As you get older, it becomes clear that to really secure your future and live comfortably, one job might not be enough. Those with real financial smarts look for other ways to find income. A second-job is one of the most time and energy inefficient ways of doing it however and just isn’t healthy for most people. Could property be the answer you’ve been looking for, instead?
Becoming Mr. (Or Mrs.) Landlord
By far the most common thought when it comes using real estate as a source of income is to buy-to-let a property. It’s an industry as old as time and with more people turning to rental properties rather than buying homes straight-up, it’s a growing field with opportunities still out there for the taking. However, how profitable it is depends on how hands-on you are willing to be with it. You have responsibilities as a landlord that have to be fulfilled somehow. You can take care of maintenance, repair, advertising, and finding tenants yourself at little cost. Or you can choose to partner up with an agency that can do much of the heavy lifting for you. If you go down the latter route, make sure you get a thorough idea of how the agency works, not just in advertising, but the quality of tradesmen they use for repairs and so on.
In the biz
You don’t have to rent out to private individuals, either. Depending on where you are and the increase in new business, you could make more money per square foot by renting out space to business owners, as well. There’s a new industry growing around this as well. If you’re willing to run the building like a business and be thoroughly involved in its upkeep, you could run your own co-working space. Many freelancers and small teams that can’t afford their own property will instead come together to share a single working space. As a property owner, it offers you a broader market to target instead of relying on one income source.
Life’s a beach
The final rental property we’re going to look at is the idea of buying a vacation home. Vacation homes are significantly higher value than most other kinds of property. In time, its worth will likely increase so you can always rely on the fact that you can sell it even if it isn’t making much of a return through rentals. As popular as vacation homes can be, after all, they are largely dependent on the calendar. Most will not make even a fraction of what they earn when it’s “in season” for tourism in that particular location. Then again, there is the added perk of owning your own vacation home to use as you like.
Good soil from growing
It’s not the most traditional option nowadays, but once upon a time land was most valuable because of the income that could be made from farming. There are still plenty of teams like Ranch Marketing Associates, LLC selling high-quality ranches that could end up being a valuable enterprise in their own right. There are more ways to make money from a ranch than by raising livestock or planting crops, however. You can run businesses on the side such as using it a tourist destination, using it to care for horses or rent them out for rides. If the land is picturesque, then that’s plenty of profit potential there alone. Don’t underestimate the value of good rural land.
Land with value
In general, don’t underestimate the value of land itself. When people think of real estate, they think of buildings, but sometimes the land can be significantly more valuable. If you’re able to get your hands on a large portion of land in the right place, it could be one of the most passive, hands-off forms of income you might ever find. As BWAB says, your mineral rights alone could make you a lot of money from oil and gas companies. Then there are other ways your land might be valuable such as logging offers if you own woodland or selling it to a real estate developer down the line. Of course, it’s not a good idea to buy land based on the speculation it might one day be valuable. It’s better to choose land that already has value, such as a ranch, with the knowledge that the volume of land might provide extra value down the line.
From flip to flip
Flipping houses is a high-risk, high-reward way to invest in real estate. It’s all about purchasing homes at well below market price, developing them, and selling them for a significant profit. Becoming a real estate developer takes a lot of work, so it’s not likely to be a side-gig or an extra source of income as opposed to a particularly lucrative main source of income when you get it right. But you have to know not only how to add value to a property or negotiate. You have to know the market with pinpoint precision, being able to tell which markets are up-and-coming and which potential buyers they best appeal to and how to target them.
Get those dividends
Most of the examples above demand that you think of real estate not like any other investment, but rather like an asset that you use as a tool to make money or that you improve before selling. However, another way of taking a hands-off, passive income approach to real estate is to use investment platforms like Realty Shares to join up with other investors and developers. Rather than being responsible for the property yourself, you use some knowledge of the market to choose the right investments, often providing capital to a developer, and hoping for a return. Some people see it as a riskier move to make yourself less responsible for the property, but it’s a good option for those who don’t want real estate to take up too much of their time.
There are a lot of ways to supplement or even get your base income from property. Renting might be the most commonly used option, but it’s not the only one. Real estate is a broad market, with plenty of opportunities for enterprising minds. Could it be the revenue stream you’ve been looking for? Could it be where you thrive?
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