If you’ve recently gotten into buying properties to let them out, you’re most likely making a good 8%-10% on top of what your monthly mortgage is. While the cash may be nice on your first property, it’s most likely not enough to live off of. You may be working a main full-time job while you get your feet off the ground and find more property investment opportunities. So when the money rolls in month to month on your first property, there are several things that you can do with it, rather than just letting it sit in your regular checking account.
Re-invest in Your Property
Your property is going to be an investment for the long term, with the hopes of selling it for more than you purchased it for. Use the money you make off of having tenants for not only maintaining the upkeep of the property, but making improvements to it as well. Both structural and landscaping improvements can add several thousand dollars to the end value of your investment, while you only need to spend a fraction of that to make it happen.
Open a High Interest Savings Account
Consider mutual funds or a high-interest bearing savings account to let your money grow further than it already has. Keeping your money in a checking account prevents you from making any interest on your money. While you aren’t going to get rich anytime soon off of the interest, the money that you do make can be used for either investing further or to help maintain the grounds of your property.
Buy More Property
If you enjoy owning a property and having tenants, consider using the money you make to begin investing in another piece of property. Owning a home and being a landlord for one property still means that you need another source of income. Owning several homes, on the other hand, means that you could potentially make enough to live well, while your tenants pay your monthly income. Continue investing and you could eventually hire property managers to do all of the hard labor for you.
Make sure to think about what you want to do in life before deciding what to do with the money you make off of letting property out to tenants. While it’s nice to be your own boss, there may always come a time that you might find yourself with your hands full just trying to maintain the condition of one piece of property.
About the Author: YourPropertyClub.com provides buy to let advice, portfolio management, and investment property for sale in the UK.