There are many sides hustles out there for you to choose from, but among them, you will notice that some people find rental properties to be a great option above others.
Renting properties isn’t new, but quite the opposite since the idea has been around for far too long, and despite how old it is, it still works.
But what makes people choose it when there are other methods? The main reason lies in it being a passive income, and they can make money with rental rates that go up and down but usually incline for the first tendency.
Now, not many people know that it is easier to start renting properties than it seems. No, you don’t always have to use your own money or maybe never if this is what worries you the most and to clear every doubt and question you could have, this blog post will introduce you to this world and how to become an investor in this side hustle.
How Do Rental Properties Work?
Most people are familiar with real estate investment, but only when it is about buying a property to renovate it and then resale it. We have to admit that this is usually real estate at its best.
However, rental properties and the idea of this side hustle are included in this field. It can end up being more profitable and less exhausting when compared to the previous variation.
Real estate investors buy rental properties for the sake of renting them, as the term suggests. Instead of acquiring the property to renovate and improving its looks and functionality, this variation is about making it better but intending to rent it for passive income.
In the short term, you won’t notice a considerable revenue or income because you will be dealing with the property’s payment. However, when you are able to save money and start working around this continuous income without having to work hard to receive it, later on, you will notice why we consider it better than the usual real estate.
With the concept of renting the properties you acquire for this goal, you also have to address any repairs and issues in the property rented.
Yes, we just mentioned hard work isn’t required, and we stick to this statement considering that repairs or issues aren’t common. You only deal with them once in a while and based on the people to whom you’re renting the property.
Why handle repairs when you could hire someone for them? Because you will have to pay for the services. Your tenants will pay rent for the property, including the expenses for any issues that could occur.
Of course, if they damage the property in any possible way, they are usually bound to handle repairs themselves. Still, if it is something natural like walls filled with water or some problems with the ceiling, this has nothing to do with them. Thus, you have to handle them.
Just like other side hustles out there, rental property investing is risky, but with enough research and making sure that the properties you acquire are worth it, it can be very profitable.
What Is the Best About Rental Properties?
You don’t need talent.
Unlike other side hustles like selling online courses or teaching, you don’t need specific skills or talent to make money with it.
Since it is all about buying, remodeling, and renting, the side hustle’s concept remains simple, and you can just relax while receiving passive income the rest of the year.
Now, it is necessary to learn how to deal with repairs in the properties, but this can be solved quicker than it seems, or you can decide to spend a bit more from your income and hire experts as long as they get things done correctly.
In our opinion, it is good knowing how to deal with simple repairs, and without previous knowledge, we’re confident you will be capable of handling them.
However, for the rest, we find the option of relying on experts a better one. Yes, it involves spending money from your pocket, but it is worth it in the end when you look at the entire picture, or not?
That being said, you’re probably worried about what many people consider the worst in this side hustle: the money you have to spend.
Well, you would be surprised by knowing that not everything is terrible with this factor.
You don’t have to invest your money, savings, or capital in this side hustle if you don’t want to.
Banks and other lenders like private ones offer several financing options for real estate investors, whether they are interested in reselling a property or acquiring it to rent it.
Between the options of using your money or financing it, which one would we recommend? Probably both.
Using your own money is a good idea as long as you can afford it because this means you only have to look forward to the return of your money, and the rest will be entirely based on revenue.
However, when you finance the property, you have to deal with mortgages or loans and pay a percentage of the money you obtain for renting the property.
Despite this factor of financing the investment, we consider it the best. Why? Because the mortgage pays itself with the income, you get from the rent and the rest of the money left is pure revenue.
You don’t have to wait for ROI, and you get the chance to already have income without working too much.
Making Thousands or A Penny?
Throughout this article, we have mentioned that this side hustle is profitable, but is it?
We know you doubt it because regardless of the option you choose to invest in, you know it involves a lot of money and responsibility.
However, we are confident when we say that it is probably one of the best investments you can make in order to have passive income nowadays.
Your earnings will always depend on the property you have or acquired and how much it is worth after you decide to remodel or renovate it if it is even necessary.
The rent for an apartment with one or two rooms ranges from $750 to $1k or more in the USA.
Meanwhile, a house with two bedrooms and usually two bathrooms and the essential spaces costs around $1.300+ per month.
Let’s suppose you have a basic property that follows any of the previous descriptions.
You will be able to make at least $700 a month and all without having to go to a store every day, deliver food, or put a lot of effort into it.
Of course, the average rent varies depending on your location as well. New York and Los Angeles tend to be more expensive than other cities in the USA.
This also applies to other countries and if you’re in the city or countryside.
If we focus on other properties that go over the simple ones, like an apartment with three rooms and two bathrooms and medium size in square feet, you can easily earn over $2k per month.
A house with more rooms and spaces follows the same logic. Meanwhile, the specific location of the property in the city or town also matters.
We can tell you overall that you will be making at least over $600 every month, and we’re very inclined to say that $1.000 is a minimum. Just remember to exclude the percentage of the mortgage you have to pay or the ROI you’re getting.
When Can You Start?
You can start anytime if you’re able to apply for a loan right away or if you have the money to invest yourself.
Just make sure you research to find the correct location of the property in your city or town. Also, keep in mind rates from the banks or lenders you will be relying on if financing is the option you choose.
Overall, it is crucial to evaluate the situation and determine how good an investment it is for you.
Include looking for information about current rents and don’t be afraid of numbers; you will need to use them a lot from now on, starting with knowing how profitable the side hustle will be when taking the step and later.
Inform yourself with legal requirements and remember the obligations you will have when renting the property, or if there are a few ones you don’t want to deal with, make sure to include the details in the contract with your tenants.
Being a landlord is probably the part you have to consider the most since you don’t have to be made for it, but you need to know how to handle things diplomatically and guarantee that your tenants feel safe and comfortable.
When you go over all these details and extras you will find on your journey, you will be able to start with more confidence, but when it is about time, you can always buy properties any day.
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