One of the many benefits of investing in real estate is the ability to earn passive income by renting out a property. But what exactly is renting, and how do you go about ensuring that you make money on your investment rather than losing it?
Before you do anything else, you need to learn the essentials of renting out your condo unit.
You’ve heard that renting out a condo is a successful enterprise that kills two birds with one stone: the tenant helps you pay off your mortgage with monthly rental payments, and you have a chance to make some additional cash. Doesn’t it seem like a decent deal? But, like with many things in life, it isn’t as simple as it appears.
A first-time condo landlord must consider more than simply taking great photographs of the place and then publishing them online. It’s not simply about collecting rent every month. When you decide to become a landlord, you must develop abilities you didn’t realize you possessed and be willing to learn new things. Remember that this is not a 9-to-5 work, because no one can predict when the pipes will burst or when crises will occur.
There are many considerations on matters of how to rent out your condo in the Philippines, and we will try to break it down for you here.
Understand Your Market
Is your condo be used by employees or students? Is it for a family, a couple, a single person, or a group of friends? Is it for business travelers searching for a temporary home or for young professionals looking for a long-term lease? Try to identify your market before deciding on the pricing, furnishings, design, or promotion.
It’s all about the location in the city. Students are the most viable market if your condo is located along a university belt. Employees are your best bet if you’re in the middle of a business center.
Suggested Read: Buying Rent to Own Condo and Its Disadvantages
Know the behavior of your Tenants
It’s sometimes all about instinct. It’s critical that you meet the renters in person to get a sense of who they are. Keep in mind that, at the end of the day, you are accountable for your tenant’s actions. Unless you are alright with stress, you should consider twice if they have too many requirements or look poisonous.
It is recommended that you conduct a background check. This isn’t a background check for a detective, but rather for due diligence.
Make sure your unit is ready
Make sure your apartment is in good repair and beyond habitable once you’ve defined your market and before you settle on a price. Examine the shower, toilets, sink, paint, and ceiling, among other things. You must also decide whether to furnish it or sell it unfurnished. This, too, will be determined by your target market. Bunk beds, study tables, and built-in closets, for example, may be used to make your condo space suitable for both living and learning.
When you prepare your unit, you ensure that you get the most out of your investment. You can negotiate a higher price if the unit is in excellent condition.
Suggested Read: Rent Worthy Condo Tips: A Guide for Starting Landlords
Prepare the necessary paperwork
This section might be tiresome and monotonous, but it is unavoidable. Among other things, prepare your contract. Payment conditions, tenant obligations, and landlord responsibilities will all be discussed. This also includes eviction and home restrictions. To minimize future confusion, make sure you clarify everything with your tenant. Before renting out your apartment, you may need to obtain a permit from the building authorities. You’ll also have to deal with tax issues.
Know what you are doing
Landlords who are new to the game should be aware that collecting rent isