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Bryce Holdaway Blog post by Bryce Holdaway

How many properties are needed to create a Passive Income?

“TEN properties in FIVE years!” We often find this headline but in Property Investment, how many properties are enough? In this How to Session, Bryce Holdaway talks about how many properties you actually need to create a passive income in retirement.

Hi, Bryce Holdaway here, Partner at Empower Wealth and Co-host of Location, Location, Location Australia.

Today in this How To session, I want to talk to you about something I’m often asked, and that question is, How many properties do you actually need to retire on a passive income for life? Is it 10? Is it 20? Is it just a case of buying multiple properties forever and a day? Or is there actually a definite answer that can help you determine how many you need?

It was a really interesting question. So what I did was, I approached the Australian Taxation Office and I tried to find out how many people lodge tax returns with an investment property. I found some information — and I was really staggered by the outcome.

Of the very small percentage of the population who actually do buy an investment property, a very large percentage of them stop at one.

It was 73% of all property investors stop at one investment property!

What I’ve found over the years in this industry is that one’s not quite enough. It’s actually better than doing nothing because there’s some good taxation benefits — and if you hold it long enough, there are some significant gains to be had — but in order for you to create a passive income, which allows you to retire debt free, you are going to need more than one investment property. It’s a really important point that of those who actually do commit to an investment property, not very many actually buy multiple properties! I guess the idea of buying 10+ properties is something a lot of people desire; but in reality it’s not a number a lot of people achieve.

Now, what I did was I wrote an article on How to create an income for life — $2500 per week, passive income using a property portfolio. What was really interesting was I had to create a scenario for a late-20 single female, a mid-30s couple with two young kids, and a mid-40s couple with two older kids … and none of those three scenarios had actually invested in property before! What I hope you find to be really, really encouraging is the first scenario of the young female — Rachel, she was in a late 20s — needed to buy her principal place of residence (PPR) and 3 investment properties over her entire journey, before she reached the age of 60 to retire on a passive income of $2500 per week. This is about $130,000 dollars a year.

To put this in context right now: the average household income is around $62,000 — so it’s quite a significant income indeed. For her, it required a principal place of residence and 3 investment properties.

For the mid-30s couple it was exactly the same. They needed their principal place of residence and 3 investment properties. For the mid-40s couple they actually needed their principal place of residence and 5 investment properties.

Again, we’re not talking about 10+ properties. It can actually be done with as little as 5 investment properties, or in two of these scenarios, 3 investment properties.

So the important point here is this: if you focus on buying the right assets and you focus on getting the debt structure right, it’s really, really possible for you to retire on a passive income with as little as 3 investment properties.

Now, as I always say, there’s four things you need to consider when you’re building a property portfolio:

  • A: Asset selection
  • B: Borrowing power
  • C: Cash flow management
  • D: Defence

When you have a combination of these four factors together — like knowing what property to buy and getting the right debt structure right — chances are, you can earn yourself a very, very significant passive income through residential real estate.

If you want to find out a bit more detail on how you can do this (and see which one of the three scenarios you relate to the most), underneath this video there’s a link for you to click. You can get a copy of the article and have a read through. It’s about six pages, it goes into quite some detail, so you can see how the scenario works and how it actually might work for you.


So my How To session today was, “How many properties do you actually need to create a passive income?” Well, the answer is:

There’s no general rule of thumb, but the encouraging point is, quite often, it can be five or less.

Good luck with your property investing!


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