X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Stickies & Evergreen

    Portfolio - magic number to give up day job?

    How long is a bit of String ????

    6
    0

    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Zero, or rather my day job gave up on me and being in my 50s looking for a new job in IT wasn't much of am option.

    How much do I need to live off? About £1600pm to avoid needing to be particularly frugal. I mamanged that with my first three properties all boutght for cash.

    £2000 pm allows a few luxuries, and I have been getting a bit more than that from seven properties (with the extra ones being mortgaged).

    2
    0

    Location is important of course but I'd say about 2-3 mortgage free in a decent area.If using mortgages a few more but not too many or it is just becomes a job! As others say it depends what income you want out of life.

    I've been in property all my working life and was probably happiest with 3 BTL's and my own house that I was doing up in the 90's.

    Prop values were about 40k in a good area, yields 15%, sensible LTV's I self managed and had a good work  / life balance. Happy days!

    Since then I geared up and built up a much bigger portfolio with the phone always ringing with tenant issues - it became a job and very stressful. I learnt that BTL income is very far from passive!

    Reduced things a bit now and mostly out to management.

    4
    0

    My goal was always 10. Now I realise that the goal should be to get rid of as much mortgage debt as possible & have fewer high yielding properties
    1
    1

    Work out how much you need to live at a level your happy with then work out how many properties will achieve that.

    The case for leverage, ltv and cash reserve is important along with the ability to raise finance if your no longer working.

    You could have fewer houses with no debt or more with high debt.

    I think the hard part is finding the sweet spot of borrowing as much as you can to maximise your returns whilst insuring it’s low risk.

    The higher your yield the higher ltv you may find acceptable and therefore your money goes further.

    If your plan isn’t to never sell then perhaps to reach your destination as quickly as possible you should focus on finding a decent high yield area.

    Having property with no debt is relatively risk free (ish) but also takes a lot of time in most cases to accumulate, using debt lets you live in the future but comes with risks. The quickest way forward is to iron out the risks through knowledge and achieve your goals sooner. But it all boils down to risk profile.

    Andrew
    1
    0

    Hello Passive W8,

    After pondering this question for the last year, reading and researching around and seeking advice from others who have taken the leap, I’d say a ballpark guide is as follows:

    If reliant on mortgages, I’d say you would need around 12 properties, yielding 6%+, if mortgaged at around 70% ltv across the whole portfolio. That includes expenses incurred on mainly freehold properties.

    Although, if you can get that figure down to 60%ltv then that would allow more security in terms of better mortgage rate options going forward.

    As others have said it is about the lifestyle you want not just the time freedoms offered from being wholly self employed. 

    Also, how big is your family? For a couple with 2.4 kids at state school and if your own resi mortgage is not too leveraged, or you have a nice pension to take at 55 as a lump sum to clear the resi mortgage (assuming that policy doesn’t change) 12 is a nice number. It enables you to leave a legacy to your children with a property each and enough rental income, after capital appreciation in your later years to live on.

    Any more children than that then you would probably   Need a bigger portfolio. 

    A savings pot around 30k plus behind you in cash would be beneficial for eventualities with the properties. If you are a risk taker, it is not essential.  


    0
    0

    Tried to edit last post but can’t ..

    If no mortgages, then that’s not an area I’m familiar with. Although the answers would be a lot clearer as you have more security and leverage. 

    0
    0

    My magic number is 20. I like the finer things in life.

    0
    0