Unique Strategies to Make Money from Rental Properties
February 04, 2020
The real estate industry is a behemoth of a market, valued at over $2.1 trillion. This doesn’t mean that simply entering the field wide-eyed without any viable strategy would cause you to capitalize on the infinite opportunities it provides. The heat of the competition is quite formidable with a lot of risks that should be approached carefully, requiring a good eye that can see opportunities before others can. Many think that making a good amount of money from real estate requires a lot of starting capital, but that isn’t always the case if you vary your strategies. All you truly need is dedication and the ability to research properly before investing or making any changes on any property. We’ve listed a few great strategies that can get you started on making money from rental properties. Get inspired!
Making It Official
When you’re looking to get into the rental property business, you can’t really grow big unless you become official. A definitive ‘how to start a property management company 101’ guide that includes essential prerequisites will equip you with the necessary knowledge to get you started. You’ll want to check the licensing laws of your state, as they tend to vary. Once you decide on a name, you’ll want to make sure you have a well-designed property management website. Your SEO and marketing strategies are going to affect how much money you make, so make sure you invest in them after choosing a business structure or mode of operation.
Appreciation of Properties
Appreciation means a gradual increase in the value of an asset over time. Real estate has a rather predictable appreciation pattern that you won’t find in most markets. This doesn’t mean that it’s possible to always predict whether a property would appreciate for sure or not. There are three main indicators on whether a property appreciates or not and at which value:
Every real estate market in a city has different values when it comes to appreciation trends. Some cities appreciate more consistently than others. If you can choose where to invest, then it’s better to become familiar with the trends and laws of the designated location.
Investing during a recession is one of the most sure-fire ways of winning a bet on appreciation since property prices are at their lowest. If the market is booming, it’s a gamble to think that the property will appreciate it easily, and if it does, the appreciation rate may not be that favorable. Knowing the property’s true value during different times is key to finding the right timing of investment.
● Property Type
The type of property you’ll be investing in or renting to someone can dictate the rate of appreciation it sees.
Leasing properties are one of the best solutions when you’re looking into investing in real estate without a big capital. Leasing at a fixed state with the option to buy can help you use the rental money collected to be able to pay off for the house at a price that is considerably lower than its current market value. It’s also possible to sell the leasing rights to another entity and make some considerable profit if your timing was right. A lease gives you a lot of options and is best used when you’d prefer not to risk a lot of money.
If you’re still new to the game and would like to get your feet wet before you dive, renting additional storage to those who need them is a guaranteed way to make money. Some people just have too much stuff, to the point of hoarding, frankly speaking. Choosing between additional storage and getting rid of the stuff usually ends up in the storage’s favor. If your property has an extra space that isn’t being utilized, you can turn it into a lucrative opportunity by offering tenants or outsiders the storage for a fee. The regulations and rental laws are much more lenient when it comes to leasing storage space, making it a worthy strategy.
Offering property-related services to your tenants is a pretty clever way to make money without any hassle. New tenants are often too busy to have a stable or long-known service people to do things like lawn mowing, plumbing, and many other activities. You can put your business and location’s knowledge to use by offering them professional services at a certain fee. You’ll be able to do business with both the tenant and the service people, a win-win situation.
Making money from rental properties is a great way to safely invest money in one of the most basic and wanted assets. There is no shortage of ways to invest in the real estate market. Be sure to size up your capital and make a plan after some thorough research to pull it off. Good luck!