Shed investing is not competitive like residential property investing. There are plenty of deals for everyone. In my little town of 12,000, I have already completed nearly a dozen deals with several more in the pipeline. That’s just one area!

Across Australia, there are hundreds of potential opportunities right now. I don’t have the time or the capital to take advantage of them. So, instead of letting them go untouched, I saw an opportunity to teach others my strategy.

It’s win-win. I get to build a community of like-minded investors to share knowledge with and organise JVs. You get access to my proven systems and checklists.

I’m not going to pretend I have a big social media following. I’m a builder and an investor, not a guru. I barely even use Facebook.

But I know this works because I’m in the trenches every day investing my money and doing deals. This real-world experience is far more important than the number of likes on my social media posts.

Not as much as you would expect.

My first shed cost me $60,000 as a deposit, and I was into my first deal. I have also put together deals and approached money partners whereby I do the work, someone else funds it, and we then split the profits.

These deals can be a great way to get started. You can be $0 out of pocket and still get the benefit and upside of the profit.

But if you have equity or savings and want to attack the deal alone, you will typically need 35% of the purchase price plus another 4-5% for closing costs and stamp duty. Plus 10% - 15% of the purchase price for value add. That means on a $600k shed, your cash invested would be about $264k.

This requires a slightly higher upfront investment than a residential flip. However, the returns are significantly higher.

• House flippers aim for a 20% return. But because there is so much competition, many investors are happy to settle for 10%. This is a small profit considering the amount of work and hassle involved in a deal. The net return can be as bad as 2-3%

• Shed flips can generate up to 30% - 100%+ returns. I aim for a minimum net return of 6.5%. It can be as high as 7-10% depending on your area.

It’s much easier to add value to a shed than to a residential property.

In fact, it’s possible to increase the value without even stepping on site by having a new lease drawn up or raising the rent.

Other easy uplift strategies include adding a concrete driveway or a new fence. These can increase the value by tens of thousands of dollars virtually overnight.

On bigger projects, you can add a mezzanine, fence off a section of the block, or even add a wall and a separate entrance to add an extra tenant.

It’s also possible to add value over time, so you don’t need to do everything at once.

Everywhere!

In my little regional town, I’ve completed more than a dozen deals. One of my students recently found an opportunity to secure 22 sheds in his suburb.

This is one of the many benefits of shed investing. You don’t have to invest interstate in sites you will never see.

Instead, you can become an expert in your local area and build a network of local connections.

When you focus on one area, you will know which types of sheds make the best investments and which deals to avoid. If a competitor tries to enter your suburb later, you will have too much of an advantage.

Yes! With one caveat: your numbers MUST stack up, which is one of the main things I teach my students.

The good news is that once you know how to structure deals, obtaining financing for sheds is often easier than securing a residential property loan.

First of all, leases are typically 3–10 years, compared to residential leases (6–12 months). This means stable, predictable rental income, which the bank loves because it lowers risk.

Second, shed tenants usually cover most outgoings, including rates, insurance, and maintenance. This makes the investment safer in the bank's eyes.

Third, sheds generally offer higher rental yields than residential properties. This makes it easier for shed investors to cover the loan repayments.

Fourth, business tenants are lower risk because their livelihoods are tied to the shed. This means they are more likely to pay on time and maintain the property.

Fifth, shed values are driven by rental income from the asset. This can immediately be improved by drawing up a new lease and increasing the rent upon settlement.

Finally, by structuring your finances effectively, each deal can put you in a stronger position to grow your portfolio without limitations.

In my experience, this is a myth.

I see many inexperienced investors claiming that sheds are poor capital growth assets. But that’s not what the numbers say!

For example, over the past 20 years, industrial sheds in Sydney have delivered a 261% return compared to 171% for residential property. In Adelaide, capital growth for sheds and residential properties is on par.

With that said, it’s important to keep in mind that slow and steady capital growth is not the goal of shed investments. We aim to generate significant cash flow and profits quickly rather than waiting years for the market.

Everybody needs a house. Not everybody needs a shed. So is the market really that big?

You would be surprised.

There has always been a need for sheds for tradespeople, manufacturers, and other businesses that don’t require a storefront.

However, in recent years, demand has exploded due to the rise of e-commerce businesses, which need space for storage and distribution.

In fact, one of my first shed investments happened because I was looking for a facility for my online store. There was a huge shortage of sheds - nothing for sale or rent. So I ended up finding a property off-market and fixing it up.

The beauty of sheds is that there are numerous deals and very little competition. In fact, you will probably be the only shed investor in your town when you first start out. I was!

