# Can you retire when owning 3 or 4 houses, and what if you still have to pay mortgage on some of them?

I did some calculations before, and found out if a person own 3 or 4 houses, townhouses, or condos, then the person can probably retire.

That's including living in one house, and getting rent from 2 or 3 houses, and paying the 1.2% property tax of all the houses each year.

So that means if a person sells a house in the San Francisco Bay Area, and is able to use \$1 million to buy 3 or 4 houses some where else, for \$250,000 a house or \$330,000 a house, then it is fine to retire.

However, what if after tax, there is less than \$1 million, but suppose if it is 80% or 60% left, will that be sufficient for the bank to lend you money to still buy 3 or 4 houses? That's considering there is only rental income and no other income.

If the loan amount has to be 20% - 40% of a million, the initial amount able to be spent each month as living expenses may be little, but hopefully, after a few years, and 10, 15 years later, when the prices of the house go up 50% or 70%, or even 100% or 200% such as near Seattle or in the Bay Area, with the rent also higher, it will get better.

Is that possible? If it is fit into the Bay Area scenario, if renting out 3 houses can generate \$4000 x 3 = \$12000, and if 25% is mortgage, that might be \$4000 a month, so \$12000 - \$4000 = \$8000 per month of income, and if the property tax is \$40,000 per year or \$3400 per month, the income of \$8000 - \$3400 = \$4600 would seem enough to live on. Does this seem correct?

• Have you incorporated risk into your "calculations"? What if a house goes unrented for 6 months? – D Stanley Jan 2 at 21:34
• I think the rough answer to your question is yes, you can retire on \$1 Million in assets - I'm not sure what else you're looking for. – D Stanley Jan 2 at 22:07
• The question is confusing me, because the first part seems to talk about owning houses outright, but then the second half talks about needing loans. Obviously if you own the houses outright the math is going to work a lot better than if you have to be making payments! – Michael Jan 2 at 22:56
• Even ignoring the ridiculously high rent, are you considering that property taxes are your only expense? What about insurance? Maintenance? Repairs? My experience is that if you are including the capital repayment part of the mortgage in the calculations, you're generally lucky to break even at the end of the year with no overall loss or profit. If you actually own the property, without any mortgage, the situation will be different. – Ray Butterworth Jan 3 at 1:11
• There are lots better ways to retire than owning rental property, IMHO. Sure, you can use \$1 million to leverage yourself into owning a number of houses, but either you pay a property manager to manage the houses (which takes a good share of your income), or you do the work yourself, which is hardly my idea of retirement. – jamesqf Jan 3 at 5:16