Owning a property is a big financial outlay, and for many people that property will be a financial drain for years to come. However, owning a property also provides you with an opportunity to make money—sometimes even serious money!
This article will cover ways in which you can make your property work for you. From converting your loft or garage into a rental dwelling to using your garden as a business, there’s an idea here for every type of owner-occupier.
In order to maximize your property’s potential, you need to switch your mindset from “squatter” to “landlord.” It’s not always easy, as it can be difficult to let go of a family home and become a detached businessperson.
However, for many owners, a property is a long-term investment that will see you through many changes throughout your life, from buying your first home, to starting a family and building great memories, to moving on up in the world and down-sizing.
When it comes to making money from property, there are two main ways, as described below:
Passive income is the income of dreams—going through a process just once and then earning money continuously. This commonly refers to rental income from tenants who pay you a regular monthly sum. You don’t need to actively do anything other than maintain your property, which means passive income is almost like having your own automated savings account.
However, earning passive income isn’t as easy as it sounds. You may need to make a financial investment into the property to get it up to standard, and for this you may need to get a hard money loan to cover the renovations—but you are carrying the wonderful process of “speculate to accumulate.”
On the other hand, active income through property refers to activities such as renting out part of your home and/or creating a unique opportunity through either a wholesale or a retail space.
It’s active income in the true sense of the word, so if you’re the type who is motivated by making money without doing anything, then this is the route for you.
Active income can also help you with long-term financial planning and contribute to other financial goals.
There are many ways you can add value to your home without having to rent it out. Whether this is by converting a loft into a bedroom with an ensuite or a garage into a games room, the opportunity exists to turn these areas of your property into money-making opportunities.
If you have a plot of land you can use it as the basis for starting a business—either on a large scale or a small scale. Even just setting up an herb garden can earn you money—and in some cases, it can even help to make your property a healthier place to live.
If you have already purchased a property but you are struggling with the upkeep, instead of selling off the whole property altogether, you could make some passive income by selling off part of it to a partner. This is could either be: tenants in common, where the property has multiple owners, each with their own distinct share and joint tenancy; or joint tenancy, where each partner jointly owns the whole property.