Diversifying your income streams is crucial to long-term success if you’re an entrepreneur or business owner. And what better way to do that than by becoming a landlord?
The worldwide rental market is worth over a trillion dollars, making it an attractive option for every entrepreneur. As average prices of rent skyrocket due to the rising amount of homes, this can be one of the best decisions you’ll ever make.
Renting out property can be a great source of passive income, and it’s easier than you might think to get started. Here are five affordable ways to become a landlord now.
Buy a Fixer-Upper
One of the best ways to get into the landlord game is to buy a fixer-upper. Not only will you get a property at a discount, but you can also add value by renovating it and renting it out for more than your monthly mortgage payment. Just be sure to factor in the cost of renovations when budgeting for your purchase.
You purchase a fixer-upper by using the money you might have. However, conventional mortgages are one of the best ways to buy a fixer-upper. These mortgages come with various benefits, such as low-interest rates, low monthly payments, and the stability of a 30-year loan. It’ll also give you access to refinancing and home equity.
Refinancing
This is the process of taking out a new loan to pay off your current one. This can be a great way to get cash for renovations or to consolidate your debts. And home equity is the portion of your home’s value that you own outright. You can borrow against this equity, using it as collateral for a home equity loan or line of credit.
Home Equity
Once you’ve been a homeowner for a while, you’ll start to build up equity. This is the portion of your home’s value that you own outright. You can borrow against this equity, using it as collateral for a home equity loan or line of credit.
Rent Out a Room in Your House
If you don’t have the money to buy an investment property outright, consider renting a room in your house instead. You can use sites like Airbnb to find renters and set your own rates and schedule. However, this can be pretty dangerous. Here’s how you can assure your safety:
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Put Locks on Restricted Areas:
You should put locks on areas like your bedroom and bathroom to ensure the safety of your valuables.
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Get a Lockbox:
This will allow you to keep your cash and valuables safe while still providing easy access for guests.
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Set Ground Rules:
It’s important to set ground rules with your guests, so everyone is on the same page. This includes things like quiet hours and house rules.
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Get Insurance:
You should get insurance to protect yourself in case of any accidents or damage that may occur while guests stay with you.
If you want to start your career as a landlord in a very affordable way, then this is the best way to do it. You can easily cover your mortgage payments and even make a profit each month.
Lease a Property From Someone Else
If you don’t want the hassle of being a homeowner, you can lease a property from someone else. This option can be especially advantageous if you live in an area with high rent prices; by leasing, you can sublet at a higher rate and still come ahead financially. Just be sure to draft a watertight lease agreement so that you and the owner are legally protected.
Join a Co-housing Community
Co-housing communities are intentional living arrangements in which residents share common facilities and space but maintain private homes or apartments. This option is perfect for those who want the benefits of landlordship without having to deal with traditional tenants; as part of the community, residents typically help with upkeep and decision-making, making things easier for everyone involved.
Start a Houseshare Program
If you live in an area with high demand for housing but low available supply, start your houseshare program! This option allows you to screen tenants carefully and maintain control over who lives in your house; plus, it’s an innovative solution to an age-old problem, which means there’s potential for high demand (and high rents).
There are plenty of ways to become a landlord without breaking the bank—it just takes creativity and effort. But, by following these tips, you can quickly start earning passive income as a landlord—and secure your financial future. So what are you waiting for? It’s time to get started!
