Homes can be a much sweeter cash cow than you might have imagined; so much so, that it can become a sole source of income and a very profitable one at that.
One of the best ways to start is to get a professional consultant to guide you through the intricacies of rental property. An expert’s opinion offers the maximum chances of success and learning; especially if you’re just starting out.
Start small
Experts would recommend that you commence with already existent residential property or a single family house and work your way up. Get familiar with all the rigors that come with being a landlord as this business involves a lot more than just rent collection.
Choose your path
There are in fact many types of rental businesses that you can go for. You may specialize in high-end urban areas with all the newest facilities or you may prefer renting affordable accommodation. A lot of it depends on your skills and knowledge so first determine what you can excel in.
Depending on the kind of rental property you’re going for, there are other skills that you need to have. For instance, maintaining a residential property is the responsibility of the owner as opposed to commercial properties where maintenance is undertaken by the tenant.
With relation to tax
A rental property business is a passive means of income and does not come under the tag of self-employment. This business is still taxable though you can deduct the rent that you have not been able to realize. You can also deduct an amount for the interest paid in case of borrowed money which need not necessarily be a home loan.
A residential home renter must have the following skills
Repairs: As a landlord, it is your responsibility to get any repairs that may need to be done. If you’re the kind who stalls on repairs, this may not be the job for you. Being handy with some repair skills is an added bonus. Make a list of contractors and handymen that you can count on to do a good job in affordable rates.
Management: This job demands the ability to manage tenants and keep it professional: You’ll have to deal with any house related problems that will crop up from time to time. Tenants must feel secure and it is your choice to do it yourself or hire a manager.
Planning: Make a plan of what profits you expect from this venture and work towards it. When you start, you may require help to gather the requisite capital to buy property. You can easily avail of loans from your local bank or company like Cashfloat which provides you with easy to avail loans with convenient payback options.
Research ability: Once you zero in on a location, look into the local tenancy laws. Find out about the potential of any property by looking at the surrounding properties. If it is a highly developed area with proximity to stations, schools, public transportation, hospitals etc., you will be able increase the rent. A crowded locality in a prime location and a well developed area with scope for more development will have different growth rates so choose carefully. Similarly you can consider to buy property under upcoming projects to get price benefits. There are some leading names in the infrastructure and real estate industry like Godrej property, Azizi-Riviera in Dubai, Lodha Upper Thane in Mumbai or Riverfront-Residence in Singapore, some of market biggies. When you book an under-construction property, you get wider choices and more option to select from. You can choose allocation and even the floor of your flats as per convenience.
Dealing with vacancies
A landlord’s biggest problem is likely to be vacancies in between tenants. Exploit the possibilities of social media as much as you can as it is a major resource to find tenants and a meeting point where a few bad or good reviews can change your career options significantly.
As in every field, experience teaches best and so gain as much as you can. Give yourself two years to see if your property reaps you rewards. If you do well, your loan eligibility will also be upgraded and that will be a huge boost in gaining success faster.
A rental property business can be a sole income generator but the field is flexible enough that you can also choose to pursue other career opportunities with a little time management. With rental property businesses, the world is your oyster. Invest a little and keep getting a treasure in return.
