A rental property business will average more than six percent in appreciation over 10 years. In addition to profit, there are also a lot of other benefits to having a rental property business.
But before you jump into the real estate business, it’s important to understand what it takes to start a rental business. You should know the location, how to be a landlord, and other requirements.
If you’re interested in becoming a landlord and having multiple rental properties, here’s a guide that can help you out.
Don’t Start Huge
One of the best things you can do as a beginning rental property business owner is to start small. Don’t overbuy property that will make it more difficult to manage.
You can start by investing in some condominiums instead of larger properties. Also, the more properties you have, the more maintenance required.
When you start small, you also gradually understand the process of a rental business. You understand the process of getting to know tenants, how to price your rental, as well as other parts of having a rental business.
If you eventually expand your rental business, you’ll need to find trustworthy employees and how to manage HR-related tasks. To make it a bit easier, here’s a free check stub template.
Do the Market Research
When it comes to market research, it’s important that you try to figure out as much research as possible about in the niche you are in.
It’s especially important that you know a lot about your location. You should know the average rental property price, the demographics of the area, the crime rate, and what makes the location an attractive place to live.
One way to do market research is to look at comparable rental properties and see how they operate their business. It not only gives you insight on price, but it’s important to see how your property will do better for tenants in terms of walkability, nearby businesses, etc.
How Much Will You Charge?
The final consideration you need to make when have a rental property is pricing. How much tenants pay will determine the quality of your property and how it compares to other rentals.
A lot of rental property owners charge between 0.8 and 1.1 percent of the home’s value, but it also depends on what you think you can charge, even if it’s outside that range.
It’s important to remember that you will have to keep a separate fund for maintenance and property damages if the tenants trash your property.
Why a Rental Property Business Is Worth It
A rental property business is worth it because if you do it right, you can accumulate passive wealth. You can also have a hand in the housing market, which can give you an opportunity to sell high.
Finally, Having a rental property business gives you the opportunity to build a business. It gives you an opportunity to grow your investments.
For more information on what it takes to manage a rental business, visit our website.
