How I Make Over $51,000 Passive Income at 27 | Australian Real Estate Investor
If you're interested in property investing and want to know more about the financials behind it… today I’m breaking down my personal cash flow and profits each year from our property investing portfolio. My partner Emily and I have been lucky enough to build out a large portfolio worth around $5 million. We're pretty open and transparent on our YouTube channel, so we wanted to share what we make each year in terms of profit.
The goal of this post is to give you an idea of what to expect if you're considering property investing. We'll go over our income, expenses, and how much money we're left with at the end of the day. Spoiler alert: we actually make over $50,000 out of our portfolio, and we're looking to grow even more.
Our Portfolio
Our portfolio has a few different targets over the years, including $50,000, $100,000, and $150,000 passive income targets. The start of our portfolio has largely focused on growing our wealth through capital growth and manufactured value. However, with our most recent purchase and purchases going forward, we're going to be shifting to cash flow opportunities.
We're still going to look to manufacture value and have some capital growth, but we're going to be looking for higher interest rate investments and opportunities where we can potentially create more passive income that we can use in our everyday lifestyle.
Our Financial Independence
We're lucky enough to be at the point where we have a level of financial independence. However, we want to grow because we have dreams and aspirations to help other people through other ventures. These ventures will be revealed on the YouTube channel as we progress because we love taking our viewers along for the ride. We love the community and the comments, so if you've got questions about how we've achieved this passive income or anything to do with building a property portfolio, subscribe on Youtube and leave a comment.
Our Properties
Now let's dive straight into the numbers. Let's kick off with property number one. It's currently grossing $69,160 each year, which is $1,330 each week. This home was a property we didn't actually document on the YouTube channel. It's in a suburb just a few kilometers north of Brisbane CBD on a block that's just over 300 square meters. It's a massive home with about six bedrooms, off the top of my head, three and a half bathrooms, and a lot of opportunity. There's still some value-added opportunity in the property. We want to go there and do an external repaint. We're currently fitting out that extra half bathroom, so we're doing a toilet and a basin.
The property grosses really good income because of its proximity to the CBD and because it's a very large home for the area. We did some crazy things as we look to manufacture value on the property as well. We used a three-story high ladder, and my dad and I got under the property for several days and got a 20-ton jack from Kennard’s hire and lifted the property up and got a laser level and re-leveled it. So we tried a lot of manufactured techniques and tried to put in sweat equity on this first property, and it's been a great purchase for us.
We also did something called house hacking for a period of time where you live in the home and also rent out other spaces, which makes it a lot cheaper to own and run the property. We were getting our tenants to pay down our mortgage, which allowed us to save more money and put it towards future purchases.
Property number two, also known as the Baby Queenslander, has a lot of love in our heart. Emily and I took on this project at the start of COVID-19 lockdowns, in March 2020, and manufactured value through various renovation projects. Despite the initial expected rent of around AUD 350-370 per week, after the renovation, the property rents for AUD 450 per week, which is an increase of AUD 23,400 per year. The Baby Queenslander is located on the north side of Brisbane, around 10-12 kilometers from the CBD, and has seen significant capital growth, making it a great investment.
Property number three is the recent purchase in Coffs Harbour, consisting of a house and three units on a medium-density residential block. We bought it for AUD 1.4 million, and it currently grosses AUD 82,920 in annual income, which is AUD 1,590 per week. While there are some higher maintenance costs and management fees associated with this property, it is a strong cash flow investment that provides passive income and financial independence, allowing us to have choices in their work and life.
The Purpose behind Property
For every property that Emily and I own, they also have a sponsor child with Compassion Australia, with each sponsorship costing about AUD 50 per month. They believe in giving back and have a giving component to their life and business. Purpose Property, their buyer's agency, also donates 10% of their revenue to charity.
Total passive income
The total income on their property portfolio is currently AUD 175,240, which works out to AUD 3,370 per week. However, there are various expenses to consider, including vacancy, interest, management fees, council rates, water rates, and insurance.
Property investing can be a great way to create passive income and grow your wealth. Our portfolio has been successful in providing us with financial independence, and we're excited to see where it takes us in the future.
Follow along and learn from our journey: https://www.youtube.com/@lukewiles1
