Your Investment Property forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Passive income properties

Notify me of new replies via email
Hoss | 23 Jul 2015, 09:49 PM Agree 0
I've just finished a the Steve McKnight book 0-130 properties in 3.5 years. He goes by his 11 second rule, weekly rent divided by 2 multiply by 1000 should be the max buying price! I've been doing a lot of research around my area and can't even get close to this target. Is there any such thing as a passive income property any more or am I doing well to find a property that the rent covers the repayments? I don't have a huge income but my house is valued at $250,000-$270,000 and I owe $80,00. I've thought a lot over the last 5 years of getting into property investing but have only started looking into it fully. I've found in my area the rental yield is around 6.5% and am wondering if a house in this range is reasonable or not? My goal I guess is to build a portfolio of properties but am concerned that I'll only afford one that I'll have to sit on long term to find small gains?
  • jaz | 25 Jul 2015, 04:53 PM Agree 0
    hi mate i think he is right. i bought few properties without knowing the rule and they work out to be similar figures as the book said can be done .you need proper research and not getting emotional with the properties and the suburbs etc etc.
  • Spencer | 27 Jul 2015, 08:20 PM Agree 0
    Funny, I finished that same book a day or so ago. I think theyre around but im wondering what a good return is annually for a positive geared property. Ive found a place which would bring in around 5000 annually after taking into account rent management fees, repairs etc. Based on that return and bearing in mind the deposit would be 35k, itd take 7 years to get the investment back. The other consideration is that there are concerns over the possible capital gains. I cant figure whether its worth it basically, even if value doesnt go up is it still worth it if after 7 years im still picking up 5k. I understand 5k isnt much and would need to continue to buy alot more to be able to give up work. Are capital gains everything?
  • Wandarri | 28 Jul 2015, 03:52 PM Agree 0
    Another equiv type of author has quoted 1.4 for metro and 1.6 for country - I think this is a bit of a stretch at 2.
Post a reply