Owning properties for your own use, such as houses and apartments can translate into hundreds of dollars in maintenance, taxes, among other things. Whereas, if you have properties and you put them up for rent, the income you will get will help cover all of those expenses and it could also generate profits. This business plan will serve as a guide to successfully run a profitable rental property business.
Rental Property Business Plan
The main goal of a business like this is to start out from the very basics so the business can progressively invest in more real estate, so more options can be offered and more profits can be made. Of course, in order to own real estate, the company needs money to invest, and to turn properties into rental ones there are many legal responsibilities to take care of. This section of the plan explains how the business work and its main characteristics.
There are many potential customers with a business like this. On the one hand, people can rent from whole houses or apartments to individual rooms inside them. Rent can be for short or long terms, since some people are putting areas of their houses for rent for the weekend or for specific seasons. Rental Property as a business has no limits, but the landlord is the one who specifies the way the property will be rented. Positioning your business as a suitable option for both property owners and tenants will be the goal of this section.
There are many ways to operate a rental property business,and this section will explain all of them. Having a license will help the business increase the chances of getting more tenants. This part of the plan will also establish who will do the repairs and maintenance of the properties and many other logistic processes required for the business to run smoothly.
As mentioned before, the rental property business needs some sort of collaboration from the real estate world. The marketing plan idea is to put the properties on the map and that can be done by putting it on newspapers listings or online.
In this part of the business plan it is important to highlight that there are many different approaches to the rental property business. The business plan presents research and demographic studies of the business geographical reach to find out how the market works there. The business may target students, professionals or even newlyweds and the aim of this section is to outline who those people are, what they want and how your business fits into that.
The internet offers great ways to promote your rental property business. Places like AirBNB have innovated in this regard but aside from that, there are many digital strategies that will help your rental property business to grow and get customers. Traditional advertising like newspaper listings are definitely part of this too.
Renting places is a business that will never die due to the fact that most people don’t have the possibility to buy a house for themselves. This chapter of the business plan presents the financial projections of the company for the next three to five years including its revenues, expenses and main capital requirements to operate successfully and profitably.
The target that guarantees the most income is contemporary adults. They are most certainly stable at work; they know and understand the responsibility it takes to rent a place and the fact that they must keep it in good conditions. Students are also a mass amount of clients, but the rent fee in their case will not be as high. This chapter will explain the basis for the calculations of future revenues expected for the business.
This section of the business plan outlines the main expenses for the business which usually come from maintenance and repairs. These repairs must be done on a regular basis, but there are some other repairs, the unexpected ones, that are usually the most expensive and of course, unplanned. Along with these there are also rent, utilities and shared expenses that need to be met and this section will give you a guide to keep those in line.