Low income property investors?

Richard Feynman · 2nd May, 2013

Just curious, is anyone, or does anyone know others who have invested/continued to invest on a low income (lets say $45,000 or preferably less in today's dollars)?

Living at home or very cheaply would make a massive difference to this equation, obviously. The scenarios:

- Anyone managed to obtain finance and hold their first property?
- Anyone built a sizeable portfolio of property whilst remaining on a relatively low income the entire time?
- Lowest income anyone knows of someone who successfully obtained finance for an IP and made a purchase?

RPI · 2nd May, 2013

I was on $28k when I bought my first property in inner Brisbane, wife was on about $15k But it was $105,000 and I built up a dozen properties with nothing other than inflation related wage rises. But the properties were cash flow neutral and only negative due to paper deductions. Would have to look a bit further than 5k from Brisbane CBD to find that now.

Be interested to see people doing it now.

D

nhg · 2nd May, 2013

There is a guy I know of on another property forum who is on about $50k. Has about 9 properties and is in his mid-20’s.

Though I do believe he had a little help from his folks. The rest was purchasing just before a small boom which meant great equity to play with.

Blair007 · 2nd May, 2013

Richard Feynman said:
Just curious, is anyone, or does anyone know others who have invested/continued to invest on a low income (lets say $45,000 or preferably less in today's dollars)?

Living at home or very cheaply would make a massive difference to this equation, obviously. The scenarios:

- Anyone managed to obtain finance and hold their first property?
- Anyone built a sizeable portfolio of property whilst remaining on a relatively low income the entire time?
- Lowest income anyone knows of someone who successfully obtained finance for an IP and made a purchase?

Think its very possible, you would probably have to look at areas with lower median house prices that are more affordable. Theres lots of regional areas where you can get a foot in the door for around the 100k mark. plus many of these properties are neutral/cashflow positive.

The biggest difference between high income and low income earners is that the high income earners are able to reach goals faster but if you have the right mindset i think anything is achievable.

mikezen · 2nd May, 2013

Richard Feynman said:
Just curious, is anyone, or does anyone know others who have invested/continued to invest on a low income (lets say $45,000 or preferably less in today's dollars)?

Living at home or very cheaply would make a massive difference to this equation, obviously. The scenarios:

- Anyone managed to obtain finance and hold their first property?
- Anyone built a sizeable portfolio of property whilst remaining on a relatively low income the entire time?
- Lowest income anyone knows of someone who successfully obtained finance for an IP and made a purchase?

The key is to just get started, save a deposit, use a calculater, get educated then get a good broker, you will work out what you can do and what you need to do to get where u want to be and if you dont know u can ask here

I see your in sydney, prices are rising, try and buy low and do a reno this will help with your servicing.

If your priced out of the city, look further out but still contemplate a reno....

I live 3 hours out of brisbane and bought and renod there as it was the best option for cg and rental return, yes 3 hours is a long drive to paint walls and weed gardens, but its worth it to get started and that was the sacrifice i wanted to make.....

once you have one things will get clearer

good luck

Shahin_Afarin · 2nd May, 2013

This is going to sound crazy but I find most of my successful (by way of yield and CG return) property clients are lower income earners than higher income earners.

Brady · 2nd May, 2013

Off the top of my head I can think of a client of mine,

Bus Driver earning ~$50k P.A

Purchased and lived in lower end of the market, but continued to purchase

Portfolio would be all +ve cash flow and has 5 or 6 properties and built up ~$270k of equity in about 6 years.

mumbai · 2nd May, 2013

Where the low income earners hit a roadblock is securing more loans. I am at the junction at the moment

Brady · 2nd May, 2013

rajnhets said:
Where the low income earners hit a roadblock is securing more loans. I am at the junction at the moment

Depends on how they have purchased, how often and how much they borrowed.

Doesnt always happen.

mumbai · 2nd May, 2013

Brady said:
Depends on how they have purchased, how often and how much they borrowed.

Doesnt always happen.

Doesnt always, but more often than not.

Corey Batt · 2nd May, 2013

I have clients who earn 45k or less.

It's possible, you just need the right property to act as a springboard, as opposed to an anchor.

And at that income level, negative gearing really isn't your friend.

Shahin_Afarin · 2nd May, 2013

I find most investors hit the equity wall faster than the servicing wall.

