HOW TO ACHIEVE $2,000 PER WEEK IN PASSIVE INCOME
The main topic discussed in relation to property is retiring early and quitting the 9-5 life with 2k per week flowing into your bank account from their portfolio.
It seems to be everyones goal. To achieve this its not actually the amount of properties you aquire its the value of your asset base.
If your portfolio is 2 properties worth million each and it returns 5% net yield than you will have your 2k per week in passive income. Likewise with 4 properties worth 500k each, returning 5% rental yield.
The value of your portfolio needed to get to this amount of passive income all depends on the rental yield it is producing.
If your yield across your portfolio is 7% than you will only need a 1.5mill valued portfolio unencumbered.
If your rental yield is 10% then your portfolio value will only need to be 1mill unencumbered.
Now if properties double every 10 years than you would only need to build up a asset base worth $750,000 with a 6% rental yield because in 10 years this portfolio would be worth 1.5 mill, returning a 10% rental yield.
So its clearly evident that you don't need the "10 properties in 10 years" to achieve your $2,000 per week in passive income. All you really only need 3 or 4 properties in good growing areas with adequate rental yields as well as the appropriate amount of time in the market.
Ways to reach this goal quicker would be to purchase more than the needed value of your portfolio and sell down the least performing asset to pay down the rest of the debt on the portfolio.
Granny flats are also a brilliant way to increase the rental yield on your property, allowing you to pay down debt at an increased rate. Although you need to research whether granny flats are under demand in your selected area as granny flats can sometimes be a ball and chain on your properties growth and type of tenants.
Happy investing everyone !
Written by Tom King
Director of Bez property buyers
