Five strategies to help you make money from property
In the new career climate of multi-hyphenates and entrepreneurs, many are looking for creative new ways to supplement their income.
The idea that the real estate market is a lucrative and secure investment (with some notable exceptions!) is as old as the hills.
If you’re lucky to be in a position where you have the money for a deposit or own a house or flat in these unstable times, there are myriad options for turning your assets into serious money spinners. Even if your situation isn’t that strong, there are still options.
It’s notoriously difficult to get on the property ladder – especially in the capital – but property isn’t just the proviso of the very rich. Take a look at these five ideas for how you can make cash from property, even if you’re not on the ladder yet.
1) Invest in real estate – even if you only have a little (or no) starter money
While it may seem like an impossible feat to buy a property when you don’t have the cash, there are actually certain ways you can get around the initial hurdle of a low budget.
Consider a peer-to-peer lending network, where lenders’ money is divided between many borrowers as multiple small loans. You can also trade fixed assets, get involved with the UK government’s Help to Buy scheme, bring in a partner to invest or simply take out a hard cash bank loan.
The idea of borrowing at first needs to come with a ‘speculate to accumulate’ outlook and can seem intimidating, but if you’ve got the guts the payoff can be well worth the initial uncertainty.
2) Rent out a residential property long-term
One of the best ways to make money in the property world is to buy a house or flat with the aim of renting it out to tenants. You may plan to renovate the place yourself or work with an estate agency.
Your best bet is to keep in mind the three magic words: location, location, location. Shake away the inescapable spectre of Kirsty Allsop as quick as you can and get hunting for a property in a fantastic spot; either in a beautiful setting, near good schools or a convenient distance from shops and amenities (preferably all three).
3) Lease a property with a view to buying
If you’re not in a financial position to buy you may consider leasing a property instead. Leasing is a superb option if you’re not ready to invest huge sums of capital right at the start, and can even work for those without an immaculate credit rating.
The best time to lease a property is when the market is beginning to climb, because if the market growth is strong enough, you may ultimately be able to purchase the house or flat with a more affordable overall price tag.
4) Renovate a ‘fixer-upper’ in a lovely area
If you’re that way inclined, doing up a house, cottage or flat can be one of the most enjoyable ways to make a considerable profit on a property. Experts recommend investing in an unappealing space in a desirable location, so you know once you’re finished with the fixtures and fittings your project will be – quite literally – hot property.
Form a positive relationship with a contractor and take a careful look at the property before you buy (snapping up a place unseen at auction could end in disaster).
Equally, make sure the renovations you plan are realistic and doable within your means – a fresh lick of paint and beautifully sanded wooden floors are one thing, rebuilding walls and staircases are quite another.
5) Consider holiday rentals for less commitment
If the suggestions above seem a little daunting, one way to turn a property into an income source is simply to rent it out to holidaymakers and shorter-term guests.
To truly make this into a cost-effective project you’ll need to create a clean and welcoming space, offer a high standard of hosting and form positive relationships with guests, all of which could end up as a truly financially advantageous ‘side-hustle’.
It’s also less of a commitment than investing in a house or flat, means you can share the space and you may even make some lifelong connections too!
Photo by Valdemars Magone