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8 beneficial ways to invest in rental properties

8 beneficial ways to invest in rental properties

Date : 2023-01-17

8 beneficial ways to invest in\r\nrental properties

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Investing into real estate is a broad field and the spectrum\r\nhas many modes of investment that can make you money and earn great respect. It\r\nalso adds to the portfolio, so the next time you go for an investment you must\r\nbe ahead of many of your peers.

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In all these modes, investing into rental properties is\r\nconsidered as the best by many. This is due to the reason that it provides a\r\nset cash flow along with a greater liquidity. Other modes of investments do\r\nhave their own pros and cons, but by far investors love to buy rental\r\nproperties as an alternated income stream.

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Now, one thing that often confuses the investors and\r\nspecifically the newbies that they think investing into real estate is a source\r\nof passive income, but that’s not true. It’s the most active source of income\r\nand the investor has to stay in the circle to keep it flowing smoothly.

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We have dedicated todays’ post to guide all the newbies\r\nabout the best ways to invest into the real estate rental properties. Go\r\nthrough the lines to know more about the most used and trusted ways of\r\ninvesting into rental properties. So without further ado, let’s jump into our\r\nmain topic.

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Buy, Rehab, Rent, Refinance, Repeat (BRRRR)

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This is one of the tested methods in buying and renting\r\nrental properties. In this method an investor buys and abandoned property,\r\nrehabilitates it, and then rents it. After some time the landlord takes out the\r\ncash for refinancing and the circuit goes on this way.

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This method is trusted the most due to the fact that this\r\nprovides a steady cash flow to the investors, has great liquidity and also in\r\nno time you get a property worth a good amount for you which pays you well on\r\nresale.

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But one rule that you must follow is the 70% rule. It says\r\nthat the amount required for upgrading or rehabilitating the property should\r\nnot exceed the 70% of its total cost. Keeping this in view you’ll not make any\r\nloss.

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Buy and Flip

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This is another method for investing into the rental\r\nproperty in which the investor buys a property, fixes it and then puts it on\r\nrent. This method is also tested and a good amount of people are busy in doing\r\nthis business for additional income stream.

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Now, one thing that comes in mind is how it is different\r\nfrom the BRRRR. The modes of investments are much alike, but the motives are\r\ndifferent. In BRRRR you buy for the sake of upgrading the property and enjoy a\r\nbigger chunk at the time of resale, while in Buy and Flip your only motive is\r\nto fix the property once and let it stay on rent for a longer period while you\r\nremain there enjoying your rent.

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Furnish an unfurnished apartment

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You might have heard the term serviced apartments, and you\r\ncan imitate the same on your behalf. Usually students, officers, and job\r\nholders come to a city and avoid all the chores that they have to do for\r\nfurnishing the apartment. Moreover, it requires quite a lot of money to furnish\r\nan apartment and no one is willing to spend this much money when they have to\r\nstay on the property for not more than few months.

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All this hustle is reduced by the investors when they buy an\r\nunfurnished apartment and furnish it to rent, against a good amount of money\r\nthey get.

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Large houses for short periods

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People relocate to new areas for short terms for the sake of\r\nsome major family event that has to take place. For an example they visit other\r\ncountries for marriages or family functions. You can earn from this in way that\r\nyou rent a house, furnish it and then lend it to some family that’s in need.\r\nThis is a new kind of real estate rental business, and you believe us this is\r\nworking well for the investors.

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Partial renting

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This mode of business is for the tenants who occupy a large\r\naccommodation, but don’t have need for it. Like, students or working people\r\nrent an apartment that has three bedrooms but they want only one. They can rent\r\nthe other two for sharing rent or earning profits.

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People have rented large houses which they don’t even need.\r\nThey stay there for free; earn from it their living, and pay bills from the\r\nrent they collect. This is also a very lucrative business but you must have\r\nprior knowledge of conducting business and basic mathematics.

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Have a paying guests

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This method is also known to many and people have been doing\r\nthis for many years now. Having a paying guest means that they stay at your\r\nplace with or without food and pay you in return. This method can be used to\r\nstart a business of shared accommodations. You just have to arrange space,\r\nmessing, laundry and other such services and start letting your space to people\r\nwho need it. This is also a profitable business and investors have been into it\r\nfor years now.

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Renting a commercial property

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You can also buy a shop, or space in a mall or market, then\r\nlater rent it for the sake of capital gains. This business comes handy if you\r\ninvest in crowd-funded projects. You just not pay the whole amount at once,\r\nrather you buy a commercial space in 2-4 years period on installments and later\r\nwhen the possession gets transferred to you, you rent it. This is also a\r\npopular method of doing rental business for ages.

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Renting a portion

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Last, but not the least, investors willing to become\r\nlandlords buy houses that are multi-storey, then rent a portion of it to gain\r\ncapital returns. This kind of business is possible only in multi-storey buildings\r\nor duplex, because you have to dedicate a special entrance for the tenant. And,\r\nalso this business only works in high-end societies and big cities. Like, if\r\none has bought a house in a famous housing society like Blue World City, they may rent a portion on their terms\r\nas the demand there is much higher than the supply.

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Renting portions have remained as a beneficial way of\r\ninvesting into rental properties for ages, and the method still exists in large\r\ncities, where there is a huge hustle.

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