Real estate has always been a good sector as far as investment is concerned and if you are not so happy with the way your stocks and shares are performing and you’re looking for alternatives, rental properties can be very profitable, with a reliable income, plus the appreciation of the assets.
Here are some important aspects of the rental property sector to take onboard if you are planning to acquire real estate with a view to renting.
- Building maintenance & repair– Houses need regular maintenance and when a repair is needed, the builder carries out prompt repairs. If you join forces with a good property management firm, they handle everything on your behalf. When you have tenants, repairs must be within hours not days, the last thing you want is an unhappy tenant.
- Minimise risk– Much like with any business, you need to minimise risk; taking out landlord insurance, for example, covers you for many scenarios and the policy can be tailored to meet your needs. Talk to a real estate lawyer regarding how to protect your business and they can give you good advice.
- Sourcing tenants– This can drain your resources, which is why you should make an alliance with a top property management firm. They screen all potential tenants and brief you, giving you the information you need to make informed decisions. It is important to check that tenants have a suitable income and do not have a history of unpaid debts. You have probably heard of nightmare tenants that cannot be evicted due to a legal glitch and to avoid this, you should screen potential tenants.
- Legal advice – When you use the services of a property management firm, they have 244/7 access to lawyers who specialise in tenancy issues. If you are informed of a complaint from a tenant, it is important to respond in the correct manner, so whatever time of day or night, you can talk to a legal expert.
- Business plan – Every business needs a plan that covers every aspect of the operation and the rental property sector is no different. Include a list of assets, plans for the future, sales and marketing, while also include an organisation flowchart that shows who does what. You would want to have an expansion plan that might extend to 10 years, whereby you acquire more properties over a period of years.
- Taxation– Of course, you need advice from a leading commercial law firm; they can minimise your tax liabilities, while ensuring that your business in structured to facilitate expansion.
With the right insurance cover in place and a good property management firm, there is every reason to expect your business to be successful. Start by writing a business plan, which helps you get a deeper understanding of the industry and what is required.
