Giving your apartment for renting is a sure shot way of ensuring continuous income. Apart from the little money that goes into renovating the space you intend to give out on rent, you do not need any large capital investment. With a lot of creativity and a clever business sense you can easily generate a good source of income for yourself within little or no time.
Here are a few renting business basics that you need to be aware of before you start giving out your apartment for rent.
- Capital- The shortage of capital should not be an obstacle for planning the House rental business. To start a rental business you must have land and the building from ground up and for that you must have capital. For gathering enough capital here are a few options you might want to look into
- Loan from friends, relatives
- Your savings
- Loan from banks
There is however one drawback of bank-financed loans that they require documents which may need a long time to complete.
- Property- You must choose the land for rental wisely. While purchasing the land keep the following things in mind
- Try to buy one with adequate transport access.
- Choose one near schools, establishments and points of interest
- Purchase land from a legitimate owner
- Make sure that the land is not on a major fault line
- Design- The amount of capital you are investing determines whether your renting space will be single storey or multi-storey. Before purchasing the property, conduct an intelligent search to make sure that the property has a clean title.
- Government License and Permits – Once you have the capital and the property make sure you have all the government clearances and permits form the respective government agencies. This will avoid any inconveniences in the future.
- Business Registration- Once the house/building is constructed
- Register the business at the Department of Trade and Industry (DTI) if it is a sole proprietorship
- If you are planning to put up a corporation then register it at the Securities and Exchange Commission (SEC)
- Get insurance for the property- It is always important to be prepared in case of any eventuality.
- You must get your property insured. It might be an added expense but that is compensated by the peace of mind you get knowing that your investment is secure
- Get insurance through an established insurer in the area with a solid track record.
- Draw up a lease- Before you rent your property to the tenant
- Draw up a lease by putting everything in writing for protection of both parties.
- Use the services of a good lawyer in drawing up the appropriate contract
- Screen Tenants- Make sure you only choose the tenants who are capable of paying rent and present the least property damage.
- Maintenance of Property- Giving your property on rent also requires you to maintain it regularly to ensure that it will last longer and give a higher return.
- Do a periodic checkup of the property
- Do not ignore the complaints of the tenants
- Get the repairs done as soon as possible