Is Rental Income the Ultimate Side Hustle?
As more people look to take their financial freedom into their own hands the interest in rental income increases. A smart philosophy to follow when it comes to improving your financial security is to have multiple sources of income (to diversity), to protect yourself from sudden loses in income.
Rental income offers a great opportunity to add a regular income from tenants or holiday makers. Some investors can be seen to buy several houses to include in these rental portfolio, but there are lots of considerations before you jump in head first to this lucrative side hustle.
Is Rental Income the Ultimate Side Hustle?
Finding the right location
Location will play a significant part in the price and popularity of your rental property. Find the right location and you can expect to earn more. It’s good to know your target audience, some people target the student population, families or city commuters.
If your property is in a good location, in a busy city you’re likely to be inundated with renters. Before buying the property, it’s good to do your back ground research on how much rent you can actually charge.
For example if you look up the average rental prices in New York you’ll find that you can expect to earn over $3,000 for a 1-bedroom apartment. The majority (68%) of homes in NYC are rental properties too.
Finding the right home
The next consideration you should have is the property itself. Is the property safe? Is the property energy efficient? Are the good transport links nearby? These are all things that potential renters will likely want to know before moving it.
The more appealing the property is the less likely that your home will be empty in between rental agreements.
Finding the right tenants
Once you’ve invested in your property you’ll want to look after it, and you’ll want tenants that will look after it too. Bad tenants are a nightmare for your side hustle, they can cost you money in repairs., not pay you or pay you late, and even cause issues with the law.
It might be an idea to let an estate agent take care of finding tenants – they can also chase up payments and hold the tenants to account on any maintenance issues.
If you’re renting privately, you could also hold an interview process where you get to meet any potential tenants.
Home Rental or Holiday Rental?
Renting your property out as a holiday rental could also be another consideration, especially if your property is in a sought after tourist spot.
It’s worth working out the maths on how much you could earn if the property was a holiday home but make sure to include cleaning costs, empty nights and any additional insurance you might need.
Now that you know what to research it’s time to promote your property and move your tenants in. Make sure to check all your legal requirements as a landlord to ensure that you’re complying with local laws.