Property Rental Business Idea
Learning how to start a property rental business begins with a willingness to work hard and conduct research. Rental property businesses can be highly lucrative. If you are willing to learn and invest in the business, the rewards can be many.
If you have previous real estate or rental property experience, starting your own rental property business may be the perfect match for your expertise and desire to own your own business.
How to Start a Property Rental Business
As you think about how to start a property rental business, the first question to answer is which method to choose. You can purchase your own properties and rent them out yourself or you can manage the rental properties of others.
Purchasing Your Own Properties
If you have the money or financial backing, purchasing your own rental properties can result in high dividends. Owning your own rentals requires that you show apartments, meet with prospective tenants, handle all leasing and rental issues, maintain the properties, and take full responsibility for every detail of owning rental properties, including tax liabilities. Many states require that you have a real estate license to legally conduct business.
Managing the Properties of Others
Managing for others requires much less capital and is a business that is well-suited for working from home. Many apartment and rental property owners are unable to manage properties themselves. The financial responsibility is still with the property owner, but day to day operations fall to the managing company.
Managing rental properties involves many of the same duties that property owners must perform. Getting leases signed, meeting with tenants, showing empty properties, handling building maintenance, and dealing with tenant complaints, evictions, and related problems are all part of the job. As a business service provider, the income will naturally be lower than if you owned your own properties, but so are the costs and risks.
Before going into business, research the landlord/tenant and compliance laws in your state to ensure that you have the required knowledge about current rental codes and anti-discrimination laws. Learn how to properly administer lease agreements and the legal requirements of being responsible for rental properties.
Check with your local licensing agencies to find out what licenses and permits are required.
Finding Properties and Achieving Success
If you are purchasing properties, search the newspaper classifieds and local real estate ads to discover which properties are for sale. Look for properties in your price range and are located within a reasonable distance. Remember, you will be spending a lot of time driving from home, to the property, and back again.
If you plan to manage properties for other people, contact apartment complex owners and let them know you are available. Owner information is a matter of public record and can be found online or at the local library.
Much of your day to day work will involve working with tenants. Some of these encounters may be unpleasant. Treating people with respect and kindness can go far to diffuse volatile situations. Excellent communication skills will be required.
Your level of success depends on how well you keep your properties maintained, the way you treat tenants, and intelligent management practices.
There are several ways to expand and increase your income after you move from how to start a property rental business to making money doing it. Some of these include:
- Property managers could think about buying and managing their own properties.
- Property owners could purchase additional rental properties.