People all around the world are looking for ways to make extra money. While some of us have great jobs which absorb all of our interest and pay for the life we want and more, these jobs are sadly in the minority. Most people have a job that does the trick: puts food on the table and pays the bills. But for millions, this just getting by, this living paycheck to paycheck, just isn’t enough.
There are three primary ways investors could potentially make money from real estate: An increase in property value. Rental income collected by leasing out the property to tenants. Profits generated from business activity that depends upon the real estate. Of course, there are always other ways to directly or indirectly profit from real estate.
Make Extra Money
Enter the endless search for the second income. For people in partnered relationships, an additional income stream can be incredibly helpful, often taking a household into a new tax bracket. For single people, a second income can turn the workday into more than a survival tool – possibly taking a person from subsistence worker to saver, traveler, and investor.
It’s amazing what you can do with a little extra money. Used wisely, an extra income can be a true life-changer.
Here are three ways real people are making significant extra money in their time spent not at work:
- Spread betting with ETX Capital is a great way to make extra money off of personal insights and observations about the financial world. When you make your first account (you can make a trial account without having to deposit even $1), you’ll see charts with tons of stocks, indices, currencies, and various financial instruments, all with their current prices in real time. When a person makes a spread betting contract, they will make an educated guess about the future value of one or more of these financial entities. If at a set period in time the value has moved in the chosen direction, the investor will make money in proportion to the amount staked at the beginning of the contract. Once you learn the ropes, you can make a surprising amount of extra money.
- Freelancing is another tool to make extra money. Perhaps you have some reliable skills that you can monetize in various ways. Maybe these are skills you learned in your primary career, which you can put to work during evenings and on weekends. Or, maybe you’re tired of doing the same thing all day and want a change. Try your hand as a writer, editor, graphic designer, voice actor, etc. All of these jobs are available at entry level for freelancers, and are found on a diverse set of job-hunting sites accessible to all. Build good feedback scores and you could actually create a second career.
- Passive income is a great way to earn money while pursuing other tasks in your daily life. If you have the money to buy a home, or to rent out part of your home, you can earn cash flow from your tenant. If you have stocks with dividends, you can use that money as income. There are many examples, all available online, which interested parties can explore
A Second Income
If you research and constantly look for opportunities, you’ll find a method that will provide serious second income, all in the few spare hours you have out of your busy life and work. Don’t be disappointed if you don’t get great results at first. Set a reasonable goal to meet in your first month, then work each month thereafter to surpass it.
Finding a second income option that works for you is all about consistency. If you, like many, are working in the gig economy, you’ll greatly benefit from word of mouth and other reputation-based methods for growing your new income. If you work steadily for a year, you’ll be surprised at what you have built by the end of it. Stay productive and stay interested in what you do – this is the way to bring in serious extra money.
- How eCommerce Could Help Your Business - December 16, 2020
- Are You Too Old To Begin Investing? - November 28, 2020
- Four Tips To Invest In Your Health - November 24, 2020
Housing is most people’s biggest expense. On average, Americans spend 37% of their take-home pay on rent or their mortgage, which doesn’t leave much room for saving after their other bills are paid.
The rising cost of housing is making it harder for the average American to build wealth. But luckily there’s a way to get your housing costs down so you can invest more of your salary.
It’s called house hacking, and it involves renting out a portion of your home to cover some or all of your monthly mortgage payment. To help you get started, here’s an overview of what house hacking is and how to pull it off.
What is House Hacking?
House hacking is a popular way to reduce or even eliminate your mortgage payment. By renting out parts of your home to tenants, you’ll be able to generate enough revenue to offset or completely cover your housing costs.
You’ll also be able to earn rental income without the costly mortgage rates that come with investment properties. Many banks require investors to put 20% or more down on the real estate they buy. Lenders also charge 0.5% to 0.75% higher interest rates for investment properties than primary residences.
But by living in the home you’re renting out, you’ll be able to put down as little as 3% and qualify for the lower interest rate associated with primary residences. That’s why some investors live in their rentals for a year or two before moving on and buying another property.
It’s usually easiest to house hack by purchasing a multi-family property with several rental units rather than a single-family home. Houses that have multiple apartments typically earn more rental income. You’ll also have more privacy if you go the multi-family route because you won’t be sharing a house with your tenants.
But if you already own a single-family home or condo, that doesn’t mean you have to move to house hack. You can rent out your spare bedrooms or basement to offset your housing costs and build equity. It might be a little awkward to live with tenants, but it’s worth it to save a big chunk of change on housing.
If you don’t have any extra space in your home, you can even generate extra income by putting up a tent or yurt on your property and renting it on Airbnb. Believe it or not, travelers may be willing to pay to go camping in your backyard, especially if you live in a scenic area.
How Can House Hacking Help You Build Wealth?
House hacking can help you build wealth by increasing your home equity and freeing up some of the money you’re currently spending on housing. This will enable you to invest a bigger portion of your income and have a more comfortable retirement.
Even if you only rent out a spare bedroom and earn a couple of hundred dollars from house hacking, that money will really add up over time thanks to compound interest.
Say you’re able to invest an extra $500 per month over the course of your 30-year mortgage because you rent out your basement. If the money you invest earns 8% interest, you could have an extra $679,699 in retirement.
You can even continue to rent out your home after it’s paid off to give you an extra passive income stream in retirement.
Wrapping Up
Some financial experts believe that homeownership isn’t a good investment. They argue that residential real estate doesn’t appreciate enough to cover all the maintenance and insurance costs that come with owning a home. In the end, they think you’d earn more by renting and investing the money would’ve spent on home maintenance in the stock market instead.
But with house hacking, you don’t have to choose between owning a home and investing. Renting out your spare bedroom can help offset the costs of homeownership like mortgage payments and property taxes so you can fully fund your retirement account. You’ll even qualify for a lower interest rate and down payment because the home you’re renting out to tenants is also your primary residence.
If you decide to move, you can keep the home as part of your investment portfolio. You can even continue to rent it out after it’s paid off and earn passive income for life.
Read More
3 Ways Real People Make Extra Income Money From School
How To Make Extra Income
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.
Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.