My FIRE numbers look a whole lot better if I can create an additional income stream of around 5-10k a year. I could work a little in an alternative low stress job (not that keen), or create that with one or two positively geared rentals.
Can't you just take the money you'd invest in a property and put it to work in another investment that yields better?
This is why people buy for capital gain instead of yield (in Sydney anyway).... example (using my actual numbers)
I purchased a 2 bed, 1 bath apartment at the end of July 2014. Standard 3 story walk up, nothing special at all about it.
Purchase price: $450,000
Stamp duty taxes, legal costs and fees: $18,055Total purchase price: $468,055
Funded by loans: $468,000
Funded by cash: $55 (hehehe)FY 2015 (July 2014 to June 2015)
Rent income FY15 (Sep14-Jun15): $16,374
Interest expense: ($17,151)
Other expenses: ($6,288)Cash loss: ($7,065)
Depn and Capital works deductions: ($5,521)
Net taxable loss ($12,586)Tax benefit: $4,909Net cash loss 2015: ($2,157)FY 2016 (July 2015 to June 2016)
Rent income FY16 (Jul15-Jun16): $20,559
Interest expense: ($22,272)
Other expenses: ($5,896)Cash loss: ($7,609)
Depn and Capital works deductions: ($4,573)
Net taxable loss ($12,183)Tax benefit: $4,751Net cash loss 2016: ($2,858)
Total cash losses over the 2 years: ($5,015)
Valuation at 30 June 2016: $575,000
Profit: (575-468-5) = $102,000
Return on equity: A Lot! ($55 remember :P)