Steps To Success For Your New Property Rental Business
By Business Desk
Tuesday, July 19, 2016.
Setting up a rental property business can be an excellent way to earn some extra cash, and strengthen your investment portfolio. However, it’s not as simple as just buying a building somewhere and renting it out for significant returns.
There are a few important things you need to ensure your success - just as there is in any other investment scheme. We’re going to go through some ideas with you today and give you some of the essential tips that can ensure your success. Read on to find out more.
Focus on your pricing
It doesn’t matter how nice your apartment, home, or building is - the rent you can charge will be set by the surrounding area. Yes, you will be able to bump it up a little if you provide excellent facilities. But you have to take into account the rent of every other property in your locale. Let’s say you are renting out an apartment in a rundown area. Your rent charges have to reflect the going rate, or you will find it hard to fill the property with tenants.
It sounds simple, but there are so many unfriendly, unhelpful landlords out there that just being nice can make a big difference. Be interested in your tenants, and always respond to their questions promptly. There will be the odd resident who likes to complain, of course. But, your main aim is to keep people in the building, not start unnecessary fights.
Make sure your contracts are watertight, and outline all expectations of the tenure. Getting everything in writing ensures that everyone knows where they stand - and you should do it as soon as possible. Renting out rooms, homes or buildings is a business relationship. And, a good contract is a perfect way to cement that relationship.
Screen potential tenants
It’s a wise idea to screen any prospective tenant before you allow them to rent out your property. No matter how nice and trustworthy they appear, you just can’t guarantee anything. You might want to run a credit check on their finances, to ensure they have the ability to pay. You can also use a criminal records lookup service to see if there is anything else you should know about the person concerned. Just make sure that you are open and honest about your procedures, and tell your tenants you intend to run these checks. This way, everyone will understand what is at stake. And, you will give your residents the opportunity to explain their situation first.
Create a tenant’s handbook
One of the biggest costs for landlords is repairing and maintaining their property. However, you can cut these costs back by a significant amount by creating a tenant’s handbook. In it, you can explain how everything works, and outline your expectations. Include phone numbers for them to call if something goes wrong, and also make it clear who is responsible for minor repairs.
These little tips can make all the difference when it comes to cutting back your costs and improving your chances of success. Winning the rental property game takes a close look at the fine margins - we hope this advice helps you on the way to success!