How to get started with renting out a property

Economy

Sep 072016

Renting out a property is a great income opportunity. clncy Project/CC BY 2.0

MANILA, Philippines – Renting out a house or a condo makes sense because it is a great way to earn good passive income. Who wouldn’t want to earn money without practically doing that much?

It’s not also that difficult. For one, 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 also convenient to advertise a rental property. You can just 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 with this business. Here are a few:

1. Are you ready to be a landlord?

While earning passively through a rental property often 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 family member, relative, friend or a professional property manager—take care of the business for you.

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2. Does your property look good?

The look and feel of your house, apartment or condo can make or break the deal. So, to make sure your property will attract the right tenants, make some preparations (and be ready to spend some money for this purpose).

Clean up, de-clutter, decorate or do some repairs before advertising your rental space. Are there leaks? Are the doors and locks working properly? Are there any cracks on the walls and ceilings? If the property is old, you might want to consider renovating it to make it an attractive livable space again.

And if you’re looking at buying a brand new space to let, consider location and value for money. For example, you can already make an investment for as low as P30,000 down payment with Deca Homes without compromising quality and comfort.

Just remember to factor into the rental fee the monthly payment and all your expenses on prepping your rental space, along with the upkeep and the cost of possible missed payments.

3. Can you trust strangers?

Another thing to consider is your market. Who will be your tenants? Are they going to be young families, students, expats or young professionals? Once you’ve defined your market, advertise your property. You can take advantage of online property listings and social media to get the word out. You can also ask friends for help in letting people know you’re offering a rental space.

But there’s obvious risk in entrusting your own property to strangers. For example, non-paying tenants are common in the business. To minimize risks like this, you need to screen your prospective tenants carefully. Know their background, reason for moving in, career, and the like. Don’t seal the deal with a prospective tenant if you’re not comfortable with him or her to begin with.

4. Are you ready for the legalities?

You should look up legal documents that you need to prepare for the deal, taxes you need to pay as landlord, housing laws, and other related policies mandated by the government.

Be ready to draft a contract as well. A written agreement between you and your tenant is a must. You might need legal help for this but the document must basically include the house rules, responsibilities of both parties, payment scheme, duration of rent or lease, and other specific agreements.

You see, renting out a property is a smart way to grow your money. But again, be sure to have ample preparation on time, property and money, among others, before venturing into this promising income opportunity.

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