as debts, assets, liquidity, projected retirement date and projected retirement lifestyle. Here are some tips to help you figure out how many properties you need for your individual situation.
Financial Planning
Once you have a plan, it then becomes a matter of executing it. The first thing to do is figure out how much income you will require. For example, if it is $125,000, then you could have five properties that yield $25,000 per year after expenses. Expenses include maintenance, property management strata levies and “emergency funds” for situations such as a new roof or two months’ vacancy.
One of our financial planners can help you come up with a plan.
Capital Growth
It is capital growth on your properties that funds your retirement. If there is no capital growth, your money isn’t making you any money. Capital growth enables you to buy more properties by using the equity on one as a down payment on another. This can be repeated as often as you are able.
Start Now if Possible
The sooner you start, the sooner you start making money. At Purely Finance, our financial planners can help you come up with a plan for success. Then you can talk to one of our mortgage brokers who can help you obtain a home loan. Call our Perth office today: (08) 9453 8888.