arebelspy
Full time employment: Posting here.
- Joined
- Apr 26, 2011
- Messages
- 625
Assuming you have sufficient cash flow, are there any major problems with having a very small net worth when retiring?
So let me make a hypothetical case. Let's say you own 15 properties that cashflow you 50k/yr. Naturally this is under the assumption that said cashflow takes into account mortgage, taxes, insurance (enough so if you are sued, etc you are covered, umbrella or what have you), maintenance/repairs, vacancy, legal fees, etc., so you are keeping 50k/yr.
You live on 40-45k/yr.
Properties are 100% financed (or have dropped sufficiently in value that you have no equity or are underwater on them, wiping out any down payments). You have no other portfolio. Thus $0, or negative, net worth.
You should be able to retire, yes?
This is less a question on real estate in particular, and more on retiring without a huge net worth, but just on cashflow. A huge net worth should be unnecessary as long as your cashflow is sufficient (and grows with inflation).
And yes, I've read every post in every thread in the real estate FAQ: http://www.early-retirement.org/forums/f47/faq-archive-landlording-real-estate-investment-43700.html and done several searches and read more threads on here. But every thread is on supplementing one's retirement or income with real estate, not specifically on retiring solely on cashflow.
I guess to put it in an easier way to understand.. if you had a pension that adjusts to inflation, and you were broke, but said pension brought in more than you spend per year, you should be able to retire? Seems sorta obvious when I put it that way...
Any links you can point to from past discussion, or any thoughts you have are appreciated.
So let me make a hypothetical case. Let's say you own 15 properties that cashflow you 50k/yr. Naturally this is under the assumption that said cashflow takes into account mortgage, taxes, insurance (enough so if you are sued, etc you are covered, umbrella or what have you), maintenance/repairs, vacancy, legal fees, etc., so you are keeping 50k/yr.
You live on 40-45k/yr.
Properties are 100% financed (or have dropped sufficiently in value that you have no equity or are underwater on them, wiping out any down payments). You have no other portfolio. Thus $0, or negative, net worth.
You should be able to retire, yes?
This is less a question on real estate in particular, and more on retiring without a huge net worth, but just on cashflow. A huge net worth should be unnecessary as long as your cashflow is sufficient (and grows with inflation).
And yes, I've read every post in every thread in the real estate FAQ: http://www.early-retirement.org/forums/f47/faq-archive-landlording-real-estate-investment-43700.html and done several searches and read more threads on here. But every thread is on supplementing one's retirement or income with real estate, not specifically on retiring solely on cashflow.
I guess to put it in an easier way to understand.. if you had a pension that adjusts to inflation, and you were broke, but said pension brought in more than you spend per year, you should be able to retire? Seems sorta obvious when I put it that way...
Any links you can point to from past discussion, or any thoughts you have are appreciated.