CoreLogic has released its latest Pain and Gain Property Report which measures the profits and losses of property sellers and while some have made losses, there have been some spectacular gains and Tim Lawless tells us where that has happened.

Some win, some lose in Australia’s big apartment crunch and we identify a big winner as being Wooloongabba. We catch up with one of Australasia’s most successful property developers to find out why he is so impressed with this Brisbane suburb.

Investors and foreign buyers of Australian residential property are being hit hard by two forces, with the apartment market already feeling the heat. While money is cheap, getting access to funds is getting more difficult for local investors and foreign buyers. Foreign buyers are also being hit by additional taxes that are now being implemented in Victoria, New South Wales and Queensland. Given that these groups account for well over 50% of all new apartment purchases, restrictions to finance and new taxes are going to hit the apartment market harder than other forms of housing, such as established dwellings and house and land packages. It’s likely that most apartment markets will continue to see demand; however, there are three criteria that put a suburb at risk, and these are detailed by Nerida Conisbee.

With today’s low interest rates and cheap debt, many investors are finding themselves in a favourable cashflow position.    But as the banks tighten their purse strings, investors need to think outside the square when it comes to gearing into further properties.  So we give you eight strategies to make sure an invisible serviceability ceiling doesn’t stop you from growing your property portfolio. Michael Yardney helps with that advice.

An abandoned house, a missing owner, a mysterious squatter could add up to a young banker taking ownership of a million-dollar home without paying a cent. We catch up with a prominent property lawyer who says it could happen.

I am joined by buyer’s agent Rich Harvey and Chief Economist Dr Andrew Wilson to discuss how many properties you need in your portfolio to retire.  Rich has a simple formula.

 
Transcripts:
How many properties do you need to retire? - Rich Harvey and Dr Andrew Wilson
Kevin:  First up, welcoming into the show, buyer’s agent Rich Harvey from Property Buyer. He’s done some study on just how many properties you need to have in your portfolio that would allow you to retire.

Rich, I know that you’ve looked at this, but is there a formula or a magic number if you’re determining how many properties you need to retire?

Rich:  There are some pretty simple calculations you can do, and I’ll make the math pretty simple, but I always like to start with the end in mind. Stephen Covey is one of my great mentors, and he’s written that book Seven Habits of Highly Effective People.

For property investors out there who want to retire someday, a really simple goal is to go “Well, what sort of income do I want to earn from my passive assets, my passive property portfolio?”

If you want to earn, say, $100,000 in income, the simplest way is to go “On average, across Australia, you should be able to achieve around a 5% gross rental yield.” Divide that 5% into $100,000, and you come up with $2 million. So you’re going to need roughly $2 million of unencumbered property assets.

The next question, Kevin, is how many properties do you need to get to $2 million worth of assets? It’s a bit of a scary number, but effectively, my strategy would be to buy around $4 million worth of property over a period of time, hold those properties for one to two property cycles, and then sell down half your portfolio to pay off the debt on the properties. That should leave you with roughly $2 million to give you your $100,000 income.

Kevin:  So it has to be $2 million unencumbered.

Rich:  Correct, that’s right. And I haven’t allowed for a lot of expenses,