How Many Properties Do You Actually Need To Be Financially Free?

Published: July 22, 2019, 8 p.m.

b"https://www.youtube.com/watch?v=QIBa44ZHqco\\n\\n\\n\\n\\n\\n\\n\\n\\nA lot of people talk about 10 properties in 10 years but how many properties do you actually need to be financially free?\\n\\n\\n\\nResources Mentioned:\\n\\n\\n\\n0-130 Properties in 3.5 Years by Steve McKnight\\n\\n\\n\\nProperty Tools\\n\\n\\n\\n2 Properties To Financial Freedom\\n\\n\\n\\nRecommended Videos:\\n\\n\\n\\nHow To Own Multiple Properties\\n\\n\\n\\nTranscriptions:\\n\\n\\n\\na lot of people talk about 10 properties in 10 years or obviously they're Steve McKnight's famous book of 0 to 130 properties in three and a half years but how many properties do you actually need to be financially free do you need 10 do you need a hundred and thirty that's all we're going to talk about in today's episode hey i'm ryan from on-property helping you achieve financial freedom and really excited to get down to the nuts and bolts of this topic to help you assess how many properties you actually need to be financially free because there's a lot of different things that changes how many properties you're going to need your investment strategy what the rental yield of that property is going to be as well as what income level you want to achieve in order to consider yourself financially free I like to think of two different income levels when it comes to financial freedom baseline financial freedom and that's the financial freedom where look I can get by I can live a pretty good pretty happy life but I don't have those little extra luxuries in life I don't have a lot of extra money to travel overseas every single year etc so you got baseline financial freedom we can just live a normal everyday life don't get your coffee once a day twice a day three times a day four times who's judging alright no one's judging you yeah you can live kind of a normal life on that baseline financial freedom so there's a few ways that you can look at this and a few ways you can calculate how many properties you need to be financially free and they're going to explain why Steve McKnight needed 130 properties and why you might only need two properties so 132 - they're obviously very different so let's get into it I think one of the best ways to understand okay how many properties do I need as a baseline to start with is to actually estimate owning properties without a mortgage so let's pretend you're investing today you're purchasing properties you're going to go principal and interest hopefully they're positive cash flow but over time you're going to pay those properties off and eventually you'll own those properties outright so how many properties would you need to know own outright in order to be financially free now depending on how much you want to be earning and depending on the rental yield other properties is going to depend on how many properties you need so let me get my phone out and do some calculations here so let's say we're gonna need a hundred thousand dollars in passive income in today's money now when we're looking at the rental income of a property they're still going to be some expenses in there okay we've got insurances council rates property manager fees etc so generally you'd want to calculate about twenty to thirty percent of that income for those expenses so a hundred thousand dollars let's say we're calculating twenty percent that's actually only eighty percent of the total rental income that we need so we need a bit more than that so that when we take out our twenty percent we're left with a hundred thousand that we can live off so to do that calculation we do a hundred thousand divided by eighty that gives us the total value of one percent and then times by 100 so that means we need one hundred and twenty five thousand dollars per year in rental income in order to achieve that hundred thousand dollars a year now let's go ahead and divide that by 52 because there's 52 weeks in a year that's going to give us a total amount of two thousand four hundred and three dollars and 85 cents so let's call that let's just call it two thousand four hu..."