Many people underestimate the income-generating potential of their assets. An asset is a valuable possession that you own which can be used to generate money. These can include anything from your house or cottage, vehicle and machinery to collectable items, such as jewellery and art. A skill, such as sewing, is also considered to be an asset.
Wilfred Moyo from Metropolitan gives us some tips on how to get the most out of your assets:
Know your assets
The first step in making your assets work for you is to identify which of your assets can generate an income for you. Let’s take property as an example. You could rent out your cottage or back room.
Identify opportunities to use your assets
Do some research to find opportunities in the market. Consider which of those market opportunities you can take advantage of with the assets you have. Continuing with the previous example, if there is a demand for cottage rental properties in your area then you can rent out your vacant living space to make extra money.
Investigate all the aspects of renting out your property and what you would need. For example, how to draw up lease agreements, finding good tenants, tax, etc. You will be better informed to make the most of the opportunity.
Put your assets to good use
You can now make your assets work hard for you by turning them into income-generating opportunities. By renting out property space on land that you own, you can use the rental income to pay off your bond quicker.
Reinvest your extra proceeds
If you’re in a position where your asset is generating extra money, it is a good idea to reinvest the proceeds into your asset or business. Consider building an extra room onto your granny flat to get even more rental income.
“Gaining assets can be a big financial commitment, but if used wisely, they can be used to generate an income. It is all about identifying opportunities where you can exploit your assets for financial gain. Try to seek advice from people running similar ventures and draw on their experience,” concludes Wilfred.
