how to make 20K pa passive income ?

Oops I meant excluding management and interest.

I would reach 100k very quickly if I also capitalised interest - plus it would not be deductible.

 

Interesting - I am actually working on a few app ideas - they just don't pay that much unless you have a really bid hit. Realistically I might get a couple of hundred to buy my $1 app. I am only developing it for my own interest.

 

$400k won't get you into a $2M property on commercial lease doc. You've assumed an 80% lend and ignored stamp duty and other purchase costs.

More realistically $400k will put you into a $1M property at 65% LVR. You'd also want some spare change to act as a buffer against some of the riskier elements of commercial property such as extended vacancies.

 

@Logan we'd be really interested to hear back from you as to what changes/strategies you implemented to help you with part/all of the $20k goal ?

 

What rent will 1m commercial property get someone pa? 70k and net like 60k?

I just don't see the attraction of commercial property in a weak economy. I would hate to be stuck and the repayments eat away my capital.

At least if it was houses you can sell 1 and get out of trouble easily

 

@JacM I am going for capitalising running costs at the moment. I am also getting closer and closer to a new business start up. The business would be secondary to my main payg job - I earn too much to pack it in yet and I still have many more loans to finance.

 

I see you're in Sydney. Why not let out 2 spare bedrooms @ $200 each a week? Cash.

 

And hope the ATO doesn't find out?

 

Of course. Just call it "house keeping" money. Never ever call it "rent". I did this for several years last decade with no problem. I was single and living in a 4 bed PPOR. Worked for me. Not the most sophisticated solution agreed, but it is A solution.

 

If your on a high income, but residential property, you make a loss yes, but with all the depreciation on about 5 properties you will clear 20 k positive cashflow. Iv done that and instead of paying tax I get it back as positive cashflow, about 25k now days

 

I'm over my housemate time ! And I have a young family. I also prefer to have a 'come and go room' or 'room of requirement' where my large extended family and friends come and stay.

I know I am shooting down a lot of these ideas but I figured the brains trust here was probably more financially imaginative than my current circle.