Renting out a house or a condo makes sense because it’s a practical way to earn good, passive income.
It’s not difficult. Investing in a property has become easy on the pocket with competitive prices and attractive payment schemes that real estate developers are offering in the market these days.
It’s convenient to advertise a rental property. You can simply go online and get in touch with a property listing website where people can easily find your property.
But there are things you need to consider as you get started. Here are a few:
Ready to make the jump?
While earning passively through a rental property looks easy, being a landlord is not as simple. You will have responsibilities and need to carve out some time from your routine to fulfill your obligations.
As a landlord, your responsibilities include maintaining your property, building rapport with your tenants, arranging the paperwork and collecting payments. But if you don’t have enough time to take care of these things but still want to make money from a rental property, consider having someone—a trusted family member, relative, friend or a professional property manager—take care of the business for you.
Study your neighborhood
Once you spotted a property and eventually acquire it, study your community as this is your immediate market. For example, a 3-bedroom condominium unit is not exactly saleable to students living in the university belt: the cost will not be within their budget.
Study establishments around you
Check those establishments one ride away from your property to see what is around. Leverage them to help make your property saleable.
Know your product
Not all properties are equal. What might be appealing to a prospective buyer might not be to another. Real estate is volatile but if you know how to play the game, it’s a steady investment.
Do not overprice
Property investing is best played long-term. Your price has to be fair with your tenant, especially if you want long-staying tenants. As much as you can keep my rent at the same price, keep it.
Furnish your unit
Have a single theme. Say, you want a unit to appeal to Makati yuppies working at the central business district (CBD), you can renovate the unit and jazz it up with solid, complementing colors, fitted it with matching furniture from the sofa to the bed to the bar sink. Have the toilet and bath installed with glass partition and a hot-and-cold shower.
Create lots of storage
A tiny storage room can get more space when mounted with shelves. You can also create more storage in a unit by setting up creatively fitted beams and counters. These can serve as a breather and space-saving feature. Condominium units are, by nature, small, thus extra storage is something to be thankful for.
Do not buy cheap and flimsy furniture
Good properties need significant money to purchase, and beautifying and maintaining them need more money. In the long run, it can be a good source of cash flow as well as capital appreciation.
A transformed unit can bring in good income from a long-staying renter. If a renter is happy, it’s a win-win situation.
Attract renters
Take beautiful photos. Use the HDR (high dynamic range) feature of your digital camera or smartphone camera to take photos of your rental property. Take pictures with lights on to emphasize the interiors, and lights off for the view to help make your rental property more attractive even in photos alone.
Create a sales pitch
Your visuals must be complemented with an effective sales pitch. You must be ready with a short, direct-to-the-point presentation or an elevator pitch highlighting your rental property’s unique and value selling features.
Use media. The traditional media, i.e. classified ads in the newspaper, is still the easiest for prospective renters with every detail already printed. With online ads, renters have to search using keywords until they stumble on your ad. But the use of social media and sites dedicated to home buying, renting or property selling and investing to advertise your rental property, can reach more prospective renters.
Send out direct mailers
If your rental property is located in nearby offices, send direct mailers to their HR departments and ask them to spread the word that you have an available unit. This selling strategy works because those departments know who among their employees are looking around for a nearby place to rent.
Open house
Send invites to the people in your building since they are your first market.They may know a prospective renter. Invite them to view your place. If there are those who come and are interested, you create an urgency.
Stage your unit
Make sure the details that are easily seen or are particular to a prospective renter are taken care of. Keep the entrance clean. Leave no broken items unfixed. De-clutter. Let the lights in. Have a clean toilet and bath, which is a come-on for prospective female renters.
Hold a viewing or an open house at night. This is a good approach as it helps create a mood. Host the open house personally if you can: it helps create a personal connection between you and the prospective renter.
Protect yourself
Have a detailed lease of contract. The lease of contract must clearly state the details and conditions involved in renting your property. Make sure the renter understands them to help avoid headaches in the future.
Screen your tenants
Get referrals to help you check those prospective renters.
Take care of your tenant
Treat each tenant as your best customer.
