150k Passive Income ....what it takes..

You only need 1.5m to get 150k income. $1.5m of commercial property netting 8% will give you 120k, LVR@60% will give you another $900k to play with, for $30,000 after tax deduction. so a return of 6% on your borrowings will bring your income up to 150k, with out realizing any of the 200k (8%) in capital gains.

 

I earn $45 k net so id be happy if could retire on about the same amount.

In today's dollars

If I retired aged 65, I'd get
Approx $20k net per annum from super to see me through till I was 90 yrs old ($230k)

I'm aiming for
At least $30k net per annum from property

Having fully paid off my ppor too.

I'm planning for my super to make up 1/4 of my retirement, and 3/4 of my income to come from property. Perhaps 10 % in shares too.

I'll have to do the calculations but I'm thinking if I end up with about 4 fully paid off ip's this will be enough. I'd need to end up with 6 or 7 at the end and sell a few to pay down those 4. When I'm aged 70 or 75 when my parents have passed away I'll also get 1/3 of my parents $750k house in today's dollars, so I'd assume those profits would be used to pay down 2 of my earliest purchases. In 30 years time. (I'm 45 yrs old) it'd be worth at least 1.5 to 2 mil I'm thinking

I'd like to go see a financial planner to do some hypotheticals.

How does all this sound?? Am I in the right track, thinking straight.

 

They and myself are better off working part time for a while after retiring because if you happen to get sick or injured when you get older you'd be screwed. Might as well keep earning a bit of an income to supplement your retirement whilst your still young and healthy. 70 is the new 60. Build up the nest egg some more.

Women in my family live to age 100 so I might continue to work maybe 20 hours PW in my 70's. Also I don't mind working. I could even look at working in a field I like/have a talent in too. That's an option. So then it doesn't feel like work, more a hobby.

 

But where do you get 8% yields CIP at $1.5m in Oz in current market?

 

That is assuming you have this income continously with no hicups.....I would want to diversify that income source.

 

hahah i was about to ask that too.. i am ready to pounce if it is real.. i have seen 8%.. just not at $1.5m price point. 2 - 3 years ago 7% gross was quite easy to find.

 

You only have to look in Newspapper property section. You can get it in Mildura, Echuca, Ballarat, Redcliffs. Pounce on this then Kin if it is not too late. Sun City Caravan & Leisure Life Park. 30-40 Cureton Avenue Mildura. Prime Real estate Contact Naomi Darby 0428 236 480. $1,495,000, Caravan Park Securely leased @ $66,0000+ gst+outgoings p/a + options for 4x3 year lease. Life style village, 10 units x 100 a week =$52k p/a + approval for 62 more. 66k+ 52k= $118k + there is another potential 100k p/a.

 

Here is another, 38 Indi Avenue Red Cliffs CBA bank, $290k, 23,600 p/a plus outgoings + gst. If you LOC $900k from the park use 300k for this you have 150k income, 600k spare and 100k p/a CG. Contact Ash Spencer 0408 593 586. Collie& Tierney.

 

You would need to capitalize the interest of about 15k ,for 150k income but who cares you only a 1% CG to cover that, less after Tax

 

OK regional.
Also these will be active business, not rent and forget.
Not something that would interest me, way too much for work these returns

 

You don't know where you will get what yield you until you put in an offer and have it accepted. If you want to buy and mostly forget. Make an offer on this Auto Pro 192-196 Broomely Road Robinvale . With 28 year lease, $78,000 p/a, 7x7x7X7+ option with annual CPI, might just get it for less than 900k. Couldn't get a better tenant backed by Bapcor one of the best performing companies on the ASX. in a town that in early boom and with diverse industries. There is also 0 vacancies for RIP and crowded housing.

 

Agent is Ryan Tierney 0400 503 052.

 

But who or why would anyone buy this??? It has a 3.57% net yield


Asking price over $2M??? Might get it for 900K?? Is this a joke

 

How are you getting 10.4%..is that based upon the fact that you invested the equivalent of $1.15m years ago and dividend/returns have grown since. What can you invest in (safely) that readily nets an average of 10.4% in dividends?

 

ya i guess so.. but techincially thats the wrong calculation.. if your investment is current worth 3m and the yield ($) figure hasn't change that means your yield % has gone down..

in VC terms your money could earn u more % in other asset. if you know where to look

 

Adding some high quality property syndicates (i.e. Centuria, Charter Hall), some direct commercial and some high income equity strategies (i.e. Plato) after the asset base has grown can also help.

 

Am interested to know what investments that are SAFE, dependable, passive and high yielding ie > 5-6% NET that one could invest in to get $150K passive.

Direct shares wouldn't meet that criteria for me. Most, if not all of the long standing LIC's (AFI, ARG MLT etc) only yield 4%.

When one throws in the towel and 'retires', the implication is that you'll never be dragged back into business or the workforce..so the funds invested have to give you SANF and predictably achieve the intended outcome year in year out no matter what.

I see one poster suggesting they can reliably get circa 10% year on year. Not sure what exactly can hit those heights that meets the aforementioned criteria ie safe, dependable/reliable and for the most part, passive (buy and hold forever Warren Buffett style).

 

It wont happen in Oz in current lending environment and markets softening

I am averaging 15% net yields today 200k income pa

Most are not prepared to step outside their comfort zone.
US property market can do this but you need cash, and volume

 

It’s likey these quoted managed funds returns include realised cap gains which are paid out as distributions.

The only way way it’s sustainable is if returns are regularly this level plus 2% or so higher for inflation, to make it a ‘spendable’ return.

Seems rather optimistic and unlikely in my view to be maintained over a lengthy period.

 

Don’t forget franking credits for those LICs which are real cash.

4% yield is actually 5.7% after franking.

Cashflow returns are comfortably 5-6% and tend to grow faster than inflation and rents over the long term.