YOU'VE probably heard it said that a car is not as good an investment as a house, and that you should try to invest in real estate if you can. But how do you go about this anyway? Who determines how much money you can make if you decide to rent out that extra room in your home for some cash? Is it worth it?
Shakira Francis is a realtor associate at Century 21 Heave-Ho Properties, and she says there are several ways that you can invest in property to build wealth. She explained to All Woman that real estate isn't limited to just rooms for rent and houses for sale.
“Real estate is real property that not only comprises houses, but includes land and improvements including buildings, fixtures, road structure and utility systems,” Francis said. “Real estate is dynamic and so are the many ways people earn money from this asset. Whether you decide to buy, hold, or leverage the property for income, it is an excellent investment.”
One of the most frequently explored options in Jamaica is long-term residential rentals.
“Renting out an extra room in your house is a great way to earn passive income,” the real estate agent noted. “Most people who have considered this tend to want to rent the property on their own.”
She was quick to point out, however, that working with a professional from the beginning can save you from some of the pitfalls that new landlords often face in tenancy arrangements.
“There is value in working with a professional within the space who is knowledgeable about the market. It is this unique insight and knowledge that will assist with pricing, validation of references and income for prospective tenants, and the creation of contractual and tenancy agreements,” she advised.
Not very keen on sharing space or coming back for it later? Not to worry, there are other ways to make money in this lucrative industry.
“There are many options for leveraging properties. These include long- and short-term residential rentals; purchasing the property with the intention of selling it for a profit (flipping); Airbnb or VRBO (Vacation Rentals by Owner); commercial leases; and new developments, whether residential or commercial,” Francis listed.
But before you plant that 'for rent' sign in your front yard, Francis offers these words of advice:
“Determining the cost of and return on an investment property are important in ascertaining its value. Establishing the best value for a property begins with identifying the purpose for which the property was acquired.”
She continued: “The location of a property, whether residential or commercial, directly affects its market price. The property location represents different values in variables such as ease of access, neighbourhood, access to transportation, and proximity. This, therefore, has a direct influence on the maintenance and improvement of property values.”
She underscored the importance of routine renovations and good upkeep of your property, even if you are not thinking about leveraging it right away, as this will assist in maintaining and improving the value of your asset over time.
“It is also important to do the right research before doing any large-scale renovations, to ensure you do not over improve for the neighbourhood,” she added.
“There is not a 'one-size-fits-all' solution; a combination of these factors may need to be applied. Engage a real estate professional to assist with navigating the real estate market and determining the right solution.”
You can contact Shakira Francis via email at firstname.lastname@example.org, or follow her on Instagram @realestatewithshakira).