Property advice: How many houses you need to own to comfortably retire

Dec 2021Karen Millers

It’s a question asked by almost every real estate investor and would-be landlord: what number of properties produces a wealthy retirement?

The answer is not as simple as two, three, four or more, investment specialists say, because every person, property and retirement wish is different.

However, there are ways to work out what will deliver the property wealth you’ll need.

“It all depends on what ‘retiring comfortably’ means to you,” says Property Investment Professionals of Australia chairman Peter Koulizos.

He says selling a single freehold property at retirement and pumping the money into superannuation can potentially deliver the $640,000 nest egg that the super industry calculates a couple needs to be comfortable.

But investors often set their income sights higher than the $63,000 a year that strategy can deliver.


Koulizos says people shouldn’t expect to live off one property’s rent because a big chunk of the income goes back into repairs, maintenance and property management fees.

“To earn $100,000 of rental income you need the equivalent of about $2.5 million in property freehold,” Koulizos says.

“Your kids will love you because you will leave a number of properties when you pass away – but it takes a lot of work to get that equity,” he says.

Author and CEO of The Property Mentors, Luke Harris, suggests a scarier figure to earn $100,000 of income

“Using a total return of 3 per cent per annum net, your asset base would need to be at least $3.33 million excluding your own home.”

“If we use an arbitrary average property price of $650,000 your portfolio would need to hold between five and six unencumbered average properties,” he says.


Harris says before working out how many properties will be necessary, you should answer questions including:

• What are your current assets, income, tax and debt?

• What income do you want in retirement?

• How many years before you retire?

• What level of debt will you be comfortable with?

Many people want to retire debt-free, but being wealthy is all about net assets. Having some debt is fine if you’re asset rich. Use a compound interest calculator to project how your property wealth will rise, based on a conservative 7 per cent growth rate.

Benson Muirhead, 21, saves 50 per cent of his income, plans to own several investment properties, and bought his first one this year.

“This property is positively geared, meaning the rent more than covers my repayments and outgoings – I am already saving for my second rental property,” he says.

“I plan to invest in more homes to live a life free of financial pressure, and retire early.”

Muirhead has great role models, his parents Prue and Andy who run a property management business.


Prue Muirhead says she received some wise investment advice earlier in her life.

“One single book changed my life about 15 years ago – it was about buying one house a year for 10 years and holding those 10 properties until retirement”.

Then perhaps four could be sold to pay off the remaining six, she says.

“We now own 16 positively geared rental properties.”

Consider favourable tax structures such as self-managed super funds. They can eliminate capital gains tax, but there are limits and rules.

Koulizos says his top tips for investors are to start early, buy in a good location with strong capital growth potential, pay it off and be patient.

He says most people are wage earners and will also have superannuation at retirement.

“For me, super will pay for the necessities and property will pay for the niceties.”


• One property – sell it at retirement and put the money into super.

• Two properties – if they are debt-free and high-value, the rent may be enough to live on.

• Three or four properties – one could be sold to repay the others’ debts. Holding at least one within self-managed super would help

• Five or more properties – You’re set for a wealthy retirement, especially after the next housing boom.


Anthony Keane, The Daily Telegraph, 13 December 2021


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