I am probably at the point I could be financially independent, if I totally tighten the belt, but I wanted to run something past everyone.
My retirement strategy is income replacement, rather than capital appreciation. When I have enough rental properties to replace my income(or at least enough of it), I will quit. So conceptually, is there anything wrong with having enough income producing property to provide income rather than having a huge nest egg(ie 401k/brokerage account) which is the traditional route(or a mix of both)? Let's say for instance I have 5 properties that produce $1000/month of rental income. Forgetting that I might have vacancies for this question how does my $500k in paid off property differ from the $1.5M portfolio withdrawing the mythical 4%(60k/year is 5k/month and 60k/.04 = $1.5M )?
Thanks
Brian
Other irrelevant info:
I'm 44.
Have ~$50k in 401k from an old job so even at average/poor performance it should double at least twice by the time i'm 65.
I make about $85k/year. My wife is older than I am and is drawing 1700/mo in disability after withholding.
We are both experienced landlords. She's owned over 20 properties and I've owned 4 with 50 years combined landlord experience.
Paid off house worth approx $210k(bought foreclosure @$164k).
1 current rental worth approx $120k bringing in $1200/mo.
$160k in cash about to make 2 purchases of approx $65k each of foreclosed properties. Might cost $30k to renovate both. I can probably cash flow the closing costs and any small amounts I'm off over the next few months. These properties are in an area where rents will for for 1000-1400/mo.