As you probably know by now, it’s not just saving money or a good budget that will give you the financial freedom you desire. It’s also creating additional sources of income, specifically, passive income sources! Once these passive income streams have been strategically set in motion, it will accumulate money even if you don’t do anything.
One of the passive income ideas for your financial success is renting out your property. Considered to be a very dependable business, you can count on a steady flow of income for as long as your house or room is available for occupancy. If you’ve got an extra room or guest house to spare and you don’t know what to do with it, this article will definitely help you!
What do you do?
If you’re planning to buy property, you would usually try to get it at a low price, wait for the value to escalate before selling it for a higher price. Instead of getting the returns in a lump sum, why not keep the property and earn from it for a very long time? That’s where renting it out comes in. The same goes if you have multiple properties under your name. Instead of letting your extra houses dust and become a stagnant asset, you might as make money out of it!
However, it’s important to consider a few factors when you’re renting out you property:
• Mortgage and maintenance costs. If you are paying high amounts on these, you can simply adjust the recurring cost or rent. However, remember you still have to consider the fact that potential occupants will only consider the above average rate if your place is absolutely worth it to them.
• Occupancy rate. As mentioned above, depending on the cost, location, and the appeal of your property, occupants may or may not come rushing to rent out right away. In fact, you might have to wait for months before earning your passive income. Until someone moves in, you’re the one who’s going to pay for the costs of owning the property.
• Aim for permanent occupants. Unless your property is meant to be a tourist or vacation spot, avoid renting out your property for transients. Instead, open it for couples or small families. The longer they rent out your place, the longer you’ll be earning your passive income.
• Separate the utility bills. Before opening your house for vacancy, you might want to separate the utility meters for electricity and water. This way, it will be easy to collect just the monthly rent and let the renters pay the utility bills they accumulate.
• Location. If you’re planning to actively manage your property, it’s best to find a place that’s near where you live—unless you’re planning to hire someone to manage the place for you, that is. To increase your chances of being picked by great occupants, make sure that essential establishments are near your place. These key landmarks not only make your space for rent more attractive and convenient, but they’re going to be easy to find to:
- Transportation terminals
What are the things that a potential occupant will look for?
If you really want to know what kind of apartment or flat that potential occupants would want to rent out, it’s best to put yourself in their shoes. Now, if you’re out looking for space to rent out, the following list will also be beneficial to you. Since you’ll be wanting to live somewhere problem-free, knowing what to look for is simply a must!
Here are a few questions to ask the landlord before you make your first deposit:
• Why did the previous tenants leave?
• Are the basic utilities (air conditioning system, heater, hot water, lights, stove, toilets, etc.) in tiptop condition?
• Are there major appliances (refrigerators, stoves, microwaves, washing machine, etc.) included in your contract? Check its status and report any defects before moving in.
• Are pets allowed?
• Is there an adequate parking space?
• Who will do the repairs? Will the landlord allow you to contact your own repairmen or is there a service or repair plan in the contract?
• What’s the most common pest problem in the place? How often do they conduct pest control services?
• Is the property secure? Has it under been foreclosure before?
• Is there a release cause in your contract?
Finally, make sure that your rent contract contains all the important details of your agreement with the landlord. For instance, make sure that the spelling of your name is correct in the contract, as it should also indicate the start of your occupancy. The amount you are to pay each month and its monthly due is also a must-read in your contract.
What if I don’t want to rent out my place?
If, however, you don’t like the idea of renting out your place for residency, you can also use your place for alternative passive income ideas such as:
1. Bed & Breakfast. An unused room for a college/graduate student or families/couples
2. Office space. You can use rooms for startups, recording studios, or consultancy firms.
3. Multipurpose halls. You can rent it out for parties, weddings, birthdays, or family reunions.
4. Storage. If you’re just about to build in an empty lot, it doesn’t have to be a house or a flat. You can build secure locker units for storage space. You’ll be surprised about how people need somewhere to put their things despite having houses.
Don’t dither to explore different kinds of passive income streams to help you achieve financial independence goals! Hence, if you want to make the most out of your earnings or if you want to avoid putting all your money into paying off your debts, you might as well wipe out that debt ASAP! To give you the debt relief help you need, Financial Rescue LLC is here to help you. With our debt settlement programs, we’re more than equipped to help you overcome your financial struggles with debt…for a lower amount too! Don’t hesitate and call 1-877-97-DEBTS for your first FREE consultation.