Brett’s 7-10 x 7-10 strategy

Brett’s 7-10 x 7-10 strategy

Posted on March 14, 2005 in 3plus1, Educational blog, Emotions, Property, Strategy

Brett Alegre-Wood

This perhaps the simplest of all strategies. Quite simply it is:

Buy 7-10 properties and keep them for 7-10 years and you will have secured your retirement.

It doesn’t mean you’ll have a greatly enhanced lifestyle but you will have provided for basic needs during retirement.

Let’s take a look at why:

  • Year 0 – You start owning 10 properties each worth £100,000. So you have £1,000,000 in property. Each of the properties has an 85% mortgage and a cashflow of £400 per month.
  • Year 10 – Now consider this portfolio had doubled to £2,000,000, you have continued to pay interest only on the mortgages so you still owe £850,000.
  • By this time the rent should have doubled. In truth we don’t know what rents will do but they will certainly been larger over 7-10 years.

The important thing is can it provide for your retirement. To create a £50,000 income you would need to ensure at least a 7% return each year. Assuming 2% inflation rate. For property to double every 10 years it requires a 9% increase at least.

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So in short, yes – you can retire on that. But the reality is that you wouldn’t just buy 7-10 properties and stop. You would re-mortgage constantly and buy more.

The sky is the limit!

Live with passion,

Brett Wood

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