As we have discussed before, real estate is a great option for passive income. It’s a great investment regardless of whether passivity is your focus or not. It fights inflation, allows you to leverage your money, and allows someone else pay off your mortgage. Beyond that, it is no stranger to passive income.
Regardless of what people may think, real estate can be passive. The trick is to find a property manager or someone who loves the day-to-day parts of real estate management so that you can focus on the important aspects: finding a property, building up equity, and so on. While a property manager will help you free up your time, it is not going to come cheap. In fact, depending on your property, it may mean the difference between a positive cash flow and a negative one. If you are a passive real estate investor, you may be looking for easy ways to lower your expenses and increase your revenue in order to increase your cash flow.
Ways to Generate More Money from Real Estate
Lower Mortgage Rate
One of the easiest ways to lower your expenses is to shop around for a better mortgage. Depending on your equity, cash flow, and other important factors, you could qualify for a lower rate. Since the rates have stayed low for so long, it wouldn’t surprise me if they stay low for a few more years. There are many lenders out there, like NPBS home loans at http://www.newcastlepermanent.com.au/.
Increase Rent A Little Each Year. Make sure to do your homework, read the fine print, and ask all the questions that you need to, but don’t be afraid to look for a lower interest rate in order to reduce your mandatory expenses.
Many landlords are afraid of losing their quality tenants so they don’t even bother raising the rent until they switch tenants. It isn’t easy, but if you want to make a profit, increase rent a little bit each year. It may not seem like much, but a $10-$50 increase in the monthly rent each year can expedite how fast you pay off your mortgage.
The last, and probably most time-consuming way to increase your revenue is to renovate your rental property. There are many ways to improve a property in the eyes of a tenant without spending a lot of money, but it may mean taking up more of your time. If you are not willing to spend a lot of time, do the math and figure out if it is financially worth it to renovate the property. The benefit of making renovations can be to change your property from an average apartment or home to a luxury apartment or home. Not only can you increase rent prices, but you can attract a better population of renters.
Managing real estate while also focusing on minimizing your time investment is a difficult balance – but not impossible. Think about ways you can increase revenue so that you can afford to pay someone to handle the day-to-day management of the property.