Simply Junior

A real estate Option is the most useful of all real estate tools when it comes to making money. Not only can it control future profits, but also current profits when used for that purpose. We are all familiar with the benefits of Optioning land at a given price, then getting it rezone for a higher use, or finding a builder/developer who will joint venture to increase its value, or putting a mobile home on it to increase its value before exercising it.

A less known use of Options is when a property is being bought by you under a Lease/Option. Your Option can call for high Option payments, each counting toward the purchase price, and low rent payments. It could also be used to motivate a seller to hold the rents constant for several years prior to exercising the Option. When you subleased the property, your low rents would generate extra cash flow for you.

You might even negotiate a portion of the rents to also be applied toward the purchase price; so during the term of the lease, you could build equity by having a portion of the rents counted toward the purchase price.

The key to this is that your lease would give you the right to sub-lease, so your tenants could be paying the rent and earning credits toward the Option price that you will be able cash in on.

Another use of an Option is to control rents, and thus control value. Suppose you were renting a house and were willing to pay the landlord extra rent for an Option to Lease the house at a set rent for a number of years. This would set a cap on the rents even though the operating expenses, taxes, insurance, etc. might be climbing. If you subleased the property, each successive tenant could be paying more rent to you out of which you’d be paying the same low rent to the landlord.

Even though you had no Option to buy the property, at some point in the future the owner is going to approach you to buy the property because your low rents are going to cost him more than he is making after paying his rising costs. Your lease will make the property very unattractive to other landlords, and you might be the only buyer. You might be able to convert your lease into ownership of the property at a heavily discounted price.

On the other hand, for years, in lieu of rental deposits, I have used a payment for an Option to extend my Rental Contract for another year at a rent of no more than 10% more than the current rent. For this I am paid a sum roughly equal to what would have been a rental deposit, but which differs in that it will not be returned nor ever counted toward the rents.

Each time I want to raise rents, I set them just below the 10% mark and explain that my costs haven’t risen quite so much and I’m passing the savings on to the tenant who has been programmed that 10% rent raises are inevitable by his Option to Lease.

Opportunities are everywhere. It just takes time for the person to see what is there and taking advantage of the situation or having someone else get to it first. The reality is that the market is filled with it and even someone with a small budget can launch a business and in the long term make it big.

When the individual was a teen and mom or dad will not give more money for allowance, the person had to do some odd jobs. This could biking around town delivering newspaper early in the morning or mowing the neighbor’s lawn for extra cash.

The entrepreneur can use the experience to start a home maintenance company that offers grass cutting or cleaning services. If the place is covered with snow during the winter, snow plowing can also be offered to clear the roads and the driveways so the vehicles won’t be stuck in the snow.

After enough money has been made, this can be expanded by buying more machines and hiring additional personnel to get work done from the clients. Should the person be good with numbers, this can also be put to good use by helping others. The specialist can ask for a fee for helping people get the papers ready when filing for income tax.

The individual can even set up an office later on to offer counseling services to help people apply for financing when renovating the home or applying for financial aid in school.

Opportunities also come about by filling a certain need. Every year, more than a thousand printer cartridges are finished then thrown away. These things can be refilled making it useable again that could save hundreds of dollars are year that can be used on other expenses. The person can set up an ink refilling business given that the capital is quite small. The only things needed are a few empty cartridges, ink and a few tubes to get it inside.

The empty cartridges can be sourced from offices that are throwing these away that can be returned making it useable. The demand for these things is large so sufficient stock must always be available to cope with the orders. The demands of work can really stress a person out so those who have some cash can start a spa to give special massages and aromatherapy sessions.

The small business can first start with an extra room in the house that can be spread by word of mouth. The person can then rent some commercial space later on to take in more customers who need to relax and recharge those stressed bodies.

The key to any business is good quality and excellent service. Those that were just mentioned are a few good ideas that entrepreneurs have prospered in that could also happen for the person.

There are other small business opportunities out there that do not require a lot of capital to get it started. It will be a good idea to do some research first to find out if a return of investment can be made in the long term.

At the end of the day, the direction it really depends on the individual who will have to spend countless hours balancing revenue versus expenses in order to earn a profit.

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