Whether you have spare space in your current home or hold an additional property to your name, renting it can transform it into a source of passive income. This type of income doesn’t require you to put your blood, sweat, and tears into long work hours every single day, but it still adds sufficient funds to your household each month.
But if you have never rented your property before, even the thought of handing it over to someone else can fill your mind with dread. With that being said, understanding the ins and outs of the process and the ways you can protect your investment goes a long way toward your overall comfort.
To help you along the way, here are a few strategies to turn property ownership into passive income.
Choose Between Short-Term and Long-Term Rental Options
Renting out your property is one of the most popular side hustles. But before you can start reaping its rewards, consider whether you want to bring in long-term tenants or short-term renters. While the former gives you a consistent income, it can be a bit lower than running a vacation rental. On the other hand, the latter lets you generate higher rent per day, but you may have to contend with no revenue on empty bookings.
Decide If You Want to Put Up the Entire Property for Rent
It’s also important to decide whether to put up a portion of your property for rent or just a room or two. This decision is pretty easy to make when you have a separate property, but it can get a bit tricky when you want to rent a part of your primary residence. In either case, for long-term renters, you may want to perform a tenant credit check to avoid red flags.
Decorate Your Property to Justifiably Increase Your Rent
If you want to get the most out of your investment, you might want to put a bit more money into your property before you list it up. It’s because if your rental space is welcoming and aesthetically pleasing, it can make tenants actively want to live in it. While you can make some small changes yourself to improve your rental property, you may also hire someone from an interior designer platform to help you with this process.
Protect Your Legal Rights With Targeted Steps
When you welcome tenants to your property, you expose yourself to certain risks. Besides possible property damage, this also includes the chances of illegal possession of your property or the tenant’s refusal to steer clear of prohibited activities. This is where drawing up lease agreements can go a long way towards protecting your legal rights and saving you from possible trouble in the future. You can turn to an online legal service platform for this purpose.
Safeguard Your Finances With Insurance Policies
Besides providing you with healthcare coverage, insurance policies can help with unforeseen income losses. With that, they can also help you cover expenses in situations where tenants damage your property. You can find landlord insurance from several providers, with their availability depending on your specific area. This helps you ensure that you don’t have to spend money out of your own pocket to repair any damage to your property that is left behind by tenants.
Considering Hiring a Property Manager
While listing your property online is the most popular way to find new tenants, some homeowners go beyond that norm to hire a property manager for their rental properties. With the benefits of hiring a property manager, you can sit back and relax while letting professionals take care of finding tenants, negotiating rent, and handling legal requirements. They can also manage complaints and repairs around the property, later on, to help you generate truly passive income.
With these strategies, you can turn property ownership into passive income without breaking a sweat. As long as you remain careful about the process, you can reap all the rewards and experience none of the drawbacks of renting in the long run.
