Generate Additional Real Estate Related Revenue Streams
By Paul Esajian on August 23, 2019
- Review Rental Expenses: There are many ways to create additional revenue streams that don’t include expanding your workload. The first thing you should do is look at your existing real estate portfolio, specifically your rental properties. When is the last time you examined your annual property expenses? If you are like most landlords you may give them a quick glance every lease, but rarely do you give it a deep dive. There is a good chance that you are leaving hundreds of dollars a month on the table. Between the utilities, property management, lawn care, snow removal, insurance and taxes there are several areas you may be overpaying. Renegotiating a few dollars less on all of them adds up to a pile of cash at the end of the month. A few hundred dollars a month equals thousands over the course of the year that can help your business in a variety of different ways.
- Private Money Lender: As you review your portfolio you should dig into every property you are holding. Talking out a home equity line of credit or a cash out refinance may not be on your radar today but can be a viable option. If you have equity, it is sitting in your property without doing much for you. You must at least run the numbers on opening a line of credit and see if it makes sense. The rates and repayment options on a HELOC are much different than a traditional loan. A traditional 30 year fixed may have a rate of 3.75%, where a HELOC is under 3 with an interest only option. With a line of credit, you may be able to use that to purchase other properties or lend to people you know and trust in the business. Earning say 13% on your money you are paying 3% on is good math. This scenario doesn’t work in every situation, but if you have equity and use it wisely it can be a great source of income.
- Real Estate License: If you are looking for more of a consistent part time income stream you may want to consider getting your real estate license. There are a handful of obstacles in getting licensed including fees, classes and a place to hold your license, but if you get past that you can earn consistently. Between rentals and commission on your personal transactions you can very easily make a thousand dollars or more every month. You can also expand your business to your friends and family and generate additional income as well. Of course, being a real estate agent is far from easy and requires a decent time commitment but is also a logical field for most investors. They take their knowledge of the industry and personal contacts and parlay that into extra income. Getting licensed not only can help with income but can open doors in the business you didn’t know existed.
- Property Management: Do you own rentals in a specific market? Are you handy and like dealing with tenants? Are you able to respond to an issue in a moments notice? If you check these boxes, you should explore property management. Property management is a role where you are always on call but aren’t working forty hours a week on the property. You may have two calls in a week and then not hear from your tenants in a month. For roughly 10% of the monthly rent received, this may be a great way to earn income in a market you are already at and tasks that you are comfortable doing.
- Partnerships: If you are stuck with ways to find new deals and generate income you should explore the possibility of a partnership. Right now, without realizing it there are several people in your circle who are actively looking to invest. They may have capital and lack knowledge or vice versa and would like to find a partner. You should reach out to everyone in your contact list, explain your involvement in real estate and ask if they would be willing to meet with you. From there see if you are a fit and if so, try to partner up. A partnership reduces your downside and gives you opportunities you otherwise would not have had.