8 beneficial ways to invest in rental properties
8 beneficial ways to invest inrnrental propertiesrnrn
Investing into real estate is a broad field and the spectrumrnhas many modes of investment that can make you money and earn great respect. Itrnalso adds to the portfolio, so the next time you go for an investment you mustrnbe ahead of many of your peers.
In all these modes, investing into rental properties isrnconsidered as the best by many. This is due to the reason that it provides arnset cash flow along with a greater liquidity. Other modes of investments dornhave their own pros and cons, but by far investors love to buy rentalrnproperties as an alternated income stream.
Now, one thing that often confuses the investors andrnspecifically the newbies that they think investing into real estate is a sourcernof passive income, but that’s not true. It’s the most active source of incomernand the investor has to stay in the circle to keep it flowing smoothly.
We have dedicated todays’ post to guide all the newbiesrnabout the best ways to invest into the real estate rental properties. Gornthrough the lines to know more about the most used and trusted ways ofrninvesting into rental properties. So without further ado, let’s jump into ourrnmain topic.
Buy, Rehab, Rent, Refinance, Repeat (BRRRR)rnrn
This is one of the tested methods in buying and rentingrnrental properties. In this method an investor buys and abandoned property,rnrehabilitates it, and then rents it. After some time the landlord takes out therncash for refinancing and the circuit goes on this way.
This method is trusted the most due to the fact that thisrnprovides a steady cash flow to the investors, has great liquidity and also inrnno time you get a property worth a good amount for you which pays you well onrnresale.
But one rule that you must follow is the 70% rule. It saysrnthat the amount required for upgrading or rehabilitating the property shouldrnnot exceed the 70% of its total cost. Keeping this in view you’ll not make anyrnloss.
Buy and Fliprnrn
This is another method for investing into the rentalrnproperty in which the investor buys a property, fixes it and then puts it onrnrent. This method is also tested and a good amount of people are busy in doingrnthis business for additional income stream.
Now, one thing that comes in mind is how it is differentrnfrom the BRRRR. The modes of investments are much alike, but the motives arerndifferent. In BRRRR you buy for the sake of upgrading the property and enjoy arnbigger chunk at the time of resale, while in Buy and Flip your only motive isrnto fix the property once and let it stay on rent for a longer period while yournremain there enjoying your rent.
Furnish an unfurnished apartmentrnrn
You might have heard the term serviced apartments, and yourncan imitate the same on your behalf. Usually students, officers, and jobrnholders come to a city and avoid all the chores that they have to do forrnfurnishing the apartment. Moreover, it requires quite a lot of money to furnishrnan apartment and no one is willing to spend this much money when they have tornstay on the property for not more than few months.
All this hustle is reduced by the investors when they buy anrnunfurnished apartment and furnish it to rent, against a good amount of moneyrnthey get.
Large houses for short periodsrnrn
People relocate to new areas for short terms for the sake ofrnsome major family event that has to take place. For an example they visit otherrncountries for marriages or family functions. You can earn from this in way thatrnyou rent a house, furnish it and then lend it to some family that’s in need.rnThis is a new kind of real estate rental business, and you believe us this isrnworking well for the investors.
This mode of business is for the tenants who occupy a largernaccommodation, but don’t have need for it. Like, students or working peoplernrent an apartment that has three bedrooms but they want only one. They can rentrnthe other two for sharing rent or earning profits.
People have rented large houses which they don’t even need.rnThey stay there for free; earn from it their living, and pay bills from thernrent they collect. This is also a very lucrative business but you must havernprior knowledge of conducting business and basic mathematics.
Have a paying guestsrnrn
This method is also known to many and people have been doingrnthis for many years now. Having a paying guest means that they stay at yourrnplace with or without food and pay you in return. This method can be used tornstart a business of shared accommodations. You just have to arrange space,rnmessing, laundry and other such services and start letting your space to peoplernwho need it. This is also a profitable business and investors have been into itrnfor years now.
Renting a commercial propertyrnrn
You can also buy a shop, or space in a mall or market, thenrnlater rent it for the sake of capital gains. This business comes handy if yourninvest in crowd-funded projects. You just not pay the whole amount at once,rnrather you buy a commercial space in 2-4 years period on installments and laterrnwhen the possession gets transferred to you, you rent it. This is also arnpopular method of doing rental business for ages.
Renting a portionrnrn
Last, but not the least, investors willing to becomernlandlords buy houses that are multi-storey, then rent a portion of it to gainrncapital returns. This kind of business is possible only in multi-storey buildingsrnor duplex, because you have to dedicate a special entrance for the tenant. And,rnalso this business only works in high-end societies and big cities. Like, ifrnone has bought a house in a famous housing society like
Renting portions have remained as a beneficial way ofrninvesting into rental properties for ages, and the method still exists in largerncities, where there is a huge hustle.