Being a real estate investor is a superb way to make money. With the diverse methods to invest in real estate, there’s bound to be a method that best suits you. And that’s not all, the majority of these ways are very lucrative when done properly.
You may be very satisfied with your rental income, but what if you could make just a bit more money? To answer this question, we’ve compiled some ways to make extra money in real estate:
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Add New Amenities
As a landlord, one of the easiest ways to make extra money from your rental property is to add new amenities. Not only will this idea make your wallet happy in the long run, but it will also keep your tenants satisfied. Before you consider what new amenity to add, ask your tenants for their recommendations.
The new amenities that you have do not have to go overboard. You could add something simple, like a toaster or Wi-Fi, and that would be enough. When you add a new amenity, you can justifiably raise your rent. This increase is nothing drastic, especially if the amenity is simple. Tenants will most likely welcome this slight increase if the amenity fills their needs. The uptick may not seem too significant, but in the long-term it will make a huge difference.
Related: 5 Must-Have Features of an Income Property
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Install Coin-Operated Machines
This point adds on to the previous one, except that it deals with a specific type of amenity. Having coin-operated machines, like vending machines and laundry machines, is among the best ways to make extra money as a landlord. This idea will work best in multifamily homes and apartment complexes.
Having a vending machine might seem not too important, but the potential returns of having one say otherwise. This is especially true if the tenants have children. Also, tenants will likely appreciate staying in your rental property more, since they won’t need to run to the store for a snack.
Laundry machines are not really seen as an amenity, they are more of a necessity. In fact, for most rental properties, like single-family homes, tenants won’t even consider renting if laundry facilities are absent. Larger washing and drying machines, however, can be an amenity. Consider having larger machines in a shared area and smaller machines in the units themselves.
Having coin-operated machines is definitely one of the easiest and secure ways to make extra money from an investment property. If you do opt for this method, make sure there is a change machine present. You don’t want tenants to go elsewhere to get quarters.
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Provide Services
Not only can you add amenities to make extra rental income, but you could also provide tenants with services. A clear example is a cleaning service. Some tenants, like college students and senior citizens, will likely approve of the idea.
Other services you can provide will depend on the type of investment property you have. For instance, tenants living in a single-family home or townhouse with a garden would not mind paying for a landscaping service.
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Lease Fees
Implementing fees in the lease is also among the ways to make extra money as a landlord. These fees could serve two purposes: allowing tenants to do something risky and penalizing them.
When it comes to allowing something risky, we’re pretty much referring to pets. While a pet like a poodle may not be risky, having a tenant’s python escape the tenant’s unit may not sit well with neighboring tenants. A lot of investors ban pets in their rentals. However, if you want to attract more tenants, and make more money, consider allowing pets with a pet fee.
Another way to incorporate lease fees, seemingly from the devil’s list of ways to make extra money, is to charge fees to penalize tenants. This might seem like a mean thing to do, but most real estate investors do it to some degree. Sometimes these fees are even necessary.
Dealing with unpaid rent illustrates this perfectly. When tenants have not paid rent, you charge them an additional fee for the late rent. This is only possible if this was agreed on in the lease. Also, be aware of your location’s laws concerning how much can be charged in the late fee.
Related: Your Tenant Not Paying Rent? What Can You Do?
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Parking Space
Parking space is a top priority for many tenants, especially those living in the city. This is also an opportunity that real estate investors should capitalize on. As one of the ways to make extra money in real estate investing, consider charging tenants for designated parking spaces. If your investment properties are single-family homes, consider adding a driveway.
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Rent Out a Part of Your Property
One of the best ways to make extra money in real estate investing is to rent out a small part of your house. This option isn’t limited to real estate investors, homeowners can take part in this too.
If you are a homeowner, consider renting out a room to someone who is interested. Most of the time, people will be interested in renting a garage. If you do not use yours, why not rent it out and make some rental income out of it?
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Get Involved with REITs and Crowdfunding
Here are two more ways to make extra money in real estate: REITs and crowdfunding. Both options eliminate the need to be a landlord.
A REIT, or Real Estate Investment Trust, is a company that invests in different types of real estate. This may include rental properties or commercial income properties like shopping centers, skyscrapers, and office buildings. REITs are required by law to distribute at least 90% of its profits back to the investors. At least 90%. And if the REIT makes a lot of money, as most do, an investor will receive high yields.
Real estate crowdfunding has been trending with the rise of the Internet. By investing in crowdfunding, an investor becomes a shareholder in a company. And just like REITs, the investor will receive high yields if a property does well.
Related: 4 Real Estate Investment Trends That Have Changed Throughout the Years
There are more ways to make extra money. One of them is to become a real estate investor, which you can do by searching for an investment property through Mashvisor!