Depends how much money you can invest right now, how much time you have to spend, and how quickly you need to start hitting that $2000 mark.
Need it now? Check out Craigslist gigs (help with moving, quick jobs, website help), or try flipping thrift store and eBay stuff. Pros: Quick, no skills needed. Cons: Unreliable and more time consuming.
Need it reliably? Work on a business and work your ass off in your spare time. Pros: Easy to make more than $2000/mo if it goes well. Cons: Will take a lot of time and effort to maybe work out for you.
Alternatively, invest in a property. Pros: Easy $2000/mo through rent. Cons: Lots of upfront investment & research needed to not screw yourself over as a property manager.
Personally I'm in a similar situation and currently selling on eBay and running a side business. Been at it ~6 months and make 200-400/mo on top of my salary, but looking to ramp up the business more this year.
Edit: One option I overlooked of course is investing. The safer the investment, the more up-front capital you'll need and nothing is truly 100% safe. Gamble on options but be prepared to lose everything, if you really need something immediately.
Depends on a lot of factors, I have made that on a single property (short term vacation rentals) but more typical is like what you say where it can take 10+ properties to clear $2k/month for long term rentals. Right now my best property is clearing two hundred (or so) a month, which isn't horrid but far from great. I only have long term rentals right now though, so that's ok.
IMO: Rental property is best looked at as a long game, not a short term income stream. It is a solid way to gain wealth, just won't happen overnight.
>I have made that on a single property (short term vacation rentals)
Not going to make assumptions about your specific case, but many people using AirBnB are breaking the law and/or are vastly under-insured to be renting out property short-term. One lawsuit or accident and any "profits" (and much more) will be wiped out.
Real-estate is an old, mature business. There's no magic in how to make money in it, nor are their outsized benefits.
Yea, I've been doing this long before AirBnB existed, and actually I've never registered one of my properties with them.
In my state we have to pay monthly sales tax on rentals less than 6 months along with a number of other basic rules too (including insurance). But none of them are hard to follow, AirBnB violates them constantly however.
Making good money on vacation rentals in beachfront towns is very doable. We used to be able to buy cheap properties and rent them for $1-2k/week for vacation rentals, and they'd stay busy most of the year, meaning after expenses it was pretty easy to clear $2k if you bought right. Now that is not so easy given the cost of real-estate even with capital being fairly cheap.
Somewhat of a tangent, but do you have any advice/resources on how to price in repairs and maintenance?
I am moving soonish, and trying to figure out what to do with my house. A back of the envelope calculation of Expected_Rent - Mortgage - Insurance - Property_management_fees gives an appealing number, but I am not too sure how to price in all of the long and short term repairs/maintenance and any other potential liabilities.
In general, property management fees run roughly 6-10% of rent and maintenance really depends on the age of the home. A newer home that is in good shape may not cost you more than a few hundred dollars per year in unexpected expenses, an older home plan around $1-2k/year to be safe. In my rentals I always price into the rent some core expenses, specifically lawn & exterior care as well as pest management. This lets me make sure the property stays looking proper and reduces the chances I need to do major upkeep work/expenses. Inside I always paint the house between long term rentals, which means the inside stays good, and I usually install wood/laminate floors before I start renting and keep decent appliances in them as well. This means I rarely have any larger expenses, after my first initial market expense.
Some things to look into are things like property taxes, a rental isn't your primary home and so depending on your state the property taxes may increase once you rent it out. HOA's sometimes have rules about notifications, fees and lease terms you have to take into account (I hate HOA's).
Best way to find out your specific details is to talk with a rental agent in your area and ask them to give you an estimate. They'll know the quality of the homes in the area and the approximate costs owners are paying annually. That'll give you a baseline, and I'd ask 2-3 to make sure you aren't getting an edge case.
FWIW: My higher end properties cost me less (% wise) in maintenance than the lower end homes, simply because it is a vastly different cliental and quality of home. If your house is a typical middle class home for your area that is almost always the sweet spot IMO. Higher end can be harder to rent out and lower can be tougher to manage and keep up with.
When I did this (rented out the suburban single-family house I used to live in), if something needed repairing, I'd just drop by after work and fix it myself since I only lived half an hour away. I set my rent based on the market rate.
It turned out that insurance on a rental property was less than on an owner-occupied one, which made no sense to me, but I wasn't going to argue with MetLife :-)
Basically, the floor of your monthly rent should be your existing costs: mortgage, insurance, property taxes, average annual repair costs, etc. In markets I was familiar with, this was always well under what rent would cost. Also, bear in mind that repairs and other expenses like property taxes and mortgage interest are now deductible since the rental is a business.
IIRC I had around $1,000/mo in cashflow from the rental before factoring in savings from the additional deductible items. I sold the property after three years since I didn't really want to be a landlord, but it was free money.
Don’t you have a good idea of the maintenance needs for that house? You lived there.
If you don’t understand the costs of living in it as your primary residence, you perhaps should consider that realestate Investing/management might Not be a good match for your skill set.
I have an idea what it costs me personally, but I am not sure how to price in the plain fact that renters will not care for your house as much as you do.
And you are right to ask this question. Your costs when you live in the house will not be the same as when someone else moves in. It is also why I suggest you talk to a local agent or 2 because they will know the trends in your area.
I had a house in one city that the maintenance cost was outrageous compared to my other properties but it was in the middle of the pack (cost wise) for the city demographics and building codes. So it is hard to pinpoint even for an experienced real estate person without doing some analysis in your area specifically.
Here are a few of my common questions to an agent if I am looking at a new area:
1. Average time on market, from day of rental listing to lease signed.
2. Basic demographics and occupations of the people living in the neighborhood and surrounding area. Including average income.
3. Hardest to rent property details compared to the easiest to rent. e.g. 4 bedrooms might be super hard to rent in an area with predominately single people, but would be super easy in a family driven neighborhood. I'm looking for contradictions here, e.g. they say the area is predominately housing single people but the demand is for 4 bed/3bath houses. Either they are idiots, or it is group housing/party area which can bring up a different set of rental criteria. Or there is something super unique about this area and they should be able to articulate it to me or I don't accept that risk.
4. Average cost of maintenance for similar rentals. I usually ask, avg plumber cost, avg electrician if I don't have people in the area so this way I know what they are seeing.
5. Special lease terms that are needed or common for the area. And special county/city or HOA rules or costs I need to be aware of. Including parking fees etc.
6. Largest employers in the area by number of people.
Real estate is almost entirely about demographics, learning the target audience/area will let you understand the situation and risks better.
Honestly no different than startups IMO. If we build a product that there is no client for it doesn't matter how cool it is or how much money we raised or spent. If you build (or buy) a property that is wrong for the area, selling, renting or doing anything with it will become nearly impossible.
Correct, net after all expenses. My goal is always to have 100-200 free at a minimum but in the end the rental cashflow isn't to build monthly income (in my case), but instead to build equity in the property.
There was a period of time I did it for monthly cash flow, and when I did that I'd target different types of properties and target a different minimum free cash flow. But I switched my investment strategy to be one to maximize equity and property value, I've found this to be far more profitable in the medium to long term, but obviously doesn't provide the highest monthly income initially.
I know a couple people who have very desirable Florida condos (as well as other properties) and each condo alone is doing ~2k. Granted that's day-by-day, not a monthly rental.
How? In the freelance developer space you're either competing with people in developing countries who work for peanuts, or your potential clients have have the money to throw at high quality work which means you're competing with the top 1-5% of freelance developers.
There are plenty of companies that just want results. They don't want to deal with the hassle of online developers they don't and can't trust. Start as a consultant and get a great reputation and you'll have more work than you want. Also get advice on the best practices. It's easy to get locked into contracts that are just not worth doing.
You should take a look at Toptal, I use it for just this, working around 20 extra hours a week. Can't give out my rate there, but it's fair.
Easy to get gigs once your in, the clients I've worked with have been good. Very little mental overhead since they handle invoicing, getting customers etc.
By finding a niche and looking for work in that niche. I picked NLP in the financial space and have been able to find work within a couple weeks every time I look. If you search for freelancing threads here on HN you can find some great info on getting freelance work.
This sounds like something that requires a masters degree. How did you manage to prove that you were knowledgeable/skilled in NLP when you got your first job in that space?
Full time job is for a consulting company. Got brought on for some greenfield work that happened to be in the space. Got to learn on the job. Leveraged that experience to land freelancing clients.
One option is to try and monetize a hobby you want to do anyway. I’ve just started to do this with my woodworking/cnc/making hobby.
I make art piece wordclocks[0]. I’ve Sold a few with almost no marketing effort. My goal is to sell two per month.
Part of my marketing effort is improving visibility on Etsy and so I’ve started selling much less expensive items on Etsy too[1]. They are not so much for the revenue as for the traffic, ratings, and learning how to best use Etsy. These secondary products are all based on things I’ve designed and made for/with my young kids.
Two observations:
- I’ve really enjoyed the path of developing better processes of how to fabricate things more efficiently
- I’ve really enjoyed getting my kids involved with making. It’s fun to observe them thinking about how to make stuff and working with them to figure things out (they are 3 and 6).
By monetizing my hobby I can also write off tools I’d like to have. Note that I started pretty low cost using tools at my local makerspace[2].
Not software related, but my sister makes and sells simple candlesticks online for that much each month.
I also resold earbuds/earplugs online for a years to get $1000-1500/mo. Seemed like a viable side project only taking up an hour or so every night to prepare packages, and then an extra 20 minutes to swing by the post office each morning.
Like others said, it's always a good idea to reduce your spending and try to save. You can even use that savings to occasionally fund projects without feeling too bad if something fails.
Yes, she sells via Etsy. I would link her store page for the curious, but sellers on Etsy are really homogenous and so you can glean the same info from any of them probably.
Maybe not in one step. But starting a SaaS side project or starting to freelance (with enough reputation and client pipeline so it is reliable) also won't give extra $2k from one month to another.
