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Start A Rental Business
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By: Scam Risk - Expert Reviewer
How To Start A Rental Properties Business (2021 Update): Everything You Need To Know!
Antoine de Saint-Exupery once remarked that a goal is nothing without a plan.
The best plans have been known for helping people from every industry reach their goals, no matter how lofty.
A well-crafted strategy is an excellent tool for any professional. Real estate investors are no exception.
Buy-and-hold investors are more likely to have a long-term positive outlook if they create a solid rental property business plan.
In this review, we’re going to cover everything you need to know about how to develop this plan.
As a matter of fact…
What you’re about to learn is the same information that has helped more than 73% of our readers with their questions about how to get up and running in the rental properties business.
But, hear me out first…
Even, though you might have some pre-conceived notions about rental properties… when you’re finished with this review, you’ll breathe a little bit easier because whatever decision you make will be the best one for you.
And towards the end of this article, I’ll answer some of the most frequently asked questions about how to start a successful rental property business and other online alternatives.
But most importantly, you’ll be shown a system that many investors have used to build their own business to over $40,000+ per month in mostly passive income.
Table of Contents
How To Start A Rental Property Business
The process of starting a rental property company is not that difficult. Investors must identify the key elements that will help them build their business.
Below are the steps to take when creating a rental property business plan or becoming a real-estate entrepreneur.
1. Join A Real Estate Investment Club.
A local association or club for real estate investors can provide networking opportunities. This may be a great way to help rental property investors find partners or anyone who could help them with their rental property business plans.
There is no reason to believe that new investors, especially aspiring landlords, won’t find help at a real-estate investor club.
These meet-ups are designed to assist their members, and there is always someone who can help. Investors will get insight into local professionals, who most likely are already doing what they want.
2. Pick A Niche & Choose A Market.
Picking a niche to invest in is often more important than what capital or experience investors bring to an investment decision. It is the golden rule in real estate: location, place, location.
The choice of where to invest in rental property is probably the most influential factor that determines a landlord’s success. The location is key to finding income-producing properties.
It will impact the property’s demand and price, as well as its long-term prospects. To have a successful rental property business plan, you need to answer these questions.
- What are my plans for investing in a distant market?
- Am I able to have a team to deal with the day to day or will I have my own to do it?
- What is the cost of my commute to work and market research?
- How stable is a market’s economic environment? Are there many business segments that can support jobs and businesses? Is there a principal employer?
- What is the market average for property acquisitions?
- What is the average rental price?
Although there is no requirement that investors live in the market they are investing in, it is not a good excuse to neglect to do thorough research on the local housing market.
Investors must know everything about each area and the particular niche they will be serving to make a successful investment.
Investors should know the renters of the places they are interested in investing. A niche is a way to target specific audiences, similar to single-family or college housing.
At this point, investors in rental properties should determine who they will target. Only then will they be capable of tailoring their rental property business plan to meet the needs of their customers.
3. Figure Out Financing For Your Rental Business.
Rental property investors face the most significant hurdle: securing financing. Financing a real estate deal can be as easy as some investors believe.
It turns out that many lenders are waiting to lend money to savvy investors looking to invest in realty. Real estate investors today have more funding options than ever before.
In particular, private money lenders and hard-money lenders are synonymous with the best ways of securing funding. Investors are just as eager to work together with them as lenders.
While these “alternative sources” tend to have higher interest rates (often three- to four times more than traditional banks), the extra cost is well worth it.
For the higher rates, investors receive the money they need to close a deal faster than through a bank.
While banks can take several months to distribute funds, alternative lenders can get the cash in investors’ hands in just a few days or even hours.
Also, it is essential to remember that financing must be secured before the investor even begins looking for a house. Investors will be able to know how much they can afford and what investments are worth exploring.
4. Conduct Research & Hire A Property Manager.
Being a landlord will require that investors take responsibility for the maintenance and appearance of the rental property.
It doesn’t really matter if an investor is handyman or not. However, it’s strongly recommended that they hire professional property managers.
A third-party property manager is an integral part of a rental business plan. While it is beneficial to be able to fully understand the property, it is not necessary.
Investors may be able to expand their portfolio without having to spend countless hours working. Property managers will manage everything for you, except finding tenants.
Property managers can ensure everything runs smoothly. They have the task to find tenants and collect rent. Investors can continue to grow their passive income stream and add more assets to the portfolio.
5. Systemize.
Investors are responsible for maintaining the property’s appearance and function as landlords. It doesn’t really matter if an investor is a handyman or not.
However, it’s strongly recommended that they hire professional property managers.
Although it’s helpful to have in-depth knowledge about the subject property, hiring a third-party property management company is a crucial step in any rental property business plan.
Investors could expand their portfolio without needing to put in countless hours of effort. A property manager or sometimes a real estate agent will handle everything, even finding tenants.
Property managers will make sure that everything is taken care of. Their job is to find tenants and collect rent.
The investor has the freedom to add additional assets to their portfolio and increase their passive income cash flow.
6. Manage The Properties.
The management of a rental property involves more than simply hiring a manager. It is also about creating systems to ensure that the properties are in good order and cash flows in. It means answering questions such as:
- Will you be a landlord or a property manager?
- Will you hire a property manager?
- Who will search for and select tenants?
- Are you willing to do repairs?
- Will you hire a contractor?
- Who will take care of yard maintenance and other duties.
