Making a Profit from Property Ownership
Whether you already own or are thinking about purchasing property as an investment, there are several great ways to maximize both your time and money…
Originally published at millennialmoderator.com
Purchasing a single family home, a condominium (shared), or even an entire apartment complex are all great financial investments for a number of reasons. Here’s the low down- properties will always be needed for both residential and commercial purposes, there’s just no escaping that fact. Once you get in on the market, you then have immense money-making opportunities.
The toughest part of getting into the property ownership game is, of course, buying that first property. I personally started the home buyers process back in late 2018 and am just now (March 2019) getting around to finalizing the deal. If you’re a first time home buyer, here are a few fundamental tips I learned along the way.
Now let’s look at a few strategies to making a profit from property ownership and management.
If you’re in your 20s-30s, it’s very likely that you’re currently a tenant in an apartment or condo, paying rent to a landlord who owns the property you live in. Having tenants is the most common way to make money from your property, but of course, there are a ton of variables that have to be considered- how long will tenant leases be? Who will draw up the leases? Who will manage the properties in the case of maintenance needs? How will payments be processed? If it’s a condominium- how will HOAs be administered? You’ll need to crunch some numbers to make sure that your tenant revenue exceeds your monthly mortgage/HOA/insurance/etc.
There are obviously a lot of moving pieces to having tenants, which is why a good property management system is a necessity. Propertyments.com is an incredibly simple and powerful tool for managing properties- one that I personally recommend. In addition to automated rent collection, lease document generation, and offering a tenant portal, propertyments also offers a free plan for your first property! You can read all about their services and sign up on their website here.
The term transient may sound negative, but it refers to the short term leasing of a property. Airbnb is a prime example of transient housing, where strangers can apply and live in your home for as little as one night. Note that if your property is shared and has an HOA, there is a high chance they won’t allow transient housing due to security concerns- neighbors don’t want strangers walking around their property! If you have a single family home or town-home, then you should be (in most cases) all good to run a transient housing operation.
This is a great option for someone who travels frequently and is something I am in the process of setting up for myself. Make sure to deep dive into the HOA docs and look for “rental cap” mentions to see if transient housing is allowed at your property!
Like the stock market, the property market also goes up and down, based on a variety of changes both in the local and state/federal economies, which means an opportunity to buy low and sell high. Buying a property in a developing area is almost always a great five-ten year investment plan because as more people move into the area for work, school, etc, there will be more demand for property which will increase the cost of homes.
Flipping homes means not getting too comfortable, which is why this option typically works best for someone who already has an established home and is working on building their fortune. With flipping property, you still have the ability to make money from tenants while the property itself appreciates, which is yet another reason to look into property management software!
Regardless of the financial model you choose, there is always going to be an opportunity to make a profit from property ownership. Take the time to research the options that work best for you and start chipping away at the prize. My property ownership career is just starting, and I’m excited for the future.
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Tagged in: LifeFinance
Originally published at millennialmoderator.com.
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