Robert,

The banks won’t let me have less than 20-30% equity so with a portfolio of 2 million now and 4 or 6 million in 15 years time I’ll have about one million left in the bank. That’s if I stop investing and developing now.

…so if I have to sell up at 60 or 65 I’ll be left with a certain amount of cash, now you tell the rest of the story…

A fascinating train of thought from Michael, Robert, Mark and so on…
I’m in a position where I could live off the equity, in fact I did for the last year while at the same time started a new job(business) and bought an IP with the intention to develop it.

A few questions to Robert…
In 10-15 years what will happen to the cashflow (rents) from the IPs? Do you expect that they remain at the same levels or will increase with inflation?

Do you recall that Michael suggests using part of the equity to fund new projects? The simple 2 lot subdivision I’m trying to do should create a block worth at least $150K while the value of the existing house on subdivided land would not be much lower than what I paid in the first place. Then I’ll have the option to sell and pay tax or build and hold so I can borrow against the newly created equity….does it bother me if the prices remain a bit flat?

By the way, historically property prices (more than)double in every ten years and if you recognise the cyclical nature of the market then you won’t panic when prices start to fall….quite the opposite, you will see opportunities everywhere you look…

I’ve only been in this game for 3 years and the money I invested in education is under $2,000…maybe I’m a quick learner ….BUT…Michael doesn’t need these seminars to live off the fees, he’s doing them probably because he is keen to pass on knowledge and enjoys this type of work, the interaction and challenges so I say, good on him….everybody has a choice to pay him or ignore him….

..as I said I’m still not sure how it works….so I assume that for a 2 million portfolio your land tax is over 15K (1.7% over 175k) which is an expense when calculating your income tax? Although if you live on borrowing against your equity then this is just another cost on top of your interest payments, right? Still short of the more than 50% if you’re on a salary or business income.

If any of you are interested in subdividing 75 acres in Kilmore, Victoria, please get in contact with me. I am not the owner or their agent, just got the information through a friend.

I’m thinking of doing the same thing in Victoria. I have two or three properties in mind and won’t rule out a joint venture if anyone is interested. Plus I wonder if anyone has the same problem with this site – that is, I log in “successfully” but when I try to edit my account settings the access will be denied. I’m trying to change my subscription details as my email inbox gets blocked.