Do you have a house that has been vacant for some time? Are constantly worried about it? If that sounds like you, depending on your situation, you could sell it OR turn it into a money-making machine.
If you would like to sell it, you may list it through a realtor or sell it to an investor for quick cash. If you would like to turn it into a cash machine, we have listed down several options below on how to make it happen.
This blog post is for educational purposes only and does not serve as legal advice. Please enlist the help of an attorney for legal advice.
1. Student Housing:
If the property is in proximity to a college or university, you can rent to college students. Not only this removes the concern of vacancy, it also potentially increases the amount you collect on rent.
To increase the rents above the market offering, you could furnish the house, advertise it by room by room, and perhaps provide free WFI. If a four bedroom house rents for $1,000 normally, you could advertise it as $500 per room and make $2,000 a month. It could become the “cool” off-campus house that gets passed down year to year, securing positive cash flow for years to come.
Asking for a big security deposit is always a good idea to ensure tenants will pay on-time, and in case the tenants trash the place, it will help you recoup some costs of the damages.
2. Short Term Rental / Vacation Rental:
With the rise or short-term rental companies with as Airbnb, VRBO, we now live in the shared economy.
If the property is located in a prime location, close to an airport, or a vacation destination location, it can be a huge cash flowing opportunity. Vacation rentals are typically rented by the night or by the week. Over the course of a month, the total rental income can really add up. However, there would be several more expenses to pay such as utility water, electric, gas, cable TV, internet. If the property is not already furnished, consider budgeting for some nice furniture and household items.
Another huge bonus of a vacation rental is that evictions are not an issue. Your guests are on vacation and most will have to go home because they have jobs, lives, and responsibilities. You won’t have to force renters to leave.
3. Rent to Own:
Since many houses are not in a vacation destination or near a college, another great way to increase your income and reduce vacancy is by offering the house as a Rent to Own. First, you’re going to get an upfront non-refundable Option deposit. This is a payment you receive when your renters first move in a sign a lease with you. The first document is the lease agreement and the second document is an Option to purchase the property at the agreed upon price. Ideally, the option payment can be $8000 or more, but Yes you can settle for any amount the market is willing to pay.
Rent-to-Own tenant takes better care of the property because they assume they will own the property soon, and they treat it as their own property. It’s very common for the owner to require that the “Rent to Own” tenant does all maintenance on the house.
Tax refund season is also a huge time of year for rent to own. We also help our customers in turning their rental properties in Rent to Own Properties. If you want to turn your vacant home into a rent to own or you are seeking for one, please give us a call at 832.295.6455.
4. Owner Finance
If you would like to completely be Handoff, and just collect a monthly payment out of the house, you could be the bank and sell the house to a reputable investor. Basically, you will finance them the house, collect monthly payment with interest, and the investor will be responsible for paying taxes and insurance and doing maintenance on the property. Investors are generally looking to build their portfolio, and use minimal cash. They may offer you your asking price if you decide to go this route, and this creates a win-win situation for all parties involved.
4. Before You Turn Your Home Property Into an Income Property
There are two important points to consider before you decide what route to pursue. The first is an insurance risk. If you are using the property in ways not specified on your insurance policy, your insurance may (and likely will) be invalidated in the case of a fire, flood or another catastrophe. However, you decide to use your property you must acquire the proper insurance coverage for the use of the property.
The second is to make sure that you are not taking on more than you can handle. Renovations and repair on the property can be physically tiring as well as expensive.
But if you’ve thought carefully about both of these things, start making money out of your cash cow now.
5. How can we help?
We can help you turn your vacant house into making money machine. For more information please call me on 832.295.6455 or visit our page to see how we can help you with that.