This is very different from when I did residential flips and small developments. That’s a very stressful game. You have to move fast when you find a deal and be willing to pay top dollar, as the competition is crazy

That’s why I would say this is a golden opportunity for fast-moving action takers to capitalise on a fantastic strategy.

One of the significant concerns with commercial property is the risk of being left with empty premises, which can be costly.

But my strategy mitigates this risk because I flip sheds as quickly as possible and move on to the next deal. I only ever hold onto an asset when I’m confident that it will generate long-term, sustainable cash flow.

Being a tradie is obviously an advantage because you have valuable knowledge and skills. But it’s not necessary.

Even if you have trade skills, I recommend building systems and outsourcing the work to others, especially for specialised fit-outs.

I learned this lesson the hard way. When I first started, I had the tradie mentality of doing everything myself. But I found that it held me back, often slowing down my progress. It was only when I got off the tools and started thinking like an investor that I started making real money.

In my program, I show you how to build a reliable team of tradies and manage them effectively.

Sheds are not only simpler, but in my opinion, less risky than houses or apartment flipping.

You do not have competition from other investors, so you don’t have to overpay for property. Street appeal is not an issue. And the holding costs during a flip are negligible. It’s also possible to line up tenants before you even settle on a property, which reduces your risk even more.

There are two main buyers of these sheds once you renovate them. One is other investors, the other is owner-occupiers.

With investors, they are simply wanting a return on their investment. So if the rent vs the purchase price stacks up (the yield), then it is a straightforward decision to purchase it from you.

With owner-occupiers, they are looking for a place for their business. These buyers will often pay top dollar if a shed is a good fit for them.

No, shed tenants are not riskier than residential tenants.

A commercial lease is a legal document between two parties. One is the tenant, whose livelihood is directly tied to the property. The other party is you, the landlord, and this document lays out the requirements of each party in black and white. It is in the tenant’s best interest to stick to the agreement, and usually, you will never hear from them.

That means, with the right shed, the right tenant, and the lease in place, the only time you need to think about it is when the rent is deposited into your account every month.

The problem with flipping houses and residential investing in general is that the margins are so thin. Often, one mistake or unexpected cost means you end up making very little or no profit.

Shed flipping or shed investing in general has the potential for enormous upside because the profits and margins are much bigger.

My strategy is to invest in areas with a limited supply of sheds and growing demand. If you do your due diligence, it’s unlikely that you will get stuck with an asset that you cannot offload or rent.

This is the age-old argument with houses. Everyone needs a home to live in, so investors believe residential will be a more familiar and easier option.

More familiar? Yes.

Easier? No.

The reality is that house flipping is very competitive with razor-thin margins. Even the smallest mistake can result in a net loss.

Shed flips, on the other hand, are less competitive and more profitable. Even if you make mistakes during the flip, you are still likely to make a profit.

Short answer: Yes.

Long answer:

The returns with shed investing are net. Shed tenants cover virtually all outgoings. You usually just cover the mortgage repayments.

The returns from residential properties are gross. You must use the rent you receive from tenants to cover all costs, including your mortgage payment, rates, strata fees, insurance, and other expenses.

This means that the cash flow from sheds is significantly higher than from residential houses and apartments.

Once you have a system in place, you can complete a shed flip in as little as 90 days. However, for your first deal, assume it will take around 6- 12 months, depending on your previous experience.

In my program, I provide checklists to help you understand the costs and how to minimise them. However, if you overlook something and it causes a delay, it’s not the end of the world, because sheds have little to no holding costs.

Sheds are the most overlooked investment class in regional areas because they get no coverage in the media. Absolutely nobody is talking about them. And herein lies the opportunity.

All these booming residential areas create demand for services & the infrastructure to support them. After all, you can’t have a booming population without plumbers, chippies, builders and so on.

It’s the “picks and shovels” theory. During the gold rush, most of the money wasn’t made by the gold miners. It was made by businesses selling picks, shovels, and other equipment.

If the shed were in perfect condition and you bought it at market value, it wouldn’t. But that’s not my strategy.

I focus on finding run-down, abandoned sheds - and I secure them at below the potential market value.

I then make it more appealing to command a higher lease, which attracts a better quality of tenant and increases the property's value.

The worst-case scenario is that you can’t flip the shed for the price you want. You have to keep it as a rental. And, as a result, you don’t have enough capital for your next project.

You can usually avoid this by doing your due diligence. But if you do end up in this situation, it’s not the end of the world. You have options.

For example, you could refinance the shed and pull out the funds you need. Or you could find a money partner to JV with.

There is always another way. And, Plan B often turns out to be better than Plan A.