Have you ever wondered how many properties you need to be able to retire on the rent from the properties you own? If the rent you received from your investment properties replaced your income, you would no longer need to work.

This article shows you how to do the calculation. I have used figures that are real for me, and based on the area where I live in Australia. Rather than using average figures or statistics, I’m using real figures based on the type of property I own. I would rather teach you using a real example, and then you use your own specific figures based on your specific circumstances.

The income I am aiming to replace is $62,000. The current median price of property where I invest is $450,000. The median rent of property in that area is $425 per week.

The average annual cost of owning one of these properties are:

Rates: $2,200
Body corporate: $2,800
Insurance: $400
Property management fees: $1,900
Repairs, maintenance and other: $1,000

Total costs: $8,300 per year or $160 per week.

So, I am earning a total of $265 per week per property. This was calculated as $425 rent per week less $160 expenses per week. This is a total income of $13,780 per year.

So how many properties do I need to replace an income of $62,000?

The answer is five, calculated as $62,000 divided by $13,780.

Based on the specific figures used in this example, you would need four properties to replace an income of $50,000.

You safe cialis may have noticed that I did not include loan interest payments in the calculations. This is because Levitra you need to own the properties outright. No loans on the properties, and therefore no loan interest expense.

You now have a structure for a goal. For example, to replace an annual income of $62,000 by owning five investment properties outright.

Having the goal is the first step. Now you need strategies on how to achieve that goal. You may be happy to pay down the loans slowly over time. The strategy we are applying is to buy more than five properties over time. As the properties Kamagra Soft appreciate in value, sell some of the properties to pay down the loans. You could then be left with five properties you own outright.

This example has solely looked at the rental income you can earn through property. There is a whole other aspect of earning capacity that we haven’t looked at: capital growth. It’s generally said that property purchased in a good location, doubles in value every 7 to 10 years however this depends on many variables in the economy. If you are holding a minimum of five good properties in your property portfolio, over time a wealth of capital growth will be building.

But that is an exciting topic for another day …

Author Bio: Suzie Crawford works with people who are tired of working for others and want expert guidance on how to make money through property. Register here for free 8-week online Training Program PLUS receive bonuses to the value of $162. http://www.youcan.com.au

Category: Personal Development
Keywords: how much to retire,create wealth,creating wealth,wealth creating,wealth creation,personal wealth,property portfolio,property investing