If you’re looking to make money, there are few greater ways to make money than by leveraging a property to create a cash generating asset that means you aren’t trading time for money by working in a traditional job, but leveraging a property asset to generate cash for you.
In this sense, there are two approaches, the first is to leverage your existing property to create an extra income that can top up your current finances. The second, is to look more into the realm of property development as an investment / career choice.
In this article, we’re going to look at both options, starting with how to make an extra top-up income from turning your existing property into a cash generating asset, yet if you are a more serious property developer you might want to check out this company and whizz down to the second part of this article.
PART I: MAKING AN ADDITIONAL INCOME FROM AN EXISTING PROPERTY
In this section, we’re going to look at ways to turn your existing home into a cash generating machine, and broadly speaking there is one main category all the options below fall into, which is that of renting out space within your property.
1. GET A LODGER
If you have a spare room, then getting a lodger can be a great way to make a consistent and reliable monthly income from your property. This provides a steady and more long-term income than the idea of renting it out via AirBnB which is more sporadic in nature, yet the amount you can charge is usually capped to the point you are unlikely to make a lot of money, it‘s more like something to help pay the bills.
A lot of people favour hosting an international student, as this way, they tend to pay for the whole academic year upfront and are often quite quiet in terms of studying at school then studying in their bedroom.
2. AIR BnB
AirBnB can be a much more profitable alternative to getting a full-time lodger, and a more flexible option if you don’t want to share your house with someone full-time. You can charge more per night, but of course, you won’t have the guarantee of regular income that is associated with having a lodger.
Therefore, it depends on what you are looking for – the reliability of consistent income, or the possibility of a lot more income albeit sporadic and not guaranteed.
Of course, if you live by a major airport, sports venue or concert venue, you could make a lot of money from AirBnB… a lot more than you would be able to make from renting a room out on a more permanent basis.
3. RENT OUT YOUR GARAGE
If you live in an area where storage space is expensive, or street parking spaces are far and few between, you could consider renting out your garage – either as storage space (a lot of money can be made in storage) or to keep a car safe.
4. RENT OUT YOUR DRIVEWAY
If you live in a busy town that is centrally located, or near a transport hub, you could consider renting out your driveway as a parking space during office hours. This is particularly suitable if you work office hours yourself. This way, you’re not having to have anyone inside your home; they simply park their car on your driveway, and that’s it.
5. RENT OUT STORAGE SPACE
In a similar vein to renting out your garage, if you have other space available to store belongings in a clean, dry and secure environment you’ll be surprised by how much money people are willing to spend to store their property; particularly if they live in a small space.
You could rent out storage space to commercial organisations (that are often required to keep paperwork for several years), as this tends to get a higher rate.
6. CONVERT OUTBUILDINGS INTO COMMERCIAL SPACE
Depending on planning permission and regulations you could convert your outbuildings into affordable start-up space. Essentially, providing an empty space for small companies to occupy. You could even furnish it with a few preloved desks and office chairs.
PART II: PROPERTY DEVELOPMENT
When it comes to being a property developer, there are many things to consider, from financing your purchases to the possibility of property exchange (in which case you’ll want to check out this company), though most property development can be split into two categories – either buying a property with a view to doing it up and selling it on (known as flipping) or buying a property with a view to renting it out.
We’ve all seen the shows on TV about property flipping, where we get to follow the journey of property investors picking up bargains at auction and flipping them a few months later after undertaking renovation work.
The key idea when it comes to flipping properties is to turn a house into a suitable home that is more appealing, as many people don’t want to have the hassle of undertaking repair work or redecorating – in particular, first time homeowners.
The way to make money, is pretty simple with this one, as you make revenue from the profit derived upon selling; after you’ve taken out your costs for the improvement works, further fees, and interest on any loan you may have required.
BUY TO LET
The most common alternative to flipping a property is to buy a property and rent it out; this could be a “bargain” that requires extensive development work, or it could be a house that’s ready to move into and just start renting out.
The key, here, is to buy in a good location where there is constant demand for rental properties. Ideally, amongst reliable tenants such as professionals, or students that often pay up front for the entire academic year; which is great for cash-flow purposes.
You make money from the difference between the rent received and mortgage payments on the property, plus, over time there is the hope that the property will appreciate.
In summary, there are plenty of ways to turn your property into a cash generating asset, either traditionally as a property developer or more innovatively as someone that makes the most of the asset that is their home.