Property Investment

3 min read

Private property issue #66 - Real life case studies

You're about to hear the stories of two investors who’ve used the Golden Goose and the Nest Egg strategies. They can have a comfortable retirement by investing in property.


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There are 2 strategies investors can use to retire on real estate: ‘Golden Goose’ and ‘Nest Egg’.

You're about to hear the stories of two investors who’ve used these strategies. They can have a comfortable retirement by investing in property.

(The longer version of this newsletter will feature in an upcoming Sunday Star Times).

Here is a quick recap –

Case studies

Now, let me tell you two stories to see how these work.

(These are real stories from real investors. Only the names have changed for privacy).

“Single Mum Retires on $79k a year” – Golden Goose

I first met Tanya when setting up Opes back in 2013. She already had two investment properties that she'd owned for a decade each.

She was 57 at the time.

She wanted to use property to build a passive income. In other words, she wanted to grow a property portfolio so she could live off the rent.

That would mean she could look after herself in retirement. She wouldn't need to rely on her kids or the government superannuation.

We figured out that if she bought 2 more properties, she could retire at 65 with a half-decent passive income.

So she bought two more properties (four in total) and held on to them as they went up in value.

2 years ago, Tanya cashed up her 4 properties and bought 2 high-yield apartments.

Because she'd sold her other properties, these apartments don't have a mortgage.

Together, these rental properties earn her $79,000 a year. That’s after paying all her costs, like rates, maintenance and insurance.

Without getting out of bed in the morning, Tanya can spend $1,500 a week (pre-tax).

And that's before factoring in her NZ Superannuation.

This will continue for the rest of her life, whether she lives to 82, 92 or 102.

You can read more about the Golden Goose strategy here.

But there is another strategy you can use.

“Wellington couple set for life” – Nest Egg

Bruce and Carol took a different approach to Tanya and used the Nest Egg strategy.

I met them long before starting Opes, back when I was a mortgage broker. Bruce was almost 49, and Carol was 46.

They hadn’t invested in property before but had paid off a good chunk of the mortgage on their family home.

We worked out that if they invested in 3 properties over the next 7 years, they could spend $57,000 a year in retirement.

They'd use this to top-up their superannuation.

By the time Bruce hit 65 (16 years later), the value of their properties had gone up a lot. And they've also paid off a bit of debt.

They've just sold one of their investment properties using the Nest Egg strategy.

They cashed out. So they got a big lump of cash in their bank account.

They've kept the $57,000 they want to spend for the year in their account and have invested the rest in a term deposit.

At the end of the year, the term deposits will come up for renewal. That's when they’ll take another $57k out to spend. Bruce and Carol will then reinvest the money and repeat the process.

Bruce and Carol have easy access to money when they need it and don't have to think about tenants paying their rent. The money is already there in cash.

When they run out of cash, they’ll sell another property and live off the money.

The downside of the Nest Egg strategy is they're living off the principal of their investment. Not just the "interest" or rent. So the money will run out at some point.

You can read more about the Nest Egg strategy here.

How many investment properties do I need to retire?

When I started buying properties at 19, everyone told me I needed 10 rentals.

That was the magic number to live a comfortable life.

It's not true. And it doesn't work today. It's tough to build a portfolio that big.

From working with hundreds of Kiwi couples, I've found that 3 or 4 properties are usually the sweet spot.

The key is to figure out how many you need. And that depends on how big your Wealth Gap is.

Using My Wealth Plan, you can see if you're on track for a comfortable retirement. This is a piece of software we've built so you can see what your retirement will be like.

You can use this for free. Click here to use My Wealth Plan.

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Andrew Nicol

Managing Director, 20+ Years' Experience Investing In Property, Author & Host

Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.

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