Purchasing a mixed-use property with a shop front, a residence behind it, and enough land to build a granny flat is a highly effective strategy for generating three rental income streams. Here’s how this works, using an example from South West Sydney:
Example
Step 1: Purchase a Mixed-Use Property
In South West Sydney, you could buy an entry-level mixed-use property in Campbelltown for approximately $1.1 million. This property includes a small shop front and a 3-bedroom residence.
Rental Income from Shop Front: A commercial tenant could rent the shop for $600–$800 per week, depending on the location and size. Assuming $700 per week, this generates $36,400 annually.
Rental Income from Residence: The attached 3-bedroom house could rent for $550–$650 per week. Assuming $600 per week, this adds $31,200 annually.
Step 2: Build a Granny Flat
With sufficient land at the back of the property, you can construct a 2-bedroom granny flat for approximately $250,000.
Rental Income from Granny Flat: In Western Sydney, a 2-bedroom granny flat rents for $500–$700 per week. Assuming $600 per week, this adds another $31,200 annually.
Step 3: Calculate Total Costs and Rental Income
| Expense/Income Item | Amount (AUD) |
| Purchase Price of Property | $1,100,000 |
| Cost to Build Granny Flat | $250,000 |
| Total Investment | $1,350,000 |
| Annual Rent – Shop Front | $36,400 |
| Annual Rent – Residence | $31,200 |
| Annual Rent – Granny Flat | $31,200 |
| Total Annual Rental Income | $98,800 |
Step 4: Calculate Annual Yield
To determine the annual rental yield:
Calculating Annual Yield
To determine the annual rental yield, use the following formula:
Yield = (Annual Rental Income ÷ Total Investment) × 100
Applying this formula:
- Annual Rental Income = $98,800
- Total Investment = $1,350,000
Yield = ($98,800 ÷ $1,350,000) × 100
Yield = 7.32%
This shows that the property generates a 7.32% annual rental yield, making it a strong investment option.
Key Benefits
Diverse Income Streams: With three tenants (commercial and residential), vacancy risks are minimized.
High Yield Potential: A yield of over 7% is competitive in Sydney’s property market.
Long-Term Growth: Mixed-use properties and granny flats often appreciate faster due to their multi-functional nature.
In South West or North West Sydney, the price range for shop fronts with residences (mixed-use properties) varies based on suburb and property size:
South West Sydney (e.g., Campbelltown): Entry-level properties range from $900K–$1.3M.
North West Sydney (e.g., Riverstone): Entry-level properties range from $1M–$1.4M.
This strategy not only generates substantial rental income but also enhances the property’s resale value significantly.
Maximise Your Investment: 3 Rental Incomes from One Block of Land
This is just one smart strategy I help my clients achieve—earning three rental incomes from one block of land by maximizing its potential. Imagine securing a mixed-use property with a shop front, a residence, and enough land to build a granny flat, all generating income from one parcel of land.
If you’re ready to explore this strategy, here’s how I can assist you:
How I Can Help You
🔹 Save Time: No need to spend hours working out your serviceability, researching properties, or negotiating deals—I handle it all for you.
🔹 Loan Assistance:
- Work out your serviceability and borrowing power.
- Secure loans from 40+ lenders, finding the best loan tailored to your individual situation.
- Compare options beyond what one bank offers to ensure you get the most competitive rates and terms.
🔹 Property Research & Acquisition:
- Research and shortlist properties that fit the 3-income strategy.
- Conduct pest and building inspections for peace of mind.
- Negotiate or bid at auctions to secure the property at the best price.
🔹 Granny Flat Construction:
- Arrange a trusted builder to construct your granny flat efficiently and cost-effectively.
🔹 Maximise Rental Income:
- Help you achieve three rental incomes on one parcel of land, boosting your cash flow and long-term returns.
Why Choose Me?
Nick from Truth Group is here to make property investment simple, effective, and profitable for you:
- Save time because time is money.
- Access expert research, sourcing, and negotiation skills to secure the right property for your goals.
- Avoid the hassle of going to every single bank or settling for limited options from one lender.
- Achieve 3x rental income on one block of land, maximizing your investment potential.
If you’re ready to take action and build wealth through smart property strategies, reach out today! Let me help you turn this vision into reality.
Click here 👉 to book a Discovery Call
Discover more from Truth Group Pty Ltd
Subscribe to get the latest posts sent to your email.