So my firm does not let me invest in individual stocks, which means that the majority of my investments are just in ETFs. There's nothing "wrong" with that per se, but lately I've been thinking about non-public market ideas to make passive income, which is where parking spaces come in. As far as how active I’ll have to be, renting out my spot in the past has been pretty painless (or maybe I just got a good renter for the parking space I currently own).
In my condo building downtown, I've seen listings for parking spaces for sale for $30k or so. Rents for parking spots usually go for $225-250/month and there is a monthly assessment of $50 or so and annual property tax is about $600, so the net annual rent is like $1500-1800 per year. This equates to an unlevered net yield of 5-6%, which is pretty mediocre.
However, if I can lever this up at like 75% LTV via a personal loan at a decent rate (fortunately I have pretty good credit… does anyone know what personal loan rates are like?), then the net yield becomes 14-20%ish, which seems pretty good. Worth noting not all of this return will be in cash, as I will have to pay down the loan too.
One thing I am not sure about is personal income tax - IIRC, depreciation offsets a good amount of this. I guess I'll see when I do my taxes this year.
So, WSO – what am I not considering? Obviously the local RE market matters, so I’ll need to do more research there, but if there’s something totally obvious that I’m missing, I’d like to hear about it.
Please also feel free to post other ideas in this thread.
I’d just add that instead of using leverage to reduce your equity and boost your ROE it might be worth to use gearing to buy for instance 4-6 parking spaces. You will not only make more money in absolute terms but also mitigate the risk of selecting poorly the renter.
Money - what do you do with it? (creating passive income) (Originally Posted: 12/11/2016)
While this question might be more relevant to more junior guys on the street, the insight from more senior bankers is greatly appreciated.
Surely, many of us went to banking to pursue this lavish lifestyle, burning through that monthly income (which is above the average, but still not that great) and waiting for that bonus to burn through it even faster.
However, I am sure some of us do aim to create some passive income for themselves.
Hence, the question arises - where to start? How / where to invest (especially given the professional restrictions)?
Where do you guys source ideas from? Where do you put your $ at work? And, most importantly, what concrete targets do you set for yourself?
Don't take financial advice on WSO.
how do I generate automated cash flow and avoid becoming the fat bald man in a red bmw? (Originally Posted: 10/19/2010)
like the title says. Do any of you have a side business that generates A.C.F?
You've been reading 4-hour workweek I see.
Buy a Mercedes instead.
lol
Never in the history of man kind has it been easier for someone to create something, invent something, make money on the site. Start selling stuff on ebay, become a niche expert, start a finance newsletter, tutor kids, get a masters and teach at night, whatever.
There is countless opportunity out there.
Don't we all want to know.
Most people will respond with either Real Estate or an online business.
While I believe both can be at least moderately successful, I haven't found the right risk/reward/time requirement balance yet.
Let me know when you find it/
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