“Quick Tips On How To Start A Home Rental Business” written by Mike Marko
Looking to learn how to start a home rental business?
Starting a home rental business requires a lot of work. Basically, there will be lots of paperwork at the beginning.
But once you’re done registering your rental business, things do get a bit easier.
Knowing what to do during the startup phase of your home rental business can prevent mistakes that lead to problems later.
That’s why it’s a good thing you’ve decided to look for some tips on how to start a home rental business.
This blog post about how to start a home rental business can help you during your startup phase. Here, you’ll learn all you need to get past the thorny first steps of this endeavor.
Learn How to Start a Home Rental Business Easily
How to start a home rental business? There’s a lot of things to do, as I said earlier.
On the bright side, getting this part right can make your path much smoother later on. That’s why it pays to do your due diligence when you’re getting started.
I’m going to help you with that. In this guide, I’ll show you what to do until you have your first tenant.
So let’s get started! Here’s the first step on how to start a home rental business.
Study the Home Rental Business
How to start a home rental business? First, you need to learn all you can about how a home rental business works.
Giving yourself a background about this business can help you avoid failure. It tells you what to expect, how to calculate expenses and profits, what economies to take, etc.
Studying the business model of home rentals helps you prepare yourself. Keep in mind that being a property manager or landlord is more than just accepting tenants and collecting rent.
There are a lot of things that you should know to have a successful home rental business. You can check tons of blog posts (including ours) on the Internet about how to start a home rental business.
Aside from that, you can also consult professionals who have knowledge in running a home rental business.
Consider joining a club for property managers or landlords. This will help you meet other property managers near you.
Ask the other property managers what you should expect in your upcoming rental business. This will give you an idea of how to start a home rental business.
Determine Your Target Tenants
How to start a home rental business? You must determine your target tenants.
Pick your target tenants before you start your rental property business. Knowing your preferred tenants will help you create the best business and marketing plan for your property.
You can also arrange the rental space properly if you know your target tenants.
If you prefer to rent your property to students or office workers, it’s best to divide the property for multiple tenants.
If you plan to rent the property to tenants with families, think of the utilities or other spaces that they can access.
Knowing how to provide for tenants’ needs in advance is crucial to how to start a home rental business. Properly distributing the rental space can help you earn more.
However, the type of tenants you can get also depends on your property.
If you have a residential house with small individual rooms for rent, you can have student tenants or singles working in the area.
On the other hand, you can find tenants with families if you have a residential building.
Get Help From Rental Lawyers
To know how to start a home rental business, consider getting help from rental lawyers.
Keep in mind that there are rental laws that you need to follow. Even if you know some rental laws, you should still consider getting help from lawyers.
Beginners like you should get assistance from rental lawyers, they can help you in a lot of ways.
They can help you set up your home rental business, register your business, and they can give you advice in preparing your rental property.
In addition to that, there are building codes that you need to follow. Even residential rental properties have certain building codes.
Consult a rental lawyer and let them inspect your property. Follow their advice and make the necessary changes. That’s how to start a home rental business.
You’re going to have a hard time getting tenants if you’re not following building codes and rental laws.
Apart from that, you could also face litigation or legal penalties if you’re violating the rental laws in your area.
Advertise Your Rental Property
If you want to know how to start a home rental business, you should also learn how to advertise your rental property.
Once your property is prepared for renting, the next thing you need to do is advertise your vacancies. When you’re doing this, be sure that your advertisements are aimed at your target audience.
You can use traditional ways of advertising a rental property. You can give away flyers in your community and post ads in newspapers.
Also, you can post the rental listings on the Internet. Make use of social media too, as this can help your potential tenants find your rental business easily.
Posting ads on social media platforms are cheaper than traditional advertising.
Apart from that, it can also help you get tenants immediately. Many people use the Internet to find what they are looking for.
There are also websites dedicated to rental listings. Here’s a list of websites where you can post your rental listings:
- Zillow Rental Manager,
- Apartment List,
- Homes.com, and
Posting ads on those websites can help you find your first tenant in no time.
When posting ads, be sure to set the right rent, by the way. You can check the rent rate in your area. That’s how to start a home rental business.
Just avoid charging too much, as this won’t help in attracting potential tenants. Don’t undercharge either, as you might end up losing a lot of profits.
Look for Tenant Screening Companies
How to start a home rental business? You should also find tenant screening companies.
You need to find a reliable tenant screening company. You need to do this before you interview your first tenant.
The tenant screening company will help you determine if the potential tenant is good enough for your property.
Apart from choosing tenants, here are other reasons why you need to hire a tenant screening company.
