My 7-10 x 7-10 Strategy
Brett Alegre-WoodChairman, YPC Group
This perhaps the simplest of all strategies. Quite simply it is:
Buy 7-10 properties and hold them for 7-10 years and you will have secured your retirement.
So, buy 7?10 properties and hold them for 7?10 years. The property is going to double in value, which will create a significant amount of equity; this will then self?fund your retirement. At the end of the day, that?s what it?s all about ?reaching a position where your retirement is fully looked after.
Why do I think 7?10 properties doubling over 7?10 years will be able to fund your retirement and provide for your future better? The value of your portfolio will have doubled, your rents will have doubled and your costs will have remained low, because you have only paid the interest on your mortgages.
It doesn't mean you'll have a lifestyle of the rich and famous but you will have a greatly enhanced lifestyle and be able to comfortably retire.
Let's take a look at why (I am making assumptions about the amount of capital you have upfront.)
* Year 0 - You buy 10 properties each worth $100,000. So you have $1,000,000 in property. Each of the properties has an 85% mortgage and covers it?s costs on a monthly basis once you take into account negative gearing.
Jump forward to Year 10?
* Year 10 - The portfolio had doubled to $2,000,000, you have continued to pay interest only on the mortgages so you still owe $850,000.
By this time the rent should have doubled. In truth we don't know what rents will do but they will certainly been larger over 7-10 years.
The important thing is can it provide for your retirement. To create a $50,000 income you would need to ensure at least a 7% return each year. Assuming 2% inflation rate. For property to double every 10 years it requires a 9% increase at least.
So in short, yes - you can retire on that. But the reality is that you wouldn't just buy 7-10 properties and stop. You would re-mortgage constantly and buy more.
The sky is the limit!
Call the team on 1300 533 713 and find at how we can help you achieve a self-funded retirement.
Live with passion,
Brett Alegre-Wood
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