Planning to start a rental business for your condo soon? There are many things you should know first. Check out these 10 considerations we’ve written down for you on starting your first condo rental business.
1. Amount of Capital
Your capital should be the first thing you should think about before anything else. A larger budget is needed to build your own condo rental business because of a number of factors, including the cost of labor, materials, location, and more. Be very careful. If you want to be able to earn a lot of money from your firm, you’ll need capital.
Before investing all of your money in a condo rental business, you could wish to save up additional money or apply for a loan if your budget would only allow for one space.
On the other side, if you have a larger budget, you could choose to rent out more rooms or flats. Also, if you have a lot of money, you can make your property look better so that it appeals to potential tenants.
2. Paper works for your business
Construction can begin as soon as feasible after your capital is in your possession and you have the legal rights to the land.
Be sure you get any official documents, such as building permits, clearances, and more, from authorities who have the proper authority in addition to the criteria.
In starting a condo rental business in the Philippines you have to register your business properly. If the structure is already complete, the condo rental firm should be registered with the Department of Trade and Industry (DTI), a government body in the Philippines, where it will be stated what sort of ownership the company is under and how much the rent is.
3. A business plan
An entrepreneur need to be astute enough to create a business plan that will aid him in the planning and execution of his venture.
For a condo rental property, the owner must develop a detailed strategy for every aspect of the flat he would rent out. He/She should consider the types of future tenants he/she is willing to lease a condo unit to, the number of people who can reside in each condo unit, whether or not pets are permitted, the house rules, and the amount of the monthly rental fee.
4. Make sure your condo is in a strategic location
When it comes to starting a rental property business in Philippines, one of the most crucial elements in starting a condo rental business is the location of the property because it will determine whether or not your venture will be successful.
In starting a condo rental business, you have to look for a strategic location. Location continues to be an important consideration in real estate. If a rental property is on your radar, this is especially true. There are already many homeowners who have entered the rental services. You must select a property in a good location if you want your condo rental business to succeed.
5. Need for unit renovation
Spruce up your condo if you want to rent it out. You must put your best foot forward when it comes to making your unit a visually appealing appearance because first impressions last a lifetime.
Interior design fundamentals are typically required to brighten up your place. To make your apartment look welcoming, pick the proper interior colors and purchase quality appliances and arrange furniture in the right spots. To avoid a cluttered appearance in condo units with few rooms, pick space-saving furniture pieces.
As a unit owner, before displaying your condo to a prospective tenant, it’s crucial to make sure that flaws like leaky pipes, damaged fixtures, and clogged drains have been rectified.
6. Find Out the Market Value of Your Condo
In starting a condo rental business you should also be knowledgeable about the most recent rental laws. You must stay up to date because the regulations governing how much you are allowed to raise rent and the eviction process are always changing.
Bfore starting a condo rental business you must be aware of the market worth of your condominium unit. Based on the valuation of nearby condo units.
This will give you a general idea of how much money you might be able to make from rental industry. It can also assist you in getting a general idea of the possible income your home might produce. Most significantly, it will assist you in determining a price that is reasonable for both you and your potential tenants.
7. Taxes and other government obligations
You should prepare your condo unit paper or documents. There are paperwork requirements for starting a condo rental business in the Philippines. You will also be required to pay a rental income sales tax to the Bureau of Internal Revenue (BIR). Make sure that all necessary paperwork is completed before leasing your real estate business to prevent future issues.
Also, you and your future responsible tenants need to draft a comprehensive contract. It should contain terms and conditions, the rental rates, and any other requirements they must meet while occupying your condo property. It would be best to have a thorough contract or written agreement because this will shield both parties from future issues and stop lapses.
8. Check out prospective tenants
When selecting tenants, be picky. Reject people who stand a good possibility of failing to honor their commitments. Refuse to accept anyone who is likely to subject your residence to excessive wear and tear.
It is unavoidable to have tenants who don’t pay their rent on time since they can be dealing with personal issues that make it difficult for them to pay their payments on time. Yet it is really disappointing, especially for the landlord or landlady who depends on the money from the renters to pay the bills.
To avoid dealing with the incorrect people, you still need to play your part by conducting background checks or evaluating the future tenant. Thus it will be smart to at least try to screen potential tenants before getting them to sign the lease. They must be able to demonstrate that they can afford the monthly rent and won’t cause any trouble in the community.
9. Fulfill Your Obligations and Duties as Landlord or Property Owner
The greatest method to ensure that your tenants uphold their commitments regarding the usage of your property is to make sure you, as the owner/landlord, fulfill all of yours too. Keep in mind that your rental space should be handled as a full-fledged business, and as such, you are required by law to uphold the terms and conditions of the contract you made with your tenant.
This entails not just providing what is required from oneself but also having the intelligence to recognize when expert assistance is required. For instance, it is your responsibility to get the electrical system of your room or building fixed, not to attempt to do so yourself. You instantly solicit the assistance of a specialist, allowing you to solve the situation quickly and effectively while also insuring the safety of all occupants.
10. Spread the Word
Lastly, on the tips and considerations to start a rental property business in Philippines, you need to let your contacts know that you are beginning a condo rental business. Reaching out to new tenants will be possible with the help of your network. Recommendations are also frequently desired because most landlords see them as a useful way to distinguish between excellent and bad tenants.
Moreover, advertising is still another choice. You can advertise your condo property through social media platforms. This will increase the visibility of your property and broaden your reach, helping you find a tenant quickly.