Starting a new business is always exciting, but it certainly isn’t easy. To be successful, you need dedication, a carefully designed strategy, and lots of hard work.
This is especially true if you’re planning on starting a rental property business. While managing a rental property can be very challenging, it’s a terrific way to build equity and create passive income that can set you up for the future.
Thinking about starting your own rental property business? Here are a few things to keep in mind:
Research
Preparation is key when starting a real estate investment. Most mistakes committed by inexperienced rental property managers come from a lack of research. Taking time to gather more information before you make any big decisions can determine the success of your investment.
Start by asking yourself important questions such as:
- What are the proper procedures involved?
- How will I be able to obtain funding?
- How is the rental market in my area?
- How can I get an advantage over my competition?
- Am I ready to dedicate my time and efforts to running this business?
Hire an experienced professional
Getting the services of an experienced professional is a step in the right direction, especially during the early stages when you set out to start your rental property business.
A professional will provide assistance, so you can hit the ground running. They’ll be able to help you through the most important steps, such as:
- Planning for your investment
- Getting information on the taxes involved
- Choosing the type of rental property that’s ideal for your goals
Register your business
The first “official” step in starting a rental property business is registration. Basically, registering your business will list it with local, state, and federal agencies in order for it to obtain official business status.
Head to your local chamber of commerce office or corporate affairs offices to inquire about registration. Additionally, you will need to define the type of business you’re starting – is it a sole proprietorship, a partnership, or an LLC?
Create a business plan
Establishing a plan will help you sort out all of the details to get your rental property business up and running.
Some of the things you’ll need to consider when creating a business plan are:
- The executive summary and description of your company. You’ll need to define your company’s mission and vision statement, which emphasizes what makes it different from your competitors.
- Income generation projections and strategy. Remember to set realistic goals for the rental income generated by your business. Being conservative with your estimates is a smart move, especially when you’re just starting out.
- When creating your business plan, it’s also important to include important factors such as pricing, financial projections, management strategies, plans for expansion, and advertising and marketing techniques.
Planning to start a rental property business in St. Louis Metro? Put our experience and expertise in commercial real estate to the test! Get in touch with us at Cardinal Realty Group today by calling 1.636.225.0385 or send an email to Hal(at)CardinalRealtyGroup(dotted)com