Brett's 7-10 x 7-10 strategy
Brett Alegre-WoodChairman, YPC Group
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 the odds are good that they will increase well during 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.
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
Reader comments for the article 'Brett's 7-10 x 7-10 strategy'
You're invited to join in the discussion of this article. Do you have advice to share? An opinion or some feedback that adds to the discussion? Feel free to add it below!
Please leave a comment -- we'd love to hear your point of view. Please note though that ALL comments are checked before they're posted.
What every property investor must consider for the next two years
Could your interest rate go to 14% within 2 years?
Careful you aren't talking yourself into a double dip...
How to prepare for tomorrow's property market without affecting your lifestyle today...
What's next for the UK property market? A drop? or rebound? You decide...
Watch the moment Brett Alegre-Wood wins the People's Book Prize award...