8 beneficial ways to invest in rental properties

8 beneficial ways to invest in rental properties

Investing into real estate is a broad field and the spectrum has many modes of investment that can make you money and earn great respect. It also adds to the portfolio, so the next time you go for an investment you must be ahead of many of your peers.

In all these modes, investing into rental properties is considered as the best by many. This is due to the reason that it provides a set cash flow along with a greater liquidity. Other modes of investments do have their own pros and cons, but by far investors love to buy rental properties as an alternated income stream.

Now, one thing that often confuses the investors and specifically the newbies that they think investing into real estate is a source of passive income, but that’s not true. It’s the most active source of income and the investor has to stay in the circle to keep it flowing smoothly.

We have dedicated todays’ post to guide all the newbies about the best ways to invest into the real estate rental properties. Go through the lines to know more about the most used and trusted ways of investing into rental properties. So without further ado, let’s jump into our main topic.

Buy, Rehab, Rent, Refinance, Repeat (BRRRR)

This is one of the tested methods in buying and renting rental properties. In this method an investor buys and abandoned property, rehabilitates it, and then rents it. After some time the landlord takes out the cash for refinancing and the circuit goes on this way.

This method is trusted the most due to the fact that this provides a steady cash flow to the investors, has great liquidity and also in no time you get a property worth a good amount for you which pays you well on resale.

But one rule that you must follow is the 70% rule. It says that the amount required for upgrading or rehabilitating the property should not exceed the 70% of its total cost. Keeping this in view you’ll not make any loss.

Buy and Flip

This is another method for investing into the rental property in which the investor buys a property, fixes it and then puts it on rent. This method is also tested and a good amount of people are busy in doing this business for additional income stream.

Now, one thing that comes in mind is how it is different from the BRRRR. The modes of investments are much alike, but the motives are different. In BRRRR you buy for the sake of upgrading the property and enjoy a bigger chunk at the time of resale, while in Buy and Flip your only motive is to fix the property once and let it stay on rent for a longer period while you remain there enjoying your rent.

Furnish an unfurnished apartment

You might have heard the term serviced apartments, and you can imitate the same on your behalf. Usually students, officers, and job holders come to a city and avoid all the chores that they have to do for furnishing the apartment. Moreover, it requires quite a lot of money to furnish an apartment and no one is willing to spend this much money when they have to stay on the property for not more than few months.

All this hustle is reduced by the investors when they buy an unfurnished apartment and furnish it to rent, against a good amount of money they get.

Large houses for short periods

People relocate to new areas for short terms for the sake of some major family event that has to take place. For an example they visit other countries for marriages or family functions. You can earn from this in way that you rent a house, furnish it and then lend it to some family that’s in need. This is a new kind of real estate rental business, and you believe us this is working well for the investors.

Partial renting

This mode of business is for the tenants who occupy a large accommodation, but don’t have need for it. Like, students or working people rent an apartment that has three bedrooms but they want only one. They can rent the other two for sharing rent or earning profits.

People have rented large houses which they don’t even need. They stay there for free; earn from it their living, and pay bills from the rent they collect. This is also a very lucrative business but you must have prior knowledge of conducting business and basic mathematics.

Have a paying guests

This method is also known to many and people have been doing this for many years now. Having a paying guest means that they stay at your place with or without food and pay you in return. This method can be used to start a business of shared accommodations. You just have to arrange space, messing, laundry and other such services and start letting your space to people who need it. This is also a profitable business and investors have been into it for years now.

Renting a commercial property

You can also buy a shop, or space in a mall or market, then later rent it for the sake of capital gains. This business comes handy if you invest in crowd-funded projects. You just not pay the whole amount at once, rather you buy a commercial space in 2-4 years period on installments and later when the possession gets transferred to you, you rent it. This is also a popular method of doing rental business for ages.

Renting a portion

Last, but not the least, investors willing to become landlords buy houses that are multi-storey, then rent a portion of it to gain capital returns. This kind of business is possible only in multi-storey buildings or duplex, because you have to dedicate a special entrance for the tenant. And, also this business only works in high-end societies and big cities. Like, if one has bought a house in a famous housing society like Blue World City, they may rent a portion on their terms as the demand there is much higher than the supply.

Renting portions have remained as a beneficial way of investing into rental properties for ages, and the method still exists in large cities, where there is a huge hustle.


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