How to Start a Rental Property Business? 10 Tips to Start

How to Start a Rental Property Business? 10 Tips to

Investment in property is an investment that always provides benefits, but property investment also does not require a small fee.

For those of us who have more than one property, this is a great opportunity to make it a passive income that has great value. We can rent out the property that we own to be a source of income before we decide to sell it.

Right, but renting out property is also not easy, there are several points that we must pay attention to get a satisfactory price and of course quickly find tenants.

It is true that renting out property is not as complicated as selling a property. Renting out is relatively easier, but if you are not careful in managing it, renting out property also has many risks that can be detrimental. By paying attention to the following things we can avoid things that we don’t want.

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How to Start a Rental Property Business?

There are several ways to start a rental business property. Below are ways to start a rental business property that you should know.

1. Prepare Ourselves and Our Responsibilities

Renting out property is different from selling. Selling means we transfer all the responsibility we have to the person who bought it, so overall our property has shifted to someone else.

Meanwhile, renting we will remain fully responsible for the property that we own. Such as building taxes, building conditions, and other physical matters.

So it requires readiness and good financial planning or planning and a sense of responsibility so that we become good tenants.

2. Property Care

Before deciding to rent out our property, it is better if we pay attention to the physical condition of our property. What many people do is repair property when there are tenants. For this reason, they will take a rental budget to fix it.

This is not wrong but also a little less effective, how much we have to pay for improvements so that the funds we receive cannot be maximally used for future planning.

However, if we do regular maintenance, the property that we are going to rent will be relatively smaller.

3. Know the Rental Value

Knowing the rental value of property prices so that we do not get a low price below market price. Each area and type of property will greatly affect the rental price, so do a little research on the area where our property is located.

You can find out the rental price through an internet page that provides a lot of information on buying and selling and also renting. Or you can also consult your friends or colleagues who know more about the property.

4. Term of Lease

The rental period varies, but what is common for renting out property is the annual rental system. Especially for residential properties, we rent a lot on a yearly basis.

Renting on a per year system will make it a little difficult for us if we are going to raise prices at any time because we have to wait until the next year. In addition, many of us fail in managing financial planning from property income if it is paid out annually.

Renting on a monthly basis is a rental system that you need to consider. Besides we have the convenience of increasing it at any time for some reason, we can also easily allocate funds each month for maintenance, insurance, and other things.

5. Selective With Prospective Tenants

Renting out property also has several risks, including accepting tenants. We must be selective about tenants, it is indeed difficult to see the character of a person, but at least we must be selective in choosing tenants by knowing with certainty the identity and purpose of him renting our property.

Knowing your identity and having your data clearly are precautions that we must take. This is to avoid when the tenant commits actions that violate the law, we can become informants for legal officers if necessary besides knowing clearly the tenant can also avoid abuse of negative things.

6. Clear Contract Agreement

Make the contract agreement clearly and through the agreement between you and the tenant.

So that we can prevent misunderstandings in the future. Make sure tenants understand their responsibilities and obligations as well as us.

7. Using Deposit Money

To avoid damages that could occur due to tenant error. Putting on a deposit is one of the tricks you can do. So that tenants will be more careful when using our property. Because we will take the deposit funds if there is damage beyond the responsibility stated in the contract agreement

In addition, we also don’t have to bother collecting tenants for the damage. In addition, the tenant will also feel lucky because if there is no damage, we will return the deposit money in full to the tenant.

8. Always Change Keys

For security reasons, changing the lock every time a tenant change must be done. This avoids abuse and reduces the risk of crime.

Therefore, try to replace all the locks on the front door, fence, or other doors. Especially doors that have access to and from your property.

9. Calculating Property Costs

Perform financial planning from the funds you receive. Calculate the burden incurred each year and the maintenance you have to do regularly. So that tenants feel cared for and satisfied to be tenants.

10. Insurance

Sometimes property owners forget the importance of insurance for a property. It is very important that you do remember that disaster or calamity will not come with prior notification.

So it requires mental and material readiness. Ensure your property so that risks such as damage due to fire for example we can anticipate and the assets we have we can still protect.

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Take Advantage in the Property Rental Business

If we can manage it well, renting out property is also a profitable business and opportunity if we manage it well. In addition to the assets that we have always increase in value, the property can also bring profits from tenants who need our property.

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