Real estate is a tested means of investment. A good number of people who choose to invest in real estate do so for this purpose. With great deals from property developers and flexible financing options from banks, owning a condo is easy.
So, how exactly does one make money from buying a property? Earning from your condo unit sounds like pretty easy money, but one needs to determine which set up works best with his or her expectations. Before putting up an ad, make sure you have drawn up contracts and set up the necessary paperwork to protect yourself in deals that you will enter into.
Start earning through short-term rentalsWith hotel room rates going through the roof, you cannot blame why travelers seek out better deals. Residential condominiums are also now a great alternative to these pricey hotel room rates. Room service may not be available, but the savings are worth the trouble of ordering take out instead.
Personally advertise or sign up with reputable sites to match you with potential clients. You can set flexible rates on a daily, weekly, or monthly basis. This set up is best if you still want to get a chance to use your unit every now and then. This scheme is quite demanding in terms of time and effort though as you would need to evaluate each potential occupant and their activities, as well as need to do major cleaning in between bookings. On the upside, rates for short term deals are much higher than what a long term lease can give you so you can potentially earn double of what you would normally get compared to a regular annual lease.
Maximize earnings through long-term leasesFor someone who has a regular job or a full-time business that takes most of his time and rarely has time to tend to a unit more than once a month, it is more cost effective to find a long term lease taker. This would mean at least a one year contract. Some condo owners are fortunate to collect rent that is almost the same if not more than their monthly housing loan amortization. Imagine earning a little extra each month with a property under your name.
Finding interested parties can be as simple as posting ads on the “classifieds,” sending updates on social media, creating a blog or talking to an agent. The options are endless, and the potential for income is high.
Buy at the pre-selling price and sell when RFOThe cheapest deals are offered a few years before the anticipated turnover. If you can afford to spare some cash without the immediate expectation of returns, this may be a good option for you to earn from a condo unit.
By the time the construction is done and the property is turned over, you would be ready to pass it on to a buyer raring to move in. When opting for this, make sure you only deal with a reputable developer so you will not end up frustrated with delays, or worse, a dud. There are too many stories of people entrusting their hard earned money to a developer promising to complete a project within a couple of years, but end up getting less than their money’s worth, or worse, no property to turnover at all. Manage your expectations and always get to know the company you are investing in.
Improve your condo unit by fixing and flippingThere are different ways to curb the depreciation of properties overtime. One way to increase a unit’s asking price is by making smart improvements. As units are turned over bare, they stand to attract more buyers by providing extra perks such as installing extra shelves, dividers, and sprucing up the floors and walls.
If your budget permits, including furniture and basic equipment is a great idea, as you’d be surprised how people are more willing to pay extra just to save them the trouble of canvassing and shopping. Aside from making it look nice, ensure that major systems of the unit such as the electrical and plumbing systems are in good shape. And of course, if all these are done in a tastefully clever manner, you can absolutely command a good price.
A condominium does not have to stay a dead asset. Turn it into a real and rewarding investment by simply following any of the simple steps discussed above. Do you have any tips to add? Share it with us in the comments below!