With the sky rocking home prices in the greater Toronto area, it is hard to find properties with positive cash flow if you want to buy a rental property.
As a real estate investor, you should always try to find a way to boost your rental income.
Here are a few ways to boost your rental income.
Change single detached or semi detached house into a legal 2 units.
You need to find the proper house that can be easily converted, for example, basement ceiling height has to meet the minimum requirement of the city. Fire alarm needs to be inter connected, basement window has to be big enough to escape in case of fire, etc.
Find a key location that can easily find tenant and rent out each room separately. This will bring you very good income but needs a lot of attention for property management. Depending on the location, license is also required in some location.
Students attending university will always need a place to live. Living within the university’s residents are generally very expensive, they are mainly targeted for freshman. Starting from the second year, most students will find a way to live outside of university. They can rent a single house as a group to share the cost. So houses near the university are becoming a cash cow for investors because investors will collect more money by renting out to students than renting out to a single family.
This is another way to rent out one room to international students, generally for high school students. They do not know how to take care of themselves, you need to provide 2 meals a day. In return, you get good rental income. Rent is paid by their parents and always on time, so if you meet the requirement by the school, you can consider this option.
Rent to Own.
Rent to Own means that your tenants rent first then buy it out from you in a couple of years. This is a special way to borrow money from your tenants to boost your monthly rental income, you can charge higher than market rent to cover your expense. You also get upfront deposit from tenants, this can also lower your borrowing cost, in the end, you get better return on your money invested. I’ve talked about Rent to Own in my previous blogs.
Short term rental – furnished house
You can also provide fully furnished house for short term rental, charging higher than market rent. Some people may need short term rental because of their short term contract, they do not want to move furniture around. Or someone may be new to the province, not sure about their permanent address, just want to try it out for a few months.
Short term rental – family hotel
There are quite a lot of people who convert their houses to family hotels. They provide full services, the rate is cheaper than a typical hotel. People who choose to stay in a family hotel get to live in a local community, this is especially good for new immigrants who just landed in Canada.
Short term rental – Airbnb
If you have extra space in your home or have a condo in key location, there is a world of opportunity awaiting you. By becoming a host on Airbnb, you can share your home with travelers eager to experience the place you call home. Airbnb is a community of passionate entrepreneurs and adventurous travelers looking to build a better world together.
There are other ways to boost your rental income too. When you buy a rental property, you need to think of your target tenants, if you can’t find your target tenants, is there a backup plan in place?
Remember that good property always attracts quality tenants.
If you are interested in investment opportunity or investment strategy, let your money work for you, you can visit our website at www.torontohomehunting.com, or wechat TorontoHomeFinder. We have products for both inactive investor and active investor.