The ONE critical piece of advice from a ‘cashflow queen’ that helped a mum-of-three buy a $1million dollar property – and she now earns $120k a year in passive income
CARINA STATHIS FOR DAILY MAIL AUSTRALIA
https://www.dailymail.co.uk/femail/article-10694681/The-critical-advice-helped-mum-three-buy-1million-dollar-property.html
Joey Young is a busy mum-of-three kids under the age of four who once lacked a general understanding about investing in real estate – and now she owns multiple properties across Australia.
The 45-year-old fire safety engineer from Sydney felt limited by her income and liked the idea of investing in real estate compared to the stock market.
It wasn’t until she met leading Sydney property specialist Helen Tarrant that she began to comprehend how investing in commercial real estate, rather than residential, can help her reach her goals.
‘I now see commercial property as a vehicle to get you from A to B; You’ll never pay back the loan, but you can make passive income or cash flow on top of your income along the way,’ Ms Young told Daily Mail Australia.
With guidance from Ms Tarrant, Ms Young bought a commercial property in Queensland – a Beaurepaires tyre store – in February 2020 for $1.06million dollars.
Over the last financial year, she’s made a cashflow profit of $65,000 per year after all expenses have been paid.
Sydney mum Joey Young met leading commercial property specialist Helen Tarrant (pictured) in 2019 who taught her ‘everything’ she knows today about investing in commercial property
With guidance from Ms Tarrant, Ms Young (pictured, left) bought a commercial property in Queensland – a Beaurepaires tyre store – in February 2020 for $1.06million dollars and made an annual returning profit of $65,000
More than anything, Ms Young strives to put her three kids, aged four, three and 18 months, through the ‘best possible education’ and retire early.
In order to reach her goals, Ms Young previously dabbled in property and purchased her first residential investment in 2009.
She says she bought up to six properties over seven years in New South Wales but hit a ‘road block’ when the bank ‘wouldn’t let her borrow any more money’.
‘I had equity in the properties but couldn’t use any of it, so I needed another way,’ she claims.
Ms Young says for her, owning residential homes was only taking money out of her pocket and became a liability rather than an asset.
‘It was like I was a poor woman living in a mansion – I had no extra funds coming in besides my income and was spending money on the interest repayments trying to pay it off faster,’ she said.
Prior to meeting Ms Tarrant and considering commercial options, Ms Young bought a small retail store which was left vacant for three years.
‘It was a complete disaster,’ she said.
RESIDENTIAL PROPERTIES
– Residential properties include houses, apartments and units or land
– Residential homes are often bought with the goal to pay off the loan
– You’ll require a deposit between 5 and 20 per cent
– The lease is usually six to 12 months
– You’ll need pre-approval from the bank for a loan
COMMERICAL PROPERTIES
– Commercial properties are usually businesses – such as office buildings, shopping centres and petrol stations
– Usually the owner buys commercial properties solely for investments
– You’ll require a deposit of at least 30 per cent
– The lease can be anywhere between six months to a few years
What occurred next was ‘life changing’ for Ms Young who put down a 35 per cent deposit to purchase the Beaurepaires tyre store in Queensland.
She sourced the funds needed by saving, refinancing her homes and from the incomes of her and her partner.
Through Ms Tarrant’s expert advice and connections, Ms Young claims she was able to access a ‘brand new trust’ to assist with her investment.
‘A 35 per cent deposit sounds like a lot of money upfront, but it isn’t compared to the amount returned,’ she said.
By the end of 2020 Ms Young purchase a Queensland office building for around $965,000.
Last financial year she also made $62,000 in annual profit to the beneficiaries.
Between the two properties bought for $2million dollars, she made $120,000 back through ‘passive income’.
In February 2020, Ms Young purchased Beaurepaires tyre store in Queensland (pictured) for $1.06million dollars
Over the last financial year, she’s made a cashflow profit of $65,000 per year after all expenses have been paid. Ms Young added that it’s essential to ‘change your mindset’ to understand how to reap the benefits commercial properties offer
Ms Young added that it’s essential to ‘change your mindset’ to understand how to reap the benefits commercial properties offer.
‘The only time you make profit in residential real estate is when you sell – and that can take up to ten years,’ she said.
‘But with commercial real estate, I have money coming straight into my account monthly.’
Today Ms Young still owns all the real estate she has purchased and is planning to buy her third commercial property.
One of mistakes she regrets was paying extra upfront on the first properties she purchased.
TOP FINANCIAL TERMS AND WHAT THEY MEAN:
Passive income – money generated from an enterprise in which a person is not actively involved
Cash flow – the total amount of money being transferred into and out of a business, especially as affecting liquidity
Negative gearing – the practice of investing borrowed money in such a way as to result in a loss that can be claimed as a tax deduction
Financial literacy – confident understanding of concepts of money, such as investing, saving and passive income
Source: Oxford Dictionary
Ms Tarrant is the ‘cashflow queen’ who has amassed a property portfolio worth over $10 million within five years.
Research commissioned by Ms Tarrant found that one in three Aussies (32 per cent) are considering investing in commercial property as their investment strategy of choice.
When Aussies were told that owning a commercial property would mean they didn’t have to pay upfront costs – such as insurances, strata, council fees and taxes – this number jumped to 44 per cent.
Ms Tarrant said these numbers reflect the clients she works with everyday and the financial goals they want to achieve.
It’s clear Australians are obsessed with residential property, which is exactly why Ms Tarrant believes many often don’t consider investing in anything that’s ‘against the trend’.
Ms Tarrant (pictured) is the ‘cashflow queen’ who has amassed a property portfolio worth over $10 million within five years
‘To invest in anything that’s not frequently discussed or taught makes it so much harder for people to get their head around the idea, and to find the right investment strategy for them,’ she claims.
‘Many people don’t realise that when you buy a commercial property, as the landlord, you are not up for the same hard costs as residential property – things like insurances, water and strata, land taxes – are all paid by your tenant, which ensures a much higher return.
‘And many people also feel that commercial property is highly unaffordable, when that’s just not the case.
‘By removing some of the stigma and lack of education around buying a commercial space, first time investors can really go ‘against the grain’ and build some strong financial and property portfolios.’
If you’d like to find out more about Ms Tarrant, click here.
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