Your budget and time are critical factors in determining your answers. It is essential to have a rental property business plan that maps out all management systems.
Why Write A Rental Property Business Plan
When you’re learning how to navigate the real estate industry, a well-crafted business plan can be a great help. You can create a business plan that outlines your goals and mission.
The reason you are investing should be included. This will help you remain focused when you make an investment decision and grow your business.
Your business plan can be thought of as a roadmap to your success.
Business plans are also beneficial when talking to potential lenders, designing advertising campaigns, or hiring new employees. It will make these tasks easier if your business plan clearly outlines what you do (and how).
You will probably need to explain your business goals when you start raising money for your first deal.
A business plan can ease the burden as it will already contain all of the necessary information. Writing a business plan can be an excellent first step if you’re thinking of opening a rental business.
How To Write A Rental Property Business Plan
While starting a rental property company is one thing, learning to plan a rental properties business is another. The two may sound identical, but the latter is an important step that will make the former even more powerful.
It is essential to understand how to start and run a rental property company before starting one. Investors should learn the most crucial steps first.
- Create a vision and mission statement.
- Set passive income goals and business objectives..
- A team structure that encourages success is essential
- A high-level overview of the company in its entirety
- Marketing systems and funnels that target a specific audience should be developed
1. Vision & Mission
An excellent plan for a rental property business must focus on one thing above all else: the vision or mission of the investor.
Investors may find it motivating and helpful to plan what they hope to achieve through real estate investing. Investors need to take a moment to consider why they invest. Is it to retire quickly? Is it to spend more quality time with friends and family? Or is it both?
Knowing the “why” of investors will help them create a sound business strategy. One that brings them closer to their goals.
A person without a mission will not know which direction to take, which can be detrimental for any rental property company.
2. Passive Income Goals
Passive income goals, while closely linked to one’s vision and mission, identify the amount of cash flow that will be required to satisfy investors’ desires.
However, passive income goals should help investors fulfill their own mission. Passive income goals should be high enough to allow an investor to retire comfortably.
Every person’s passive income goals are different. However, a good rule of thumb is determining how much cash flow they will need to maintain their lifestyle.
Goals should be achievable and relevant to the reasons for which someone is investing. Many investors will be discouraged by unrealistic goals. A strong motivator is the feeling of accomplishment that comes from achieving a goal.
It is also essential to determine your passive income goals. Residential Commercial? Multi-family? It is best to start from the beginning and work backward to get better results.
3. Structure
Many investors might hire a team when starting a rental business. As they say, many hands do light works. A common goal is more likely to be achieved if investors work together with other qualified people.
In addition to this, hiring a competent and experienced real estate team can help investors earn more passive income by removing themselves from the equation.
However, it is not enough to just hire anyone. Employees must be able to bring something to the table. Investors must hire a team that complements their talents, not that duplicates them.
The team structure will be more diverse and capable of completing more tasks.
4. High-Level Overview
Investors should focus on the potential for a single investment property and consider the possibility of an entire portfolio.
An individual home may produce positive cash flow levels, but a whole portfolio could help investors achieve financial freedom.
You must remember the “bigger picture.” While one home can generate positive cash flow, an entire portfolio can lead to financial freedom.
However, plans should be flexible enough to scale. It is essential to consider future growth when planning a rental property business.
5. Marketing
A rental property is only one step of a passive income investment journey. Investors will need to know how to find tenants who can bring in the cash flow. Investors will most often rely upon their property managers to fill vacant properties. There are several ways to find tenants if an investor doesn’t hire a property manager.
- Sites that rent homes
- Social media
- Newspapers/print media
- Local bulletin boards
- Local Realtors
- Word-of-mouth marketing
- Direct mail campaigns
- Previous renters
Is A Rental Property Business A Good Investment?
Investors will know whether a rental investment is a good one if they have a positive monthly cash flow. A solid rental plan is essential for any real estate investor.
They must do their homework and make sure that they find a good investment property. You can get an idea of how much a property could profit by using several measurement options.
Summary
Confidence does not simply refer to positive feelings based on affirmations, mantras, and “feel good” phrases. Webster’s Dictionary defines confidence as “the feeling of being certain about something.”
A rental property plan can be a great way to increase your confidence. If you can map out your exact goals and the systems you’ll use to achieve them, wealth-building goals will be easier than you thought.
What Is Our #1 Recommendation For Making Money In 2021?
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, because it’s all digital.
With digital real estate, you have the opportunity to completely walk away from your 9-5 job!
Sound too good to be true?
Of course it does!
But it isn’t…in fact, business owners wish they had this skill!
What exactly is the skill?
Well, basically you are acting as a conduit for small business to increase their bottom line.
What we mean is…
You are helping these businesses grow!
But how?
All you have to do is build and rank a website and forward certain service requests off to a business owner in town… you could even email it to them!
This works for literally any service based business… ie: tree service, plumbing, towing, etc.
How Do You Get Paid And How Much?
Simple, after you forward the jobs off to a business owner and he makes closes the deal, you simply ask to agree to a WIN-WIN arrangement.
A fair price to charge per lead, depending on the industry is 10-20%… let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 20 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $1000 a month!
See why they call it digital real estate now?
That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to answer the phone…all you have to do is get the phone to ring.
Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group where you can ask questions and be in a community with others on the same journey as you.
Digital real estate allows you to have passive income with most of your day being spent OUT of the brick and mortar landscape.
Now, we know you probably have tons of questions…
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