The Australian share market is home to a large number of ASX income shares.
This makes it a great place to generate a source of passive income.
But would it be possible to generate $500 in month income from an ASX share portfolio? Let's find out.
$500 of monthly income from an ASX share portfolio
Firstly, $500 of monthly income is the equivalent of $6,000 per year. So, let's target that amount.
With an average dividend yield of 5% easily achievable by investing in select high-yield ASX income shares, this means that a portfolio of $120,000 would be required to generate the desired amount of income.
If you are fortunate enough to already have this amount of money to invest, then you can simply build an ASX share portfolio with an average dividend yield of 5% and sit back and watch the income flood in.
For those that don't have that level of capital to invest, don't worry. Time and compounding can get you there.
If you can afford to invest $600 a month into the share market and achieve an average return of 10% per annum, which is in line with historical averages, then you would grow your portfolio to $120,000 in 10 years.
At that point, you can construct your portfolio so that it has an average dividend yield of 5% and start generating income.
Which ASX income shares could be buys?
A couple of ASX income shares that could be worth considering if you're ready to build your income portfolio are listed below.
Here's what analysts are saying about them:
Centuria Industrial REIT (ASX: CIP)
The team at UBS thinks that Centuria Industrial could be an ASX income share to buy.
It is Australia's largest domestic pure play industrial property investment company with portfolio comprising 89 high-quality, fit-for-purpose industrial assets worth a collective $3.8 billion.
UBS currently has a buy rating and $3.55 price target on its shares.
As for income, the broker is forecasting dividends per share of 16 cents in FY 2025 and then 17 cents in FY 2026. Based on the current Centuria Industrial share price of $3.20, this represents dividend yields of 5% and 5.3%, respectively.
APA Group (ASX: APA)
Over at Macquarie, its analysts think that APA Group could be an ASX income share to buy. It is a leading energy infrastructure company with a portfolio of high-quality, cash-generating assets.
The broker has an outperform rating and $8.47 price target on its shares.
In respect to dividends, Macquarie is forecasting dividends per share of 57 cents in FY 2025 and then 58.5 cents in FY 2026. Based on the current APA Group share price of $7.40, this equates to 7.7% and 7.9% dividend yields, respectively.