Richard Feynman · 2nd May, 2013

Thanks for the input all. Just to clarify, I'm not on a low income, I'm just curious of accounts of people who are..

RPI, what year were you earning that salary? It's not much help knowing the income without the year.

nhg, that guys sounds like he's killing it! Must be living free or very cheap?

TheFinanceShop, perhaps this comes down to them really needing to squeeze the most out of their limited resources? Thoughts?

Brady, that too is really impressive. Equity gains almost matching his income per year.

rajnhets, are you comfortable sharing your numbers (income, IPs, total loan values, equity)?

CJay, curious if you can share more specific examples? No qualms if you're not willing/able though.

Jamie M · 2nd May, 2013

I've got a fair few clients who are single and on less than $50k a year who own multiple properties.

Living at home can help - not all of them do though.

Cheers

Jamie

mumbai · 2nd May, 2013

Richard Feynman said:
rajnhets, are you comfortable sharing your numbers (income, IPs, total loan values, equity)?

I had already shared in another thread. Here you go:
Single Income: 63K. Two dependents
PPOR: Loan $430,000 P&I at 5.47% (Bought at 480K. Current market price would be approx 550K)
LOC on PPOR: $30,400 IO at 5.47%
IP#1: Loan $360,236 IO at 4.99% (Bought at 400K. Current market price would be approx 440K)
Rent from IP: 405PW (gross)
Offset balance: 10K

Brady · 2nd May, 2013

Richard Feynman said:
Thanks for the input all. Just to clarify, I'm not on a low income, I'm just curious of accounts of people who are..

RPI, what year were you earning that salary? It's not much help knowing the income without the year.

nhg, that guys sounds like he's killing it! Must be living free or very cheap?

TheFinanceShop, perhaps this comes down to them really needing to squeeze the most out of their limited resources? Thoughts?

Brady, that too is really impressive. Equity gains almost matching his income per year.
rajnhets, are you comfortable sharing your numbers (income, IPs, total loan values, equity)?

CJay, curious if you can share more specific examples? No qualms if you're not willing/able though.

Agreed, funny thing was that he didn't really think he was doing that well because his properties were cheapies. But he kept buying because he could afford them easily.

But I quickly reminded him of how much equity he has made and how his extra cash flow he had created for himself.

So really he had a good cashflow stategy that benefited from some good capital growth.

ZachAnSel · 2nd May, 2013

I still remember read about property investor in WA, their work as cleaner and declare them self low income around $45k..

Their portfolio last time is about 10 IP already, value about $3,5M with loan about $2.6M

Let me find out where is the url for ya...

Brady · 2nd May, 2013

ZachAnSel said:
I still remember read about property investor in WA, their work as cleaner and declare them self low income around $45k..

Their portfolio last time is about 10 IP already, value about $3,5M with loan about $2.6M

Let me find out where is the url for ya...

Hrmm sounds possible.

10 x $350,000 @ $420p/w rent with $45k annual salary

That could service $2.6M

bbmick · 2nd May, 2013

Wife is on about 50K but paying low tax due to working in "not for profit" sector. I am semi retired (house-husband & doing reno's) and we are both now 50yo.

PPOR is paid off. We are up to 4 IP's after 7 years (cheapies) - pretty much cashflow neutral from day one. We will be looking for another one later in the year. Will find out about servicability then I guess.

Melb Metro (Outer)
IP1. - Purchased $ 170k Value $300k Current Rent $290 Loan $79k
IP2. - Purchased $ 151k Value $300k Current Rent $275 Loan $81k

Vic Regional
IP3. - Purchased $ 97k Value $150k Current Rent $205 Loan $115k
IP4. - Purchased $ 81k Value $150k Current Rent $215 Loan $115k

cimbom · 2nd May, 2013

I guess we're sort of low income by Canberra standards. We purchased our first IP last year although I sort of regret that now because we probably won't be able to buy a PPOR for another year (thought we'd be able to this year). We will have wasted 80k on rent by then

Low income property investors?

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Richard Feynman

RPI

nhg

Blair007

mikezen

Shahin_Afarin

Brady

mumbai

Brady

mumbai

Corey Batt

Shahin_Afarin

Richard Feynman

Jamie M

mumbai

Brady

ZachAnSel

Brady

bbmick

cimbom

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