Earning passive income from rental income

 Have you considered earning passive income from rental income? Decide your rental model and if you are willing to invest funds. Please see below for different options

a) Renting out a complete house or appartment completely

Before buying a property to rent it out, please consider the math carefully. As many people underestimate costs. In Germany for example the average profit from renting out property is approximately 3%, that includes the value increase in the property after sale. Please consider costs you would have as someone who rents out an appartment

1) House costs- usually a fee paid to the administrators or group of other owners for certain costs that are shared by all

2) Taxes

3) Insurance - house insurance and potentially indemnity insurance

4) Money set aside and spent on maintenance

5) Money set aside and spent on renovation (many renters leave rental properties in a disastrous state and it may require renovation beyond what you can claim on any deposit)

6) Money set aside for time periods when the rental property is not rented out 

7) Money to pay someone else to manage renting out the property (in case you don't live right there)

8) Money you pay to travel from and to the property each year (in case you do so, in particular, if you do not live in the same town this can be sufficient)

9) Money for a rental association, that indemnifies you or gives you free advice in case you need to sue the renters, or if they sue you

10) The interest rate and principal payment you have each month on the mortgage for the rental property (if you do)

11) Money set aside in case other rental property owners of the same appartment block (if it is an appartment) agree to make building upgrades that all property owners have to fund sharedly

12) Any monthly rental property fees that in your country are not paid for by the renter, but the property owner (in case there are any others than the ones metnioned above)

In summary, in most cases you only reliably make money if your rent is at least EUR-EUR 800 per month. This means in order to make money from renting, you need to buy and rent out a large appartment or property. For small ones you even risk a loss, if you take all above costs into account, in particular potential renovation.

b) Renting out a shared room

c)) Renting out on a usage basis via services like Airbnb