These real estate investors built cash-flowing portfolios. Here are the rules they swear by.
"More bedrooms equals more cash flow," said one investor who boosts rental income by renting rooms individually.
Investors Jeff White and Suleyka Bolaños focus on maximizing rental income by renting individual rooms. They use rules like the 1% rule to identify cash-flowing rentals. The more units on the land, the more income it generates. Mid-term rentals, situated between long- and short-term leases, offer a sweet spot in cash flow generation.
The 1% rule serves as a quick screen for potential deals, ensuring monthly rent covers at least 1% of the purchase price. Investors like Brannon Potts build their rentals to achieve expected rent, working backward from desired rent to determine affordable construction costs. Potts also employs a rule of thumb that more units on the land produce more money, even if local regulations limit the number of units.
Renting by the room is another strategy to boost income, with Peter Keane-Rivera focusing on filling all rooms of a large house with tenants. The couple from Denver, Jeff White and Suleyka Bolaños, add bedrooms to increase cash flow without extensive structural changes. Mid-term rentals, rented for longer than 30 days but less than a year, are seen as a balance between long-term and short-term leases, potentially generating higher revenue without the constant turnover associated with short-term rentals.
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