Article by “Australia’s Queen of Cashflow” Helen Tarrant.
Do you want to boost – or even replace – your income with passive income from real estate?
Well, here’s a couple of case studies of 2 of my students who have successfully invested in commercial property for healthy passive cashflow.
I share them with you to give you an idea of the different types of approaches you can take to passive income through commercial property.
First let’s talk about a ‘bigger size’ deal then we’ll talk about ‘big cashflow’ from a ‘small property’.
Around $60,000 Net Passive Income from 1 Property Deal
My student from Melbourne, Ahmed is a Doctor who owns some medical practices.
His goal was to diversify his income, and he wanted do that by owning ‘set and forget’ commercial properties.
And, with my help he took advantage of the “multi-income’ strategy.
He bought this property – a small shopping strip – with five tenants for a little over a million dollars.
One main advantage of this property was that it had a vacant 2-bedroom unit upstairs.
This gave him space to create another office.
Ahmed also qualified for an 80% LVR loan and he had an additional potential upside of $15,000.
This is because he could convert the residential unit upstairs into an office, which he could rent for around $300-$400 a week.
This deal alone gave Ahmed a net passive income of around $60,000 a year – and so he was eager to ‘rinse and repeat’ this strategy.
As you can see, you can get a healthy income fast, when you find the right property deal.
Melbourne Teacher gets Healthy Cashflow from a Small Deal
Then there’s Adrian.
Adrian’s a great guy.
He teaches kids with disabilities, and he’s passionate about helping them to live the best life possible.
He’s got a goal to replace his current salary with passive income from real estate.
And, through working together with me, he’s made a great first step.
He bought this humble little office in Melbourne CBD for $170,000.
He bought it with a 3-year lease, with a 3% increase in rent each year.
The rent is $14,963 per year – with the tenant paying for the outgoings.
And, because he paid for it outright, that $14,963 is pure passive income for him – giving him a healthy yield of around 8.8%.
Right in the heart of a major capital city.
Adrian’s example shows that you don’t need a huge outlay to get started in commercial property.
His story proves that the only important thing is to get started, no matter how small your investment may seem.
Tips for Successfully Investing in Commercial Property
Now that you’ve seen a sample of my students’ success stories, I’d like to share some useful tips on how you can do the same:
- High yields and long leases – Make sure to negotiate a lease for your commercial property of at least 3 years – and gives you a yield of at least 7+, so it’s truly positive cashflow.
- Find properties that have tenants – A property that already has tenants allows you to generate an instant income. Plus, you’ll benefit from a tenant that’s already invested thousands of dollars into the property. This means they’ll want to stay for as long as possible.
- Find ways to increase rent – There will probably be opportunities for you to increase rent. Take these opportunities, however small the increase may be.
- You don’t need a huge amount of money to start – What’s important is to keep investing and expanding your portfolio.
If you’re interested in learning more about investing in commercial property, I’m here to help you.
To discover more about investing in commercial property, register for my free webinar today.
P.S You could potentially be 3 months away from a heathy passive income of up to $485 per week, if you buy the right deal. Find out more here.