3 Ways To Replace Your Income Through Property Investing In Less Than 10 Years

3 Ways To Replace Your Income Through Property Investing In Less Than 10 Years

What would you do this year if you didn’t have to work anymore?

In todays article I’m going to show you 3 simple ways to replace your income through property investing In less than 10 years.

Looking to buy an investment property in the next 12 months? Learn more about how we can help you here…

Building a large asset base is the key to replacing your income.

In FACT 95% of the successful investors I’ve spoken with in the last 5 years have used 1 of the 3 strategies below to replace their income:

1. Build a large asset base and live off the equity 2. Build a large asset base and live off the passive income 3. Build a large asset base then sell a number of properties and live off the passive income

1. Build a large asset base and live off the equity

Example: Average growth / Average cash flow – $50,000 lifestyle p.a.

  • You buy 3 properties worth $400,000 each over the next ten years.
  • Total asset base $1,200,000.
  • Each of these 3 properties is cash flow neutral (after tax) from day 1.
2015 – Property 1$400,000 2016 Property 2$400,000 2017 Property 3 $400,000
  • Lets say each of these 3 properties increase in value by 50% (5% per year) over the next 10 years.
  • Total asset base is now worth $1,800,000.
  • Total equity is now worth $600,000.
2025 Property 1 $600,000 2025 Property 2$600,000 2025 Property 3 $600,000

How do I live off this equity?

  • Based on these numbers you should be able to go back to your bank and borrow a small percentage (3%) of this equity to live on.
  • Each year you obtain a new equity loan from the bank to cover you for that year and as long as the value of your property continues to rise by 5% per year you can continue to fund your life tax-free.
  • If you use this strategy sensibly, and only borrow a small percentage (3%) of the increase in value each year (5%), your loan to value ratio will continue to reduce as your asset base continues to increase quicker than your draw down’s reduce it.

What is the result of following this strategy for 10 years?

Total value of property portfolio in 2025 $1,800,000New equity generated each year based on 5% annual growth $90,000Equity withdrawn each year 3% $54,000

2. Build a large asset base and live off the passive income

Example: Average growth / High cash flow – $100,000 lifestyle p.a.

  • You buy 5 properties worth $400,000 each over the next ten years.
  • Total asset base $2,000,000.
  • Each of these 5 properties are cash flow positive from day 1 and put $100 per week into your pocket (after holding costs and before tax).
2015   Property 1 $400,000 2016    Property 2 $400,000 2017    Property 3 $400,000 2017  Property4 $400,000 2018               Property 5 $400,000
  • Lets say each of these 5 properties increase in value by 30% (3% per year) over the next 10 years.
  • Total asset base is now worth $2,600,000.
  • Total equity is now worth $600,000.
  • Lets say in 10 years time that each of these 5 properties put $200 per week into your pocket (after holding costs and before tax) because the rent has increased by 20% (2% per year).
2025  Property 1 $520,000 2025  Property 2 $520,000 2025  Property 3       $520,000 2025     Property 4 $520,000 2025           Property 5 $520,000

How do I live off this passive income?

  • Based on these numbers you should be able to go back to your bank and borrow a small percentage (2%) of this equity to live on.
  • Furthermore you now have 5 properties putting $200 per week in your pocket.

What is the result of following this strategy for 10 years?

Total value of property portfolio in 2025 $2,600,000 New equity generated each year based on 3% annual growth $78,000Equity withdrawn each year at 2% $52,000Passive income generated each year based on 5 properties $52,000

3. Build a large asset base then sell a number of properties and live off the income

Example: High growth / Average cash flow – $110,000 lifestyle p.a.

  • You buy 5 properties worth $500,000 each over the next ten years.
  • Total asset base $2,500,000.
  • Each of these 5 properties is cash flow neutral (after tax) from day 1.
2015   Property 1 $500,000 2016    Property 2 $500,000 2017    Property 3 $500,000 2017  Property4 $500,000 2018               Property 5 $500,000
  • Lets say each of these 5 properties increase in value by 60% (6% per year) over the next 10 years.
  • Total asset base is now worth $4,160,000.
  • Total equity is now worth $1,660,000.
2025  Property 1 $800,000 2025  Property 2  $800,000 2025  Property 3       $800,000 2025     Property 4 $800,000 2025           Property 5 $800,000

How do I live off this equity?

  • You decide to sell two of the properties for $800,000 each and make $400,000 net profit (after repaying the loan, capital gains tax and exit costs).
  • You decide to use this $400,000 to pay your self $40,000 per year for the next 10 years.
  • On top of this you should be able to go back to your bank and borrow a small percentage (3%) of this equity to live on.
  • Each year you obtain a new equity loan from the bank to cover you for that year and as long as the value of your property continues to rise by 6% per year you can continue to fund your life tax-free.
  • If you use this strategy sensibly, and only borrow a small percentage (3%) of the increase in value each year (6%), your loan to value ratio will continue to reduce as your asset base continues to increase quicker than your draw down’s reduce it.

What is the result of following this strategy for 10 years?

Total value of property portfolio in 2025 (after selling 2 properties) $2,400,000New equity generated each year based on 6% annual growth $144,000Equity withdrawn each year 3% $72,000Additional payment to self each year for the next 10 years $40,000

You now have 3 different strategies you can use to replace your income through property investing in less than 10 years.

Let me know which strategy you personally prefer in the comments section below:

  1. Equity
  2. Passive income
  3. Buy & sell

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Ben Everingham

About

Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.