How do you translate your real estate investments into passive income sources? To help you get started, here are some tips to help you start bringing in rental income in the Chicago area.
Buy a Turnkey Property for Immediate Passive Income
If you want to start generating income from your investment right away, you can't afford to deal with a "fixer-upper". Instead, you want a property that's as move-in ready as possible. In an ideal situation, it would even come with tenants already renting the unit.
That kind of rental is what we call a turnkey property. These are rentals that are already in a livable condition with active tenants. All you have to do as the new owner is "turn the key".
These properties are always more expensive than homes that need a lot of work. But by the same token, you save money by not having to do any renovations yourself. You also get to start collecting a return immediately, rather than waiting weeks or even months to get a new tenant in the space.
Screen Your Tenants
Renting to suboptimal tenants can lead to late rent payments, property damage, and any number of other headaches.
To avoid problems down the line, you should always screen your tenants. This process should include a criminal background check, eviction history, and government watchlist status. It's also a good idea to set a minimum credit score, as this acts as a good indicator of a person's financial stability.
Stay On Top of Maintenance
As the property owner, it's your responsibility to ensure that all of your rental units are in a safe, livable condition. As the residents, your tenants can handle day-to-day upkeep. But major repairs will fall on your shoulders.
That's why as a rule, you never want to hear from your tenants. It almost always means that a major expense is in your near future. But you can work to prevent that outcome by doing some proactive maintenance.
An ounce of prevention is worth a pound of cure, as they say. Spending a little money to keep your unit in good condition can prevent more expensive repairs later on.
Outsource Day-to-Day Operations
Although it's often referred to as "passive income", owning rental properties carries more day-to-day work and responsibility than many realize. To maximize the return on your investment, you need your rentals to run smoothly at every stage, from finding tenants to handling lease renewals.
Hiring a property management firm like Chicago Style Management can take the guesswork out of renting your property. Our experienced agents can handle every stage of the process, including advertising your unit, screening tenants, collecting rent, and dealing with maintenance and repairs.
Contact us today to learn how we make collecting rental income easy.