Growing Your Passive Income Stream with Rental Properties
One of the best ways to earn a passive income stream is by investing in real estate. If you find the right property, prepare an effective strategy and implement it properly, you can easily earn a steady and reliable income for many years to come.
Growing your passive income stream with rental properties can become lucrative pretty quick. However, it is important to make sure that you know what you’re getting into if you decide to invest in a rental property. Here are some tips on how you can grow your passive income stream with rental properties:
1. Find the Right Rental Property
There are some people who are not interested to get into the rental property business on a large scale. For example, some people are comfortable just renting out one of their two homes. This is an easy for growing your passive income with rental properties.
Another strategy might be to rent out your basement. But, before doing so, you will have to ensure that the basement is in livable condition and that there is a proper kitchen and washroom for potential tenants. You also need to secure a permit to build a kitchen in your basement. If you intend to use this space for rental income, make sure to follow your state’s requirements before you rent it out.
People also opt to rent out a room or two in their home with a shared kitchen and laundry. This is also a good way of getting additional income without much effort or investment. You will need to select your tenants carefully. Don’t rush into accepting just any tenant. Conduct credit and employment checks to make sure you can trust the people who you choose to share or rent out your home to.
2. AirBnB Your Property To Help Pay Your Mortgage
A hugely popular way of growing your passive income stream with rental properties is with Airbnb. Depending on where you live and what you have to offer, you can rent the place seasonally or all year round.
The best thing about renting on Airbnb is that there is a lot of flexibility. If you don’t want to commit renting out your property for an extended period of time, you can choose to list it only when it’s available.
Some people rent out their properties during the summer, some over the weekends, and some block out dates when it’s not available. You can rent out a room or the entire home if you prefer. It’s completely up to you. Airbnb works well if you live in a location that’s attractive to tourists. The great thing about Airbnb is that you can also accept or reject applicants based on the information they provide.
For more information about where you CAN and CAN not rent out your whole house near Asheville, NC, read our AirBnB and Short-Term Rentals in Asheville post.
3. Turnkey Property
A turnkey property is when you purchase a property and can rent it out immediately. These properties are perfect for those who are interested in generating income but do not have the time or the skills to renovate the property or even deal with maintenance issues.
Usually, many choose to hire a property management company to manage the property for them. Ideally, your rental property should be in an area where potential tenants have access to decent transportation services, schools, and shopping plazas.
Most people often choose a convenient location close to or within the town limits. Not unless they are specifically looking for a summer retreat or a break away from the noise of the city.
4. Out of State Investing
There are many people who buy properties in Florida, Arizona, New Mexico, and even Central America. They then rent these out to tourists. Because the properties are out of state, managing a rental can be difficult.
It's for this reason owners usually hire the services of a property management company to handle everything for them. An out-of-state investment can be a good idea especially if you find a place that’s being sold at a great price.
5. Flipping Houses or Buy and Hold
Another great way to earn passive income is to buy run-down homes, make major improvements, and then sell them at a higher price. But this is probably the most difficult way to make income as it requires a lot of work.
While you may be able to buy a house at a very low price, it may take a lot of money and effort to renovate it. However, people often do it successfully. You need to be sure of the type of property you’re getting, and you should know from the very beginning how much work is required to make it livable.
There is no question that investing in real estate can help you earn a steady passive income. But remember, just because it is passive does not mean it is easy. Real estate investment requires a lot of work.
Seek the service of a realtor for the best way to find the right property. Don’t attempt to select a property on your own. There are many factors involved when buying real estate. You will need to consult with a real estate agent and check out a few places. You will also need to figure out how much it will cost you, assess the tax history, and ensure that it is in a good location. If you’re interested in succeeding at real investing, do your research to make the best decisions!