3 Ways to Make Money From Your Residential Property Investment
Becoming successful in turning a newly-acquired residential property into a money-making venture is every investor’s goal. A house and lot is a great investment vehicle, but to own home and lot requires a substantial amount of investment. Typically, renting out this property is the usual route towards income generation. But there are also other ways to make money on top of this fixed monthly revenue generated from the lease of your house and lot.
Here are three distinct ways to make money from your residential real estate investment in the Philippines.
Long-term Residential Rental
One of the most common ways to make money off a residential property is through long-term residential rental. Such an arrangement makes the owner the landlord of the property and sets the rental rate for a tenant to pay regularly. Typically, there is a fixed period of lease, and deposit amount plus advance payment is required from the tenant as he or she begins renting the property. This unit can be a multi-bedroom house for families, a studio type dwelling for young professionals, or a boarding house for students.
Valuation and size of the property, available facilities, convenience, and demand for housing are often the barometers for this rental arrangement. Therefore, properties close to the business district or universities are often in high order and can charge higher rates.
Short-term Residential Rental
For owners of condo units, lodging houses or dwellings meant for renters who spend only from a few days to a few weeks, investing in a short-term residential rental may be more suitable. If your property sits close to tourist attractions, airports, beaches, or in the city, it can certainly attract short-term transient occupants. A popular version of this investment is Airbnb, which has become a popular choice for travelers.
One thing to note is that Airbnb is outlawed at individual cities, so residential units that operate using the same business model might be in breach of local laws.
If you’re an interior designer or architect, you may want to buy an old, run-down house and convert it into a high-value property after performing a redesign and makeover. An unattractive property-poor design or dilapidated features — is arguably one of the cheapest pieces of real estate property. And the investment to transform it into a modern, attractive house can yield many times over.
Engaging in this type of property investment may require more than just a seasoned architect or designer. One must also partner with a competent developer/contractor and supplier of excellent quality fixtures and construction supplies.