How To Make Money Subletting Properties

What is a sublease?

First of all, do you know what a sublease is? A sublease is when you lease out a property to another renter. A lot of people don’t know they can do this and in some cases you can’t, it all depends on how the lease was written up.

Find A Potential Fixer Upper

I know you might be wondering how you can make money subleasing a property and that is what I am here to talk to you about. The key here is for you to lease a property that is not completely fixed up. By this I am talking about old paint, torn up flooring and things like that. If you can lease a property like this for a very small amount, then you can put a little bit of money into it and fix it up and then sublease it to another renter for a little more than you are paying.

An Example

For example, you lease a house for $500 per month for one year and you put $400 into it in order to get it looking better cosmetically. The next year, you find a renter who is willing to pay $750 monthly for this property. So, if you make an additional $250 per month, then you will end up making $3000 minus the $400 you put into it.  So you will earn $2600 over the course of one year on this property.

Just think if you had 5 properties that you were doing this with! Also, one thing you need to understand is that most properties won’t have a 100% occupancy rate and you need to account for this as well. There are many things that you will figure out as you go along but just know that subleasing property is a great way to make extra money.

Tips On Subletting Property

Find Homes In Great Locations – The very first thing you must do when subleasing a property is to make sure it is in a great location. Just because you found a landlord that will sublease to you doesn’t make it a good deal, you need to find something that has a lot of potential as well as traffic close by.

Avoid Multi Unit Buildings – Something that I strongly recommend is that you never sublease a multi unit building or even parts of it. The reason for this is because most people will see that you are not the landlord and they will start to question what you are doing. This is not a problem but some tenants won’t like that you don’t actually own the property.

Strive For A Quick Turnaround – Lastly, you must have quick turnaround. By this I am saying that you need to fix them up and get a renter in them before the first month is up or else you will be stuck paying the rent for the second month.

If you want to make the most money possible, then you need to make sure you are sticking to a plan. My advice is to create a plan with each and every property that you have because you don’t want to get overwhelmed with what you are doing and not have anything to resort to. Trust me; a plan will do you a lot of good.