How To Buy Income Streams
Putting together a diverse property portfolio requires a lot of strategising. I personally use a number of different approaches to ensure I’m getting the best return back from the markets I invest in. However, one strategy I swear by, and that has become somewhat of a golden ticket for me, is buying income streams.
What do I mean by that? Well one of the best ways to create cash flow out of property is through a dual property where there’s more than one income on the title.
The purpose of this isn’t necessarily capital growth – although in a lot of cases you may still benefit from it – but rather to generate additional revenue that you can live off once that title is paid down.
Here’s a breakdown of the types of properties you could look for to foster dual income:
A duplex consists of two adjoining properties that generally sit under the same title. Think of a block of land that has been subdivided into two townhouses or two flats.
You’re able to receive income from both residences, which if you’ve chosen the location well, could have projected returns of six to seven per cent.
A granny flat is a self-contained, secondary dwelling that is usually the size of a studio apartment built behind your existing property.
They are a fast way for investors or even just homeowners to build equity in real estate.
A shop-top property is where a residential dwelling occupies the same lot as a retail space, generally you’d see it as an apartment above or behind a shop.
Shop-top housing is one way investors can diversify their portfolio across the residential and commercial property markets.
REDUCE YOUR DEBTS FASTER
The best part of this strategy is that it is excellent for debt reduction.
Of course, whether you buy or build will make an added difference, however the principle remains that you’ll be receiving double the rent which will cover well above the cost to own and run the property.
What would have been a typical 30 year mortgage could now be paid off in half of that time, meaning you’ll be able to start living off passive income sooner rather than later.
DIVERSIFY YOUR PORTFOLIO WITH DIFFERENT STRATEGIES
There is no ‘one size fits all’ when it comes to real estate investing and there is no one right strategy that will get you where you want to go.
The team at Positive Real Estate are experts in strategising and finding what works best for you. If you’re new to the property market, or looking to diversify your current portfolio, come along to our free real estate investing seminar and learn how to set yourself up for success.
By Sam Saggers