As we’ve been discussing in our series on asset management, sophisticated managers try to max out their property’s potential before selling it. When it comes to side income ideas, your really need to keep your investment horizon in mind.
You should as well. When do you plan to sell your rental?
What’s Your Investment Horizon
Are you waiting for a certain property evaluation? Are you planning to hold forever?
There’s no sense on taking on a project with a 5 years breakeven projection if you want to sell next year – right?
Here’s a quick overview of some side income vs. breakeven time to get you thinking:
If you want to see an immediate profit from a very small investment, consider:
- Payday rent schedules
- Broadcasting signals
- Pet Fee/Rent
If you want to break even within 2 years, consider:
- Short-term rentals
- Corporate housing
- Bicycle rentals
If you have a 3 – 4 year horizon, consider:
- Storage containers
- Boutique Housing
- Live cam
If you can wait 5 or more years for big returns, then investigate:
- Transportation options
- Alternative energy
- Becoming a private lender to your tenants
You can get an overview of all these ideas and MANY others in my 40 Ways book.
Take Away Idea
1 – You should try to increase your side income, but don’t tackle projects that don’t payoff before you plan on selling.
2 – If you plan to hold your property for a long time, then take on a long-term project in addition to short term ones.
Compounding Side Income Ideas
Time is precious; don’t waste it.
If you really want to be an ultra profitable owner, then behave like a professional asset manager.
Your side income project might require a small investment. That will take a bit to pay for itself. But after you pay yourself back – what will you do with the extra cash?
I suggest you let the additional money fund your next side income project. Let your small side income projects fund the larger ones.
If you’re planning to hold for a long time, set yourself up for geometric returns!
So where ever you are along your investment horizon – get going. Do something!