How To Quit Your Job And Live Off Your Real Estate Earnings

by | Dec 3, 2021 | General, Property Investment Education

It’s the ultimate dream right – building a real estate empire and then living a life of luxury off it. But what do we actually have to do in order to make enough money from property to make this wish come true? And more to the point, is it even possible in this day and age to actually quit your job and live off your real estate earnings or are those days dead and gone…

Many investors assume that they’re going to create their future passive income from surplus rent. Essentially, this is a cash flow equation. Purchase properties, pay off your mortgages and live off the additional cash flow – tada – simple as that right? 

Well not always…


See for those who get into the property game early enough, it could easily be that straight-forward. But what about someone who doesn’t have a 30 plus year stretch ahead of them to pay off enough debt? 

I should mention that this conversation also comes down to your income expectations which will vary significantly from person to person. For argument’s sake, let’s say that the magic number you want to retire on is $100K per year – how many free-hold properties do you need to generate that annual income from rent alone? We can’t possibly predict the market but for this scenario let’s say each property was producing $18,000 a year surplus cash flow – you’d still need at least five or six rental properties to reach your ultimate outcome. 

Again, for some people this might be fairly straight forward. But for others they may not have the time, equity or serviceability to pull this off. 


Luckily when it comes to real estate, there’s more than one way to skin a cat. 

Here’s the thing – cashflow is king to keep us solvent, but it is actually capital growth that creates wealth. 

Here’s an example from a client we’ve been working with. 

Bob and his wife recently retired a couple of years ago. 

At the time, Bob’s wife who is a little younger than him was planning to work for a few more years. They sold their family home in order to down-size which left them with $800,000 – a fair chunk of change. 

With the additional funds they were planning to pay off the mortgages on their rental properties with the theory that it would create on-going cash-flow, which upon calculation resulted in an annual income of $32,000 a year. 

So, with $800,000 paid down, they get $32,000 back each year.

Now I’m sure you’ll agree, with all things COVID aside, $32,000 isn’t going to fly you around the world right…it gives you a bit of a boost, but you certainly don’t feel wealthy. Hence why Bob’s wife felt she would still need to work. On top of that they were establishing how they’d ration out Bob’s Super to make the budget balance. 

Really? Surely there’s a better way than scrimping and saving like this after you’ve worked your entire life to enjoy the fruits of your labour. 


I asked them what’s the worst that could happen if they didn’t pay off that $800,000 of debt? Say, the rental properties ticked along with their rents covering the bulk of the expenses and they used their $800,000 as money to live off? 

That money could potentially give them $150,000 a year to live off for at least six years! Or eight years at $100,000 if that’s what they choose to do. Naturally some years you’ll spend more and others much less but it’s tax-free money that’s yours to do with what you please. 

And when that runs out? Then you’ve got your investment properties to fall back on. At that point you could sell one of those and create another $600,000 worth of cash. And so on and so forth. 

With the right forecasting and expert financial planning, we worked out that we could get this couple through until the age of 92. But even if they did live beyond that it’s unlikely in the years leading up to that milestone that they will have spent $150,000 a year, so buffers and things like that were accounted for across our scenario planning. 


Cashflow is great to assist you in your acquisition phase but real estate is just a vehicle to help you generate wealth to live off. To make this work effectively, capital growth has a massive role to play. 

That’s why having a robust investment strategy that accounts for all the primary capital growth factors is absolutely essential when mapping out your long-term plans. 

There are many different ways to achieve wealth from real estate and with endless opportunities surrounding us, now is not the time to do nothing. 

If you want to invest in property but are scared of making a costly mistake, don’t go in blind. Come to one of our free property investing seminars.


Here you’ll learn how to take advantage of the current market landscape, as well as the chance to have one of our property experts assess your exact situation and establish a property growth plan that’s right for you. 


Register Now For The Free Property Investor Webinar. 


By Sue Irons

CEO – Positive Real Estate New Zealand