According to leading financial educator and property millionaire Jamie McIntyre, simple strategies such as adding a 2 bedroom, 2 bathroom flat are quietly making investors solid returns.
He said, “often the key to wealth is simple, yet out of the box strategies that add value to an existing asset with low risk. As property is by far the superior asset class for most investors, this strategy combined with new technology that’s disrupting the property industry can generate passive cash flow rapidly.
“With property markets getting frothy in cities like Sydney, it’s good to be prudent and focus on cash flows because capital growth may not always occur”.
Positive cash flow property is the only way to go, he said.
McIntyre says, investors in Australia have been used to 3-4 per cent gross rental yields.
He goes on to explain:
“I am not interested in property unless I get 10 per cent plus yields. Therefore, I don’t have to rely on capital growth or be concerned about funding a mortgage.
“Most investors simply don’t know where to acquire property with 10 per cent plus yields in Australia and are consequently losing a fortune. Moreover, they are also exposed to future rising interest rates.
“It’s also worth mentioning that many property investors rely on capital growth, which may be fleeting in the future in many areas after the property boom of recent years. I target 10 per cent yields so that capital growth is a bonus, however, there are places where you can currently get 10 per cent capital growth or more with 10 per cent yields.
Can You Make Money From A Luxury 2 Bedroom, 2 Bathroom Granny Flat?
“Adding a luxury flat to the back of your existing home or your parent’s home is another way to generate 10 per cent yields, which also helps solve the housing affordability problem.
“Therefore, it will become more common and encouraged by local councils that are after increased density to reduce infrastructure costs of ever expanding suburbs and urban sprawl. It also works great regardless of whether you are in the city or regional areas.
“So let’s assume, a high quality two-bedroom two-bathroom granny flat fully installed at $150,000 AUD for example. Some can be bought or built for less, however by the time you get them installed and complete, you should budget at least $150,000 or slightly more to include a high quality fit out.
“Either way, for many $150,000 is a much cheaper and affordable way to get into the property market. With many parents helping their adult children buy their first investment property, this is also a great strategy to build a luxury 2 bedroom, 2 bathroom granny flat on their parent’s existing back yard.
“You can simply then rent out the home and generate $250-$350 per week, depending on the city and suburb it’s located.
“$350 per week is $18,200 p.a. which is over 10 per cent yield on the $150,000 approximate outlay.
“Why not rent it on Airbnb it? Almost everyone has now heard of Airbnb. The platform allows you to list a spare room or entire house to holiday makers and is disrupting the entire property industry. You could earn as much as $150-$300 per night on Airbnb on weekends alone, therefore almost doubling your potential gross yields by simply renting it out on a Friday and Saturday night”. Any weekday bookings would be an additional bonus.
“If you want to make more money, you could rent your entire home on Airbnb. Many do this to fund their holidays and/or pay off their mortgage. Considering most bookings are usually on a Friday/Saturday night, your entire home could generate $300-$600 a night (or more depending of course on the location and value of your home and the time of year (Christmas and school holidays are likely to make you a lot more money).
“You could stay in your luxury 2 bedroom, 2 bathroom granny flat on weekends and Airbnb your entire home. Alternately, you could Airbnb both and go away for the weekends. You’d be paid effectively to stay in a nice hotel and still profit.
“The cash flow and yields can be very lucrative”.
McIntyre went on to state:
“Some may have objections to renting their entire home on Airbnb, however, if it means they can now afford to pay off their mortgage at rapid speed or fund holidays overseas or enable some to retire or semi-retire and quit a job they don’t like, it can be life changing.
“It’s a real strategy being implemented by an increasing number of people who would have never once considered it.
“Although it’s not for everyone, this strategy can turn normal property into a cash generation machine and enable one to rapidly get ahead financially.
“There are also companies that provide a turn-key service for such flats, including arranging the DA etc. for you. Not only that, I know of some companies that can install and have the luxury 2 bedroom, 2 bathroom granny flats completed in a single day in your back yard.
“This means, you don’t have to wait for months on end to start generating extra cash flow and save the time and hassle of spending your time trying to organise such a project around your current career”, said McIntyre.
For Further Information On This Strategy Visit WealthCreatorServices
*Council regulations vary from state to state.
* AirBnB regulations in the future may limit bookings to 90-120 days annually, which for most is sufficient to generate lucrative profits.