People mostly look for ways to make money where no risks are involved. Owning a house is a big investment, and sometimes people are not ready for it! Then there is the added bit of furnishing it, paying taxes, and finding tenants. In fact, the constant worry of maintaining the house always takes away the joy of owning it. However, real estate investors have come up with a pretty simple idea that can fetch them a lot of money by phasing out their plans.
So how do they fill their pockets from real estate industry and its properties without owning them? Let's look at some ways.
Profit from Real Estate without Owning a Property
Sub Renting Part or Whole House
Tenants in some countries can sublet their rented apartments to other people who aren't directly contacting the landlord. While it is an arrangement where the tenant can sublet rooms or the entire apartment to another party, it depends on the tenant's intention. If he is away for work or vacation, it could be a temporary let out else a long-term thing. In any way, the person subletting it is profitable as he can charge rent on par with the market rates. He can then keep all the extra money, paying only his share of rent to the landlord. All of this has been picking up since the real estate startup has become a thing.
Be the Broker
When a landlord cannot manage his property for some reason or has no means to pay mortgage or repair parts of the house, he looks for an easy buyer. You can chip in and become the broker to find someone who accepts the property as it is. You will charge a commission. If the landlord is in no position to sell it, you can choose to take charge of the units at an agreed price per month, maintain and rent it according to market standards. It is a type of master lease that will get you the difference in rent and maintenance expenses. Moreover, the taxes, insurance, and mortgage will still be the owner's responsibility.
Real Estate Investment Trust (REIT)
If you want to pool in money for a property without owning it, REIT is one of the legit options. Companies trade income-generating properties(individual or commercial) privately or in a stock market to raise funds for developing the property. When they receive it, they maintain the property, lease it and distribute dividends when the property earns a decent income.
If you are a service provider that includes the following services in line with the property:
Financial Advice on how to make the property earn income.
Insurance Brokering on the property.
Home Staging/Styling for resale etc
can fetch you income off the property without actually owning it. Also, you can make more income with this in smart cities.
Almost similar to the REIT, you can pool in your money on properties you find prospective. Like-minded investors will join hands with you, and together you will share the income from the property. Since the investment here is more direct in Real Estate Crowdfunding, it gives you the option to chalk out better profits with various small and large projects. DomaCom is an excellent example of a fractional investment platform.
Be a Lender
Often, buyers search for an informal lender because of the formalities in a bank loan and the time to get one. You can be that lender and get a premium for the amount you lend. In case the loan turns out to be wrong, you can always seize the property. However, always research your borrower for a long-term relationship.
The concept is as simple as a babysitter. Many owners list their properties on Airbnb and go on tours. The property is vacant mainly at this time. You can take charge of the house when the owner is away during the listing period. The benefits you get: you live rent-free for that period while also getting a share per the number of Airbnb bookings.
It involves planning how to increase house property income and help its owner register on various websites like Airbnb or Tripping.com to help them earn decent regular income through rent on their vacant properties. For that, you need to do a market check, a location check, and a price check of the property in the selected area. You earn your commission for helping owners and the lodging sites too.
We understand from the above points that it is not a difficult task to make some good money from real estate without owning it. Although, you have to keep your eyes open all the time and look out for prospective tenants in the online lodging sites. Not only that, a good network of real estate owners is an added benefit. Ensure that you research well on the norms of subletting at your location since rules are different everywhere. Knowing your game and Innovative investment is the key!
We, at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.