When setting up any type of business endeavor, it is important to thoroughly develop a business strategy to get the project started. This strategy does not have to be set in stone; it can be revised and updated as needed, once the business owner determines what works and what does not make sense.
A business plan with a thoroughly thought out strategy is especially important in the real estate arena. Having (and sticking to) a plan can prevent headaches in the future. For those looking to invest in real estate rentals for additional income, or for a primary means of income, the following tips will help when creating a real estate rental strategy.
Developing a Real Estate Rental Strategy
Before putting any listings on the market, ensure that each property is up to date on maintenance. Clean and paint, and add those little extra touches that will make the place feel like home to a potential renter. Depending upon the price point, it may also be beneficial to stage the property, or hire a professional to handle this task. Don't forget to keep up with maintenance, and fix any issues that arise immediately. It can be beneficial to hire a company to handle maintenance and turnover issues for you.
It is also important to price a property correctly. Look at comps in the area, and if you have the assistance of a rental agent, let them help you determine the right price. You don't want to ask too much, as this will turn a potential tenant away. However, you don't want to set your prices too low; this can lead potential renters to believe something is desperately wrong with the property. Keep your pricing in line with the average in the area.
Market your property heavily, using every possible resource. Yard signs are great to draw in those prospects who may be out looking at other properties. MLS listings, Zillow, Trulia, HotPads and other websites that cater to real estate sales and rentals are great options. And don't forget about free websites like Craigslist and even Facebook groups or business pages. You never know who will see your ad and where they will see it, so it's important to find prospects where they are. Don't expect them to find you. Always ensure that your listings are up to date. Nothing is more frustrating to someone looking for a rental property than to dig through out-of-date listings, and listings for properties that are long rented. Keep information fresh and build your reputation amongst the community; this will help you increase your revenue.
It is also important to find a good mortgage broker or finance company to help you fund your real estate rental project. Always be upfront with your lender by letting them know that your property will be for rental / income purposes. There are several funding and insurance issues that are unique to rental properties.
Catalyst Funding is a hard money lender located in Houston, Texas that provides financing for your real estate investment needs along with excellent customer service. We also provide access to temp to perm loans. Call us today at 832.648.3626 to speak to one of our team members, or you can fill out our online loan application form if you’re ready for a hard money loan.