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$1m on a lower income – how to do it, for real

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Your Investment Property | 16 Mar 2012, 12:00 AM Agree 0
Could $1m in property be possible on a lower income? This is a question we posed to three accomplished property investors. They explained how a real person, earning real money in a real economy, could do it
  • Steve G | 15 Mar 2012, 02:29 PM Agree 0
    OK sounds nice and easy.
    Now lets do the same exercise on a more realistic scenario:
    - married couple with children and no savings;
    - have plenty of outstanding debt;
    - bank owns my home.
  • Irene L | 15 Mar 2012, 04:21 PM Agree 0
    this gets me excited! what a useful article! I will compare this with the circumstance that I am in. Can't wait to read Margaret and Brendan's strategies.
  • Skeptical | 15 Mar 2012, 07:06 PM Agree 0
    I think you are living in a utopia where there are cheap property mgmt fees (7.7% is very very cheap). Also, this couple has to be extremely lucky to have no major financial requirements during that 10 year period. Is there an emergency fund? What if they don't have any tenants for a period? And no dependents right now -- maybe in 5 years? What if it is an unexpected pregnancy? Wow, you have really got this couple's hopes up! I would be advising this with HUGE HIGHLIGHTED paragraphs saying this is possible if there are no hiccups during your 10 years -- and nothing ever does. Dream on! I think it was possible for someone 20 years ago to have the average salary and achieve this when prices were really low. I am looking for an investment property in Perth and cannot find anything that I can rent out immediately (kitchen and bathroom not needing upgrades) for under $400K 20 kms around the city -- new houses 50kms away are $400K so good luck getting these properties in QLD.
  • Unlikely | 16 Mar 2012, 02:18 PM Agree 0
    7% annual capital growth for the next 10 years... good luck with that!
  • jules | 16 Mar 2012, 04:06 PM Agree 0
    We have several properties in our family. Two have management fees of 6.6% and two are 5.5% and the others are 7.7% - all with different agents in Melbourne.
  • Matt | 16 Mar 2012, 04:19 PM Agree 0
    Skeptical - I don't know Brendan, but Margaret is the real deal. This is doable. I'm doing this basic strategy. 3 properties in under 2 years. Average rental yield of 12%. Property management fees of 4 - 6.6%. I keep a good cash buffer (1 years salary) to cover off on any unexpected hiccups along the way. I think you are right in that it would be hard to do this by investing in a metro area - the yields are too low. To work through your scepticism on this I recommend any of Margaret's books (no affiliation) or any of Steve McKnight's books (no affiliation). Good luck.
  • Wendy | 19 Mar 2012, 02:01 PM Agree 0
    How about a couple in their 50's, husband working fulltime on $54k with wife at home and two teenagers to look after on Y Allowance.
  • jwok | 10 Jan 2016, 07:10 AM Agree 0
    Here is another scenario: Husband and wife, both own their own businesses, both sole trading carpenters, banks hate them and won't lend them money! Such a waste having two carpenters in the family and not being able to buy, renovate, sell, etc.
  • Ryan | 17 Jan 2016, 03:39 AM Agree 0
    If you were to follow the fool who in example 1 advised to you to purchase in Dysart (QLD mining town)you would of lost your shirt with prices of houses falling from $580k to $90k.
    • Bill | 25 Aug 2016, 02:26 AM Agree 0
      What happened in Dysart for that kind of price drop? Did a mine shut down or something?
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