3 ways to earn passive income with other people’s property

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As a real estate investor, people often assume that I only make money with my own properties. Nothing could be further from the truth. Particularly if you are just starting out, one of the best ways to generate passive income is to use other people’s property. Here are three effective ways to do it.

1. Rent accommodation with services

A of the best ways to generate passive income with home ownership are assisted living. Serviced accommodation is where you take an apartment or house and rent it out for short stays. This will often involve the use of online platforms like AirBnB. Of course, you can do this with the assets you own, but you can also do it with the assets of other people.

The way it works is simple. You rent a property at a fixed rent from an owner, then rent it out on booking sites. The landlord gets a long-term guaranteed rent from you and doesn’t have to worry about maintaining the property because you take care of it. You rent the property for short stays, which generate more income than a long-term tenant, and keep the difference. Win-win.

It’s perfectly legal as long as you’re using the right contracts. This cannot be done as part of a standard rental agreement, but you can use a management agreement or a corporate rental agreement (with the appropriate modifications).

Related: 5 Habits That Made Me A Millionaire At 25

2. Rent from HMO

This is very similar to the last method, but instead of renting the property for short rentals, you will take a property and rent it by the room. For this strategy, you will need to find a landlord who rents an operating rental property that you can convert to a multiple occupancy (HMO) home. You may also find a landlord with an HMO who wants to take a step back from the management of the property and is happy to have you assume it for a fixed rent. Make an agreement where you take the property for a number of years and pay the landlord a guaranteed rent.

One trick to finding good properties that you can turn into an HMO is to look for properties with multiple reception rooms that can be turned into bedrooms. You can then pay the market rent (or even a little less) to the landlord as a one-time rental and make a profit once it’s rented as an HMO.

Again, you will need to get the owner’s permission to do all of this and will need the appropriate legal agreements in place.

Related: Cryptocurrency Millionaires Are Diversifying Into Real Estate. You should be too.

3. Search for offers

It’s a little less passive option, but still a great way to move towards income independence. Real estate investors often lack the time to find and negotiate deals. This is why many turn to professional business sources. As a bidder, you will find sellers who want their property to get out of their hands quickly and negotiate a below market value deal with them. You will also find rental offers at HMO and rental in serviced accommodation. Once these transactions are completed, you can sell them to investors for a fee.

If you can find one offer per month that you can sell for £ 3,000 or two offers that you can sell for £ 1,500 each, you may be able to quit your current job (depending on your salary).

There is regulation in this industry, and you will need to get the correct registrations before you can sell directly to investors. However, you can team up with a fully compliant offer provider and deliver offers to them before you even register yourself.

Related: 3 Things to Consider Before Buying Investment Property

A word of warning

Before doing this, make sure you get the right training. Without the right tools, you won’t be able to use these strategies properly. It’s also worth noting that none of these ideas are completely passive, but you can systematize them all over time.

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