Multiple Streams of Income
Now learn how to create Multiple Streams of Income in Real Estate and turn your investing business into a financial success.
By: Dennis J. Henson
There are many great benefits from investing in real estate. Not the least of which is the opportunity to develop multiple streams of income from your real estate business. Having money coming to you from many different sources will not only give stability to your real estate business but is also a great way to generate cash flow which is the life blood of your business
Other than the normal income from sales of homes and monthly rental income, there are many other streams of income that can be generated by owning and managing properties. Here is a list of just a few possibilities for multiple streams of income from real estate.
- Late Fees
- Rent Increases
- Additional Rent
- Loans Against Equity
- Deposits and Maintenance Fees
- Mineral Rights Sales and Leases
- Finder’s Fees
- Consignment Fees
- Consultation Fees
- Coaching Fees
- Tax Rebates and Certificates
Let’s take a closer look at some of these multiple streams of income. Notes are a great way to set up additional income streams. When you sell a property you can usually get a much higher price if you are willing to finance part of the sale. By simply taking a note secured by the property you have your first small stream. Well it may seem more like a drop but for now we can call it a stream. Adding interest to the note will increase the income and give you a fair return on the money you are owed. Each note you add is another small income source.
Another great way to increase your income is by selling options to purchase your properties that include lease or rental payments. Option money is usually non-refundable and if you do lots of options you have another stream of money coming in.
It is unfortunate but when you manage renters—they are often late with their rent payments. Some landlords just let late fees slide and do not attempt to collect them. This is a big mistake. By being strong and charging what the contract spells out you win in many ways. The renter will either start paying on time or have to pay the late fees. Of course they just may decide to leave altogether and you also win because then you can get a better tenant. In any event if you stick to your guns and charge late fees like a real business you will find that you have created yet another stream of income.
At the end of every lease period you have the opportunity to generate more income by simply making small increases in the amount of rent due each month. This may seem trivial but if you have just ten single-family homes and increase the rent on each of them by just fifteen dollars per month you have an additional $1,800.00 a year coming in each and every year. If you continue to do this for five years that $1,800.00 will have grown to a whopping $9,000.00 and that is a nice stream.
If you have a large lot or even two lots, many times there are opportunities to rent out some of that space to be used for other things. An example might be parking or a storage building. Use your imagination and create another stream of income.
One of my favorite income streams comes from borrowing money from the equity from my existing properties. This income is tax free and can be a life saver at tax time or when your spouse wants that trip to Europe for your anniversary.
Deposits on rented property belong to the renter but when a renter leaves a property in poor condition the money to bring the property back up to good condition must come from somewhere. I prefer to use the renter’s money to do this fix up so I collect a substantial security deposit. Often renters will just leave the property without notice or without completing their lease agreement. When this happens, if your agreement is written well, you get to keep the deposit. It is not unusual for this scenario to take place several times a year and yet another stream is introduced.
With the price of petroleum products at an all time high—the mineral rights you have in you property might be worth a great deal. These rights are very marketable and petroleum companies are becoming very aggressive. These companies have a lot of money and might be willing to pay you some of it to lease or purchase your mineral rights. Leasing your mineral rights can create a healthy stream of income for you especially if oil or gas is discovered on your property.
The real estate investing business offers quite a few possibilities for income streams by charging fees. These fees could be for consignment of a contract or for consultation on a real estate project. You could charge fees for coaching new investors in how to get started or even for helping them find their first deal.
Finally there are a great number of tax advantages for the real estate investor and if you play your cards right you could be able to have the government provide you with an additional stream or two of income. By purchasing tax certificates you should be able to realize some exceptional returns from your investments and if you are lucky you could end up owning one or more additional properties.
I hope this article, Multiple Streams of Income will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my website at www.dennisjhenson.com. Also on that site, you may sign up for free reports, articles, and e-books and find free forms, documents, MP3 downloads and much more. Also visit www.turbo-bidder.com for a great real estate investing tool.
Learn other secrets of success like this: Multiple Streams of Income.