How many properties does one need for $50K income

I saw this post on another forum and thought I would canvass it here. I dont see why one would need to have so many properties to earn the income they suggest. Surely it would be easier just to pay off some of their debt to increase their cash flow on a few properties ?

I mean you could have 10 properties fully paid off and be making $100,000 in income eventually.

” Rajohn, you said this in one of your posts:

If you imagine having 50 properties producing $10 per week you have $500 a
week net PASSIVE income (increasing), that is great to be retiring with.
Is this before or after taxes have been taken out?

See, $500 x 52 (assuming you have a tenant year round) = $26,000. Hardly a good income to be retiring on. That is assuming you have taken tax out.

If tax hasn’t been taken out, then, because this is cashflow positive, then the Govt. is gonna want a piece of it. So, they will take out 30%, which is the marginal rate on that amount which = $7,800. So you are then left with $18,200. It’s different if you have a trust set up, but that’s for your accountant to work out for you. I’d hardly call $18,200 a great retirement income, actually $26,000 isn’t too great either. That’s less than I make now, and what I make now ain’t so great.

See, for me, this is where positive cashflow really falls apart. Note – this is my OPINION, okay? I don’t want to get into yet another pos vs. neg argument, I’m just doing the numbers.

So let’s assume you want a better income in retirement, let’s say around $50,000, just for the sake of ease of argument. That’s after tax, by the way. Now, with positive properties like the ones that Rajohn is talking about, you would need to have 209 properties each getting $10 a week to attain an income of $50,000 a year.

How’d I get that? Well, again you have to think of taxes. To get an income of (around) $50,000 after tax, you have to be making $100,000 before tax (well, it would be $51,500 with current tax rates). That’s 209 properties. Yes, you would need to have 209 positive cashflow properties each returning $10 a week to get even a half decent income in retirement. I got that figure thusly: multiply $10 by 48 (to allow for vacancy), then divide $100,000 by that number. So you get 10 x 48 = 480. Then, 100,000/480 = 208.33.

Think you’re going to be retired with 209 properties to look after? Are you even going to be alive? How long do you think it’s going to take to get that many properties? Imagine wanting an income of $100,000 after tax! You’d need 417 properties.

Yes, I know the rents go up, but they don’t ALWAYS go up every year. Sometimes they even out, sometimes they even drop. It’s very much the same thing as cap growth, some years are good, some years not so good, some years terrible. Even so, most pos cashflow properties have reasonably low rents (by city standards), so rents that are going for $100 – $150 p.w. (just a guess here, I don’t look at regional props), you ain’t gonna be putting them up by large amounts every year, are you?

But let’s say that $10 a week was $20 a week. According to my calculations you would need 104 properties for an income of $50,000 after tax. For $100,000 you would need 208.3 properties. Let’s say you did really well and managed $30 a week. You’d need 70 properties for $50,000 after tax and 139 for $100,000 after tax. I’ll leave it there, the numbers really do speak for themsleves.

Mark

‘no hat, some cattle’ “