Reasons Why Tenant Screening Is Important
The tenant screening company helps you validate the information in the rental application form of the potential tenant.
Verifying the information will reduce the risk of having a criminal or a bad tenant inside your property.
That’s how to start a home rental business properly. Avoiding any kind of risk is a must.
The tenant screening allows you to keep your tenants safe. You could face legal consequences if you put the lives of your tenants in jeopardy.
You’re putting tenants’ and your own safety in danger if you are allowing tenants who didn’t undergo a background screening. That’s not how to start a home rental business.
You have to make sure that every tenant in your property is not violent. Avoid any casualty or any crime that could possibly happen inside your property.
Lastly, tenant screening companies could also help in reducing the risk of major loss of income. The tenant screening process can help you avoid tenants who don’t pay their bills on time.
Apart from that, it can also help you avoid tenants who will damage your property.
The key point here is that history repeats itself. Knowing the financial and rental history of a potential tenant gives you an insight into their behavior.
That’s how to start a home rental business: you need to know your tenants first.
What to Look for in a Screening Company
There are a lot of tenant screening companies nowadays. That’s good news for those learning how to start a home rental business.
So how do you pick a screening company? First, check their reviews. The best tenant screening companies should have largely positive reviews from verified clients.
Second, look for a company that delivers the data you need quickly. You want information within one week of submitting a request, for instance.
Third, look for a company that has flexible offers. Some tenant screening companies only offer background checks that, while comprehensive, are also very costly.
The fact is, you don’t need to know where a person went to high school to figure out if he’s a good tenant or not. Just look for a company that offers packages for background checks where you pay only for relevant information.
Prepare a Premade Rental Agreement
How to start a home rental business? You also need to learn how to prepare a premade rental agreement.
You need to provide a rental agreement before the tenant moves into your property. This is needed to ensure that the tenant agrees to your terms and policies for renting your property.
Each tenant needs a specific agreement. This is based on what you both agreed on.
But to save time in creating a rental agreement, you need to prepare a standard one. Then, you can just add to or take away from it on a case-to-case basis.
To give you an idea about it, here’s the information that needs to be added to your rental agreement:
Details about the Tenant and Rented Property
If you want to know how to start a home rental business, you should learn this too.
A premade rental agreement must contain the names of all the individuals involved in the tenancy, and that also includes you.
Apart from the names, various verifying information and contact details must be given as well.
A description of the rental property is also written in a rental agreement. The details are can be as simple as the address of the property and unit number.
Knowing that is important if you to learn how to start a home rental business.
Most agreements give a detailed description of the property. This gives the tenant an idea of how they will leave the property at the end of their tenancy.
Just be sure to leave the name of the tenant blank so you can edit the premade rental agreement easily.
Details about Rent and Other Fees
Your premade rental agreement should contain details about fees and other payments. Give details regarding the security deposit, amount of rent expected and due date of the rent.
Also, include certain actions that could cause an assessment of additional fees. For example, paying rent late or disturbing other tenants.
When adding this to your agreement, be sure to specify your preferred method of payment. Give details of how the security deposit will be used to avoid misunderstandings.
Knowing that is important if you to learn how to start a home rental business.
Responsibilities for Maintenance and Utilities
How to start a home rental business? You need to know your responsibilities for maintenance and utilities.
Always add the maintenance responsibilities of both parties when you create a premade rental agreement.
The responsibilities of maintenance are always on the property manager if the tenant chooses to have a rental agreement. You should know that to learn how to start a home rental business.
Rental agreements are given for a short tenancy. A rental agreement usually lasts for 1-3 months.
Tenants usually just pay for maintenance and utilities. Those fees are added to their base rent.
However, this still depends on your agreement with the tenant. If you share responsibility for maintenance, be sure to specify it in your agreement.
In addition to that, state the appropriate response time that you and your tenant must follow when a repair or maintenance is needed.
In your rental agreement, explain that both sides must adhere to their responsibilities for keeping the rented property in good condition. Failing to do so would result in major consequences.
Be sure to specify the consequences if both parties fail to follow the terms and clauses in the rental agreement.
Final Thoughts on How to Start a Home Rental Business
In this blog post, I talked about how to start a home rental business.
To start a rental business, you need to learn how this industry works. Know the do’s and don’ts. Make sure to study rental laws in your area as well.
Once you’re done with that, learn how to advertise your rental listings and choose tenants. You should pick tenants carefully because the success of your rental business depends on them.
Lastly, if you want to know how to start a home rental business, you should learn how to prepare premade rental agreements. These can simplify the process of making a tenancy contract legal.
If you have more questions about how to start a home rental business, leave them in the comments below.
If you need help marketing your business online then check out IM Consultant Services.
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