Wednesday, January 4, 2017
Making Your Money Work Harder: Earning Cash With Real Estate
Property is a smart way to invest your money, and while there might be rises and falls in the market generally property prices will increase year on year. Here are just a few of the ways you can make money through property
Here you will buy a property, often cheaply at auction, and then sell for a profit. It’s worth bearing in mind however that there is risk with flipping houses and it pays to be knowledgeable about the property market. For example, you need to understand what is going to make you the most profit as opposed to what you personally like in a home. You need to be aware of the ‘ceiling price’ in different areas, as no matter how high spec you finish the property this means it will only ever sell for a limited price. You also need to know what buyers are looking for so that you can make your sales quickly and free up the cash to invest again elsewhere. You don’t want to end up with a situation where you’re stuck with a property and are unable to sell it for many months. If you’re looking to flip houses for a career, you will need a team of reliable tradespeople. Workers you know you can trust to do a good job and not overcharge you, maximizing your profits while restoring properties to an excellent standard.
Renting Out Properties
Instead of selling properties for a profit, renting them out instead can be a good way to go. Once you have a number of them finished with long term tenants, they will continue to earn you money each month. Many areas have a shortage of homes that are available to rent privately meaning you should never be left without a tenant, and will even be able to pick what kind of tenants you want. If you have a number of properties that you rent out, it can be beneficial to hire an agent to deal with them for you. You’ll pay a fee for this, but it means that you don’t need to deal with tenants directly and the agent is responsible for chasing up rent each month.
Passive Real Estate
When you invest in passive real estate, you don’t deal with the hassles of daily management. This is useful for those who aren’t able to become full-time landlords due to time restraints. You also don’t have to deal with the banks since this is done on your behalf by the professional private real estate investment company you’re working with. Plus passive real estate allows tax-deferred cash returns; this means that you keep more of your earnings.
Renting a Room in Your Property
Even if you don’t have money to start investing in property right away, you could start earning money with your own home. If you have a spare room, taking on a lodger and becoming a live-in landlord is one option. Alternatively, in some cases, it can make sense to rent out your property, and you rent somewhere else that’s cheaper. This could be a short-term arrangement of a year or two, and allow you to generate some income before moving back in.