If you like this Australian Property Podcast episode, Pete Wargent of Allen Wargent Property Buyers answers a few of your listener questions on property cashflow, how to generate passive income from property, and whether it’s too late to start your own property portfolio.
Topics covered today:
- 1 – Tom
- Passive income through property
- -Resi yields, for growth
- -Create equity
- -Short term resi
- -Commercial – industrial
- -may not be totally passive
- Net yields of 6% to 7%
- $1.5m property may generate up to $100k net income after costs
- 2 – Jiminy
- How do I work out property cashflow and what is acceptable cashflow?
- Yield – 4%?
- Mortgage interest rate – 6%?
- Depends how much you borrow, and if there’s LMI
- Other costs – strata fees (unit/townhouse) insurance, rates, repairs, PM, other contingencies
- Depreciation
- After tax result – negative gearing
- What’s an acceptable yield? Well – it depends on your situation.
- Rents and costs generally rise over time
- Interest rates will be up and down through the cycle, stress test
- 3 – AJ
- I’m 42 and own my own home – is it too late to build a property portfolio? Or should I look at shares and super only?
- 10-year investments
- Cycles 7-8 years, phases of the property cycle
- How long to build equity?
- Super – tax effective
- When are you planning to retire? Around 60?
- Other plans e.g. PPOR upgrade?
- Career, own business etc.
- Plenty of time if you have over a decade