Advancing the career as software developer still seems the most reliable and conservative way to get am extra $2k.
Disclaimer: it is not my option though. I am building a side project to earn extra revenue, but because my goal is not only the extra money. I want to work for myself with something I enjoy building. With that comes more control over my life, more freedom, and joy from building something nice.
A lot of us can't negotiate a salary period, people outside of tech don't seem to realize this Major corporations have very concrete pay scales, you start at the bottom of that scale and you climb your way up it year after year with very rigid and defined maximum pay increases based on arbitrary factors in an annual merit increase and not by going "gee boss, I think I deserve a raise!".
You can change jobs with a raise though. This in software development of course, as there is a lot of demand almost everywhere and it is easier to change employers than other companies
If youre a top performer, theres always money for you. Ive gotten some 50% raises without a promotion from massive extremely cheap large corporations. But I produce and make those above me look very good. I pull political strings and execute on projects that give my bosses more power.
Yeah, most jobs in the United States (probably the world) don't have "political strings" and "projects". You have clearly defined responsibilities, you do that day in and day out until you quit/retire/die/move to another position.
If you just care about hitting the $2000 mark, optimizing for time and effort, I'd say just find a product to sell on Amazon and market the hell out of it on Facebook and Instagram.
Run paid ads and make up for small margins with high volume. Try to offer your product at the lowest price among your competitors.
Paid ads on social media are interesting because sometimes you get lucky with an ad and it goes viral/attracts a lot of sales, but often it doesn't. You have to experiment and know your market.
Not sure why you're looking for that value exactly or what your current situation is, but in addition to increasing your income, you can also look at decreasing your expenses.
It may be easier to shave off $500 in monthly expenses and only need an extra $1500.
I have a friend that turns time allocated for other things into paid time. For example, she got certified as a Spin coach, so takes classes a couple of times a week and gets paid to work out. She also does yoga classes and gets paid for that too. Sure, you might not hit $2K/month but it'll get you part way there...
You can probably get about £200/day painting and decorating for people you know. If you're prepared to work weekends it'll get you nearly there after word gets around that you're trustworthy and polite...
I have a question to everyone in this thread: how do you deal with the bureaucracy (taxes and stuff) that comes with a side business? (I'm curious also about how it varies between countries)
I hire a good tax professional. That's it, as simple as that. I have a gentleman that I have used since 2014 who I pay about $350 to make sure everything is filed correctly. He helps me with tax planning. He helps me with the forms. The IRS is happy with me. I spend maybe a total of 2 hours a year thinking about it (I am fairly organized with my receipts though, which helps).
I also have a good attorney and a good insurance broker. All in all, very simple. If I spend half of a day per year on any of this stuff, I would be surprised.
If you are in the US, it is a straightforward form Schedule C. Depending on how your business is setup, Quickbooks or any other software will easily generate a form Schedule C for you.
Too overworked at my day job to do much side programming work. I decided to mainly focus on generating passive income through investing. I don't see many things that I think scream out "cheap" but the MLP sector has still not seen much of a recovery from the very steep declines from several years ago. You could look into $EPD, $ET, $MMP. Distributions given off of the units are tax-deferred, so it shouldn't cause much of a tax issue until you would unload the shares. These companies also try and raise distributions quarterly (yes, $ET has not raised in a while, but they took a worse beating than any of the others. When they do raise them, and they will, share price should recover nicely).
You could also look at some CEFs. PIMCO would be the main one I'd consider for bonds. $PDI / $PCI / $PTY. If you would want to get into some equity CEFS you could look at $UTG.
Obviously you can consider a lot of other options if you don't mind them tossing off less income, but your post was bout generating monthly income :)
Tried this for 2 years and broke even at best. It takes a bit of effort to understand the system and as a techie I found it interesting. It's easy to get the option's premium, that you get to keep , and it even seems like you're going to make a killing but then things turn against you and you lose. The down side is fast and hard so it's easy to lose your gains in no time. Then you're just trying to get even. It not worth the time and money. I don't recommend it to any one.
Doesn't work for the Average Joe. You casually added that you can lose money but most people lose money or break even at best especially in Option trading. For someone like OP, I wouldn't recommend this.
Need it now? Check out Craigslist gigs (help with moving, quick jobs, website help), or try flipping thrift store and eBay stuff. Pros: Quick, no skills needed. Cons: Unreliable and more time consuming.
Need it reliably? Work on a business and work your ass off in your spare time. Pros: Easy to make more than $2000/mo if it goes well. Cons: Will take a lot of time and effort to maybe work out for you.
Alternatively, invest in a property. Pros: Easy $2000/mo through rent. Cons: Lots of upfront investment & research needed to not screw yourself over as a property manager.
Personally I'm in a similar situation and currently selling on eBay and running a side business. Been at it ~6 months and make 200-400/mo on top of my salary, but looking to ramp up the business more this year.
Edit: One option I overlooked of course is investing. The safer the investment, the more up-front capital you'll need and nothing is truly 100% safe. Gamble on options but be prepared to lose everything, if you really need something immediately.