Many people dream of owning a rental real estate property that makes money each month and grows in value. Sounds great, right? The idea of “earning money while you sleep” is why many investors enter the rental market.
But here’s the truth: success in rentals doesn’t come just from buying a property. It comes from buying the right real estate property, in the right location, and managing it well.
Here’s how to start a real estate property rental business from the beginning:
1. Determine your objectives
First, think about what you want:
- Monthly cash flow from rental income
- Value appreciation in the long haul
- Or a combination of both
Once you know your objectives, you can start the process of selecting the investment class you want and also narrow down your search for where to invest.
2. Investigate the market like a detective
Before you spend your money, do your research:
- Find out what areas have strong and consistent rental demand.
- A few of the statistics you will want to uncover are vacancy rate data with low ratios.
- You should also investigate what developments are pending in the area that could affect property values.
If you skip on your research, you run the risk of ending up with a vacant property for months that generates zero cash flow.
3. Find the Right Investment Property
This is the critical step that will determine your investment’s success. When you are looking for property, look for:
- Location near schools, public transport and employment
- Property type appropriate to your target tenants e.g., a 2BHK apartment for working professionals
- A price that enables a positive rental yield to allow for expenses
4. Secure Financing
If you are not buying with cash, you will need to look around for bank loans/mortgage offers. It can pay to shop around, as even a small difference in interest rates can save you thousands over the life of the loan.
5. Make it Attractive for Tenants
You only get one chance to make a good first impression! Make sure the property is clean, freshly painted and well lit and in the case of furnished, use modern, durable furniture, which will help justify higher rents.
6. Set the Rent Smart
Too high = added vacancies.
Too low = money left on the table.
Look at local rates for comparable rentals to set a fair price that covers expenses and allows for profit.
7. Market it everywhere
Put your ad on the major portals, share it on social media, and talk to local real estate property agents. Good pictures and a good description stand out.
8. A solid Lease
Your lease agreement should specify the rent terms, deposit, maintenance and the rules for tenants. This protects you and your tenants from future conflicts.
9. Manage like a pro
You can self-manage the property, but most people will turn to a property manager to manage rent collections, maintenance and tenant issues. Good management means happy tenants and less turnover.
10. Think Bigger
Once your first real estate property is operating smoothly with tenants, it is time to reinvest those profits into another property. As time goes by, your portfolio increases, your income increases and your income security increases.
Final Thoughts
The rental business isn’t a get-rich-quick scheme; it’s like planting a tree. You give it time, you nurture it and a few years down the line, you will be sitting in the shade and enjoying the fruit from your investment.
As long as you establish it right, manage it well and continue to grow, your real estate property portfolio can become a wealth-generating machine for many years to come.
💡 Are you located in the Tricity (Chandigarh, Mohali, Panchkula) area and looking for professional assistance? Anmol Empire offers comprehensive real estate property services, from helping you find a high-return rental investment to managing tenants and maintaining properties. With their local knowledge, you can save time, increase rental yield and save headaches.
