If you are relying on using income for investment properties as a retirement plan then it may not be in your best interest to acquire as many assets as you can possibly afford. Times have changed: property taxes are higher and renters are more unreliable. This then begs the question: “How many properties do I have to own to allow me to retire and live comfortably?”

One of the main factors that influences the answer to ‘how many properties do I need to retire’? question is how much money you think you will need to retire comfortably and what type of cash flow must be available to you each month as the result of the collective value of those properties. It is about setting a goal that is in alignment with interest rates and other economic factors. Retirement planning experts say that it is one thing to intend to depend on income from an investment portfolio and yet another to strategize carefully how financial independence can be achieved by running your portfolio investment properties like a business.

When it comes to figuring out how many properties you need to buy to retire more is not always the answer. Sometimes having too many properties can prevent you from living off your portfolio because so much of your expense and effort is going to go to property management. Some investors might be much better off if they can sell some of the properties and then pay the debt down on existing few properties. This means that any rental or business income you are receiving from the property goes to you.

Let’s just say that you own six properties. Owning two of your most profitable properties and selling off the rest might be a good idea because you can use the money from selling the other buildings to lower your loan repayments and upkeep your existing properties in a way that allows you to charge higher rents.

Financial experts advise investors to look more at living off equity rather than straight rental income and leverage out their loan-to-value property. You want to get rid of properties that are the vampire on your cash flow or too high maintenance as well.

Working out how you can make your investment properties work for you is usually simply setting a goal that is a figure that tells you how much you will need to live, say in 10 to 20 years’ time, and adjust your property ownership so that the income you receive compounds rather than being spent on maintenance or administration. It is much better to work with a portfolio that has a lower value but the potential to create equity as well as rental income for you.

Make the most of your money and make it start working for you! At JDL Strategies we show you how. Do yourself a favour and come along to our free, two-hour event in a city near you, or get along to our Fast Track half-day seminar and change the way you look at and manage your finances, forever.