It is an achievement for most real estate investors to get passive income from their speciality. Also, this could be easily achieved by understanding how to manage property the best way. It is important to note that property management has its own challenges that will require full discipline to adhere to the property management tips in this article. These tips can also be used by landlords looking for passive income from their property.
Managing property for the first time can be overwhelming especially when you have to perform different tasks. For those thinking of having property managers,they need to pay the property managers,either from their rental income or their pocket. Along the way, you may find this too much to handle. It is crucial to think about this before hiring a property manager. Your way of tackling challenges will determine your chances of getting more profit and being successful.
You need to know the type of tenants you want. A property that has been rented out for a month is called a short term rental while a property that has been rented out for more than one year is called a long term vacation rental.short term rentals are known as the preference to expensive hotels while long term rentals are convenient for stability with long term agreement and committed tenantS. Long term renting can create rental income profits with ease.
The following are the answers to getting passive income:
Know your property
How well do you know your home? Well, knowing your home is very important in property management. This will determine the rental income you can get from the property and also the demand for the property.
Location, size, number of bedrooms, interior design type, amenities, level of luxury etc are some of the most important things you should know about your home. Besides, you should examine the condition of the house and do the necessary repairs to avoid unpleasant situations when renting the house. you don’t want your tenant complaining on the first day of moving into the house.
It is advisable to research the value of your property on the market. You can also get help from a professional who will help you set the rental price for your property. This will prevent overpricing or underpricing the property. You can also make use of companies that provide home systems for home tracking and preventative maintenance.
If you plan to rent or sell your property, reinvesting in your property will be the key to making profits. This means that you will be using part of the income you get from the home to maintain and upgrade it.
Reinvesting your income into the property can increase the investment value of the property annually. The local tax assessment company which is responsible for setting the actual market value for your property may increase the value of your investment if they note a 3 to 5 per cent upgrade in your property per year. This is the key to increasing your profits.
Short term rental through Airbnb Kenya
This is one of the fastest ways to make passive income in real estate investment. It will boost your positive cash flow within a short period. Airbnb Kenya is an online platform that allows people to connect and market their homes to people who are looking for hotels.
This type of investment needs a lot of skills and work to be successful. But this can be very easy by getting a professional property manager who will transform your property income. The property manager will be in charge of everything including setting rent level, marketing the property, getting new tenants, maintaining the property etc.(read more about the responsibilities of a property manager by clicking this link)
You need to note that the manager will need a salary at the end of the month. You need to come up with a way to get him the salary. You can get the money from the income of the property or pay from our pocket. This is why you need substantial capital.
Long term lease
Most people in the real estate industry find this as the best way to make money. Not only is it a passive income method but also a traditional rental strategy. Long term tenants offer additional value to the property owner by increasing accessibility to convenient financing e.g mortgage. This provides higher net cash flow hence higher profit.
Also, a long term lease permits a long term financing strategy meaning you can calculate the rental expenditure over the long term expected. Even if the rental review is carried out under a trade rent review, a long term lease still offers a chance for a long term plan that is not under the short term lease.
Real estate investment trust
Ever heard of this term before? Real estate investment trust is a company that sells its stock to interested investors. It owns and rents out real estate properties regardless of being commercial or residential properties. This is one of the best ways to get passive income as an investor with minimal risk.
Real estate investment trusts are also a way to gain exposure in the real estate industry with little money. They are a way of gaining secureness and diversity to your comprehensive investment portfolio.
This is also known as buy and hold in real estate. This is a long term investment in which an investor buys and holds a property in real estate,waiting for the value to gradually increase over a period of time. However, this is advisable if you have a flexible capital and the ability to pay a mortgage if you have one, without depending on the income from the property
Traditionally, position trading involved buying and renting the property for short term till the value of the property increased. This is the easiest way of making passive income though it might long.
Rent your additional rooms
If you have additional rooms in your house that are not in use, why not get a passive income by renting them our? This kind of passive income has many benefits. One of them is easy passive income.
Second, the fact that you are renting part of your home is an added advantage. How? When an investment is close to your home, it means that no extra work or personnel will be needed to manage the property for you. Requests and complaints will be forwarded to you directly. You will be managing your home.
Real estate is a good investment but you could end up losing many if you are not smart. Being smart is working with a professional real estate agent to get leads and getting a property manager to get more profit