Large properties can be bliss, but they can also be a burden. Just repairing all the little things can cost you a lot of money, and sometimes, your dream house can feel like a bottomless hole. As a way of partially alleviating these costs, people look to cash in their property and generate extra revenues.
In many cases, generating revenue for a property begins with an investment; as the old adage goes, “You have to spend money to make money.” Fortunately, there are several ways to get the upfront cash you need to jumpstart your efforts, including refinancing, home equity line of credit, hard money lenders, and personal loans.
Whether you’re an investor or a homeowner, there are numerous things you can do with a property. Keep in mind that every approach on this list has its pros and cons. Some of them require lots of work, while others can affect your peace of mind. Anyway, in this article, we will go through 5 awesome ways to generate revenues from a property and maximize its innate potential.
1. Property flipping
Property flipping is a great way to make money if you have the building skills and money for investing. It is an easy and relatively safe method for generating revenues. Simply put, you would buy a house (the older, the better), fully restore it, and sell it.
This method is very lucrative if you have technical skills as you will be able to perform all the restoration work by yourself. In the end, paying for a handyman can be quite expensive.
However, property flipping isn’t a bulletproof method. People sometimes lose money on this endeavor. Generally speaking, you need to find the most dilapidated house or a property in a neighborhood and turn it into charming real estate. You will get much better results if the property is in a nice neighborhood, although this means you will have to invest more from the get-go.
There are several reasons why long-term rentals are a great method for making money from a property. When you sign a long-term contract, you can generate revenues for a year and even longer without having to think about getting new tenants. It is a stable income that you can always count on. As if that wasn’t enough, there is no loss of revenue when looking for new tenants.
Like everything else pertaining to real estate, it is all about location. Having an apartment in the center of the city or close to a university will yield much higher revenues. Also, apartments close to commercial centers tend to be in high demand. If you have an apartment in one of these areas, it is much easier to get new tenants even if you lose the previous ones.
3. Reverse mortgage
The reverse mortgage approach is great for the elderly and especially those who don’t have next of kin. Here, you get a reverse mortgage on a house and start receiving monthly payments for as long as you’re alive. This can optimize your retirement. The size of the payments will be proportionate to the property value. Most importantly, the financial institution will pay annuities as long as you’re alive.
So, if you don’t have a big pension, this is a great way to earn extra cash. Of course, you can always sell the property and start renting as an alternative to a reverse mortgage.
Given that this is a relatively new method, some people are very skeptical about it. However, a little bit of research can alleviate your doubts. We recommend that you do a few reverse mortgage reviews to get acquainted with the process.
Airbnb is an extremely popular method of earning money from a property. It is especially alluring to people who want to make higher revenues (compared to the regular leasing) and don’t mind working for it.
Of course, having an apartment in an urban area of the city is much more lucrative. You need to be in the center of the city or close to tourist attractions to make money off of it. However, even if you’re a bit farther from the hot spots, people will still rent from you as long as the price is a bit lower.
The only issue is that Airbnb requires a lot of work and will cause extensive damage to your furniture and apartment.
5. Quick sales
Of course, you can always make money on price fluctuations. This is perhaps the trickiest method and it requires a good economic and real estate knowledge. It is much better for professional realtors and people who have been in the business for a while in a specific market.
Quick sales are heavily affected by the current macroeconomic trends. They can be correlated to the stock market trends, currency fluctuation, but also governmental decisions.