How to Make a Living Through Property Without Owning It
There are a multitude of ways to make money out of property and the beautiful thing is, you don’t even have to own it to make your fortune.
Adding value to a property benefits all parties and, in my experience, as much money can be made from not owning property as what can be made from actually owning it.
Finding the Right Property
88a Bold Street was a very large two-bedroom apartment that was being rented out for £500 per month.
The property was over 30 years old and poorly maintained and so the rental price reflected its condition.
Instead of upgrading the property, the landlord had resigned himself to accepting the £500 per month, a rental cost that had not seen many increases in its 30-year history.
It worked for him, and he was content with the income he was bringing in without having to carry out costly refurbishment works.
I could see the potential in the property and knew there was money to be made.
Make an Offer that Suits the Landlord and is Fair
I approached the landlord and made him an offer: if I could guarantee him a rental income of £500 per month for 10 years, with no management fees or maintenance costs to be deducted from the rent (outlays that were probably amounting to £200 per month), and with me looking after the property, would he agree?
The deal was a good one for the landlord and he readily accepted my offer. It meant he’d receive the full £500 per month in his pocket. After he agreed, I invested £50,000 and refurbished the apartment, turning its two bedrooms into four.
This meant that I was able to bring in between £2800 and £3100 per month in rent.
88a Bold Street is amassing on average £3000 per month for a period of 10 years, giving me a substantial return of around £360,000 on my initial £50,000 investment.
Add Your Value
The landlord has benefited too, with his guaranteed rent; he will also be presented with a beautifully refurbished and maintained four-bed property with two new en-suites at the end of our agreement.
I do not and will not own the property, yet I have made a significant profit on it. There are, of course, ebbs and flows in the property market, yet despite any downturns, I will have made 7 times my initial investment on the apartment.
This isn’t an experiment or a one-off; I have done this multiple times on properties across the city and will continue to do so.
Problems with Property Investments
It isn’t always easy, either. Properties bring their fair share of issues, with maintenance challenges and tenants refusing to pay rent only scratching the surface. Landlords usually receive only 40 – 70% of the gross rent, such are the costs that are associated with renting out a property.
Why Own Property When you Don’t Need to?
By offering guaranteed rent to landlords, I have removed the headache of property ownership, and that headache can often be debilitating to them. They have value added to their property, they get peace of mind, and they receive more money in their pocket.
What Did I Learn?
I’m not afraid of putting in the effort; I’m not afraid of a challenge. I seize each day and look for opportunity on every corner of every street and I benefit considerably from doing so. You could, too, if you put the effort in.