Best tips on how to make money from property

Are you looking to make money from your property? Seeff shares seven tried-and-tested tips.

You don’t need to be a millionaire to invest in property; a home loan is an option, and if you are serious about making a move in the investment arena, you could set yourself up for long-term success. Samuel Seeff, the chairman of Seeff Property Group, reports that property investment is a smart way to build wealth.  

The best part? While rental amounts keep increasing annually, your monthly repayments will remain unchanged. Down the line, you'll pay less than those paying rent for a similar place. But that’s not all. Your property will also increase in value, becoming more desirable as time passes. According to the StatsSA Residential Property Price Index (RPPI), property values have been going up from a whopping 71% (Johannesburg) to a jaw-dropping 141% (Cape Town) since 2010. 

How to Make Money from Property: Seize Entrepreneurial Ventures

If the entrepreneurial bug has bitten you, consider tapping into your property's equity. By securing a second bond against your property's value, you can acquire funds to fuel your new business idea. It's like using your property as a launchpad for your dreams.

It’s important to consider the following:

• Calculate Your Equity: Subtract your mortgage balance from your property's market value to determine available equity.
  
  
• Explore Loan Options: Research home equity loans and home equity lines of credit (HELOC) to see which fits your needs.
  
  
• Understand Risks: If you can't repay, you risk losing your home.
  
  
• Draft a Business Plan: Many lenders require this, detailing your venture and financial projections.
  
  
• Diversify Investments: Don't put all funds in one venture; spread the risk.
  
  
• Monitor Finances: Track both your business's health and property market trends.

How to Make Money from Property: Dabble in Rental Investments

Is expanding your property portfolio on your radar? You could purchase a second property for rental purposes with a second bond. It’s a smart option for those seeking cash flow without parting with ownership.

However, be wary of the nuances of the rental market – it's not without its challenges. To successfully manoeuvre through these complexities, you should enlist the expertise of a qualified Property Practitioner. With their guidance, you’ll get invaluable advice on market dynamics and trends, property prices, as well as negotiating terms and how to ensure a smooth rental experience - for you and your tenants. 

How to Make Money from Property: Sell for Growth

If the timing feels right and your property's value has appreciated significantly, selling it can yield a substantial profit. This profit can become a substantial deposit for a larger, more luxurious property, giving you a step up in the real estate game.

However, you should always consider the following:

• Market Timing: Study the real estate market to identify the best times to sell. High-demand periods can get you a better price.
  
  
• Home Improvements: Enhance your property's value with strategic improvements, like renovating the kitchen or adding energy-efficient features.
  
  
• Professional Valuation: Get a professional appraisal to understand your property's worth. This helps in setting a competitive asking price.
  
  
• Stage Your Home: Decluttering, cleaning, and staging your home can make it more appealing, potentially fetching a higher price.
  
  
• Choose the Right Property Practitioner: A skilled partner can market your property effectively, negotiate well, and guide you through selling.
  
  
• Negotiate Offers: Don't accept the first offer right away. Be open to negotiations and counteroffers to get the best deal.

How to Make Money from Property: Share the Load

Financial burdens can be eased by renting out a room or inviting roommates to share expenses. Your home becomes a collaborative haven where living costs are shared, lightening the load on everyone. This also becomes a consistent source of income that can help cover various expenses, from monthly rental payments to property bills.

Whether you have a spare bedroom or a converted space, this option works out for everyone. Not only does it provide an additional stream of income, but it also allows you to make the most of your property's underutilised areas.

How to Make Money from Property: Monetise Your Space

Is your garage empty? Why not convert it into valuable storage space? People often need secure locations to store their belongings. So, why not repurpose your garage as a storage facility and charge for offering a safe space for their belongings?

It's a win-win situation. You're maximising the utility of your property while addressing a common need in your area.

• Assess and Prep the Space: Ensure the garage is clean, dry, and pest-free. Consider adding insulation or dehumidifiers if necessary.
  
  
• Safety First: Install security features like locks, cameras, and motion sensor lights. This assures potential renters of their belongings' safety.
  
  
• Pricing Strategy: Research local storage facilities' prices to set a competitive rate.
  
  
• Offer Flexible Plans: Monthly rentals, discounted longer-term agreements, or even daily storage rates can attract a diverse clientele.
  
  
• Market Your Space: Use local classifieds, community bulletin boards, and social media platforms to advertise your space.

How to Make Money from Property: Host with Airbnb

Transforming your property into an Airbnb is a great opportunity for you to unlock an extra income stream. This venture lets you leverage your property's unique features, location, and charm to attract travellers looking for a unique and accommodating stay.

Airbnb lets you showcase your property, set pricing, and manage reservations. It makes the process easy, quick and accessible.

Similarly, converting your property into a guest house can be highly rewarding if you're willing to take on more responsibilities. This venture may entail more administration, but it's an opportunity to create a profitable oasis. Furnish comfortable rooms, design inviting common areas, and offer top-notch amenities to maximise return on investment.

Providing outstanding hospitality and experiences can garner positive reviews, encouraging return bookings and referrals.

How to Make Money from Property: Use Land Creatively

Investigate options like subdividing your land or developing a sectional scheme with multiple dwellings, which could open doors to various sales or rental opportunities.

Tailor your approach to your unique circumstances, location, and aspirations, and watch as your property becomes a foundation for financial growth.

Consider the following:

• Research Local Zoning Laws: Ensure you understand local regulations before making any changes. Some areas may have restrictions on subdividing or building additional dwellings.
  
  
• Subdivision Potential: If feasible, split your land into separate lots. You can then sell or develop these lots individually.
  
  
• Add Accessory Dwelling Units (ADUs): Consider building guest houses or granny flats. These can serve as rental units or spaces for family members.
  
  
• Build Vertically: Consider adding stories to existing structures in urban areas where land is scarce.
  
  
• Develop Shared Amenities: Shared amenities like a communal garden or pool can increase appeal if you create a sectional scheme.
  
  
• Consult a Land Planner: They can provide insights on utilising your property based on its size, location, and topography.

How to Make Money from Property: Key Regulations to Consider

Remember that navigating the rules and regulations of your local municipality is very important, as these also determine what you can do with your property.

Local Rules and Regulations:

• Ensure you understand your local regulations, which dictate property usage.
  
  
• Prioritise familiarity with these rules before exploring income options.
  
  
• Processes like subdivision or rezoning are complex; consider seeking legal advice.

Solid Lease Agreement for Renting/Sharing:

• Create a robust lease agreement to safeguard your interests.
  
  
• Prevent potential issues with non-paying or non-compliant tenants.
  
  
• Clearly define shared responsibilities and duties in the lease.

Account for Taxes and Deductions:

• Remember to factor in taxes when earning from your property.
  
  
• Offset income by deducting various expenses (except capital investments).
  
  
• Deductible expenses may include marketing, cleaning, and maintenance.
  
  

When exploring how to make money from property, it is important to have a solid plan and do comprehensive research to make the right decision for your specific needs and goals.

While it’s not without risks, there will always be ways to use your property for additional income. Seeff offers property investment tips to guide aspiring landlords in South Africa.