How to Invest in Property and Create Passive Income
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How to Invest in Property and Create Passive Income


Hi Guys! What’s up? You have seen a lot of ads on owning multiple properties with positive cash flow or passive income, with little money down. Some of you are probably skeptical and think they are some kinds of illegal or grey area investments, or may be scams. But I can tell you it is not a scam. It is actually possible. In order to generate positive cash flow, your rent must be higher than your instalment. And you don’t have to pay ABSD. And the quantum is small. Where to find? You are right when you start to think! Yes, commercial, in particular, industrial properties. Do you know that there are industrial properties as low as just $200K? And still have 20-year lease to go! And we know industrial properties are not subject to ABSD. Let’s do this with an example. Let’s say an industrial property is $250K. About say 1000 sq ft. Some banks can lend you up to 90%! So you only come out with 10%, ie. $25K. Buyer’s stamp duty is not 3 or 4%. It is 1% for the first $180K, and 2% for next $180K. In this case, it is about $3200. Legal fee, let’s say $2,000. Total amount you need is just $30,200. But take note that for most commercial properties you will need to pay GST but you can claim it back if you set up a company. Commercial loan interest rate, let’s say 2.5%. Loan tenor, let’s say 20-year. Computed monthly instalment is $1,192. Now take note that TDSR applies even if you set up a company solely to buy the property. TDSR based on 3.5% is $1,305. That means you must have a gross salary of at least $2,175, which is still pretty low. For a 1000 sq ft industrial property, you can rent out at say about $1,800. That’s a yield of 8.6%, my friend! Now you see, you have a positive cash flow or passive income of about $608 per month To further enhance your passive income, you can explore splitting your property into 2 And then rent out at say $1000 each to receive $2,000 in total. Your passive income is now $808 per month. This looks attractive right? But don’t be too happy first. The catch is the property that you invested in, is it appreciating, stagnant or depreciating? The reason why many people prefer private residential is because, it is proven private residential is an appreciating asset. Most industrial properties have short lease 30-year and when the lease starts to run out, its value also decreased quite fast. If you are purely out for passive income, then it may be for you. But if you going for big capital gain, wealth creation, then private residential may be a better choice. It really depends on what your objectives are. If you want to learn more, make sure you subscribe to my channel. And check out these 2 videos too! Bye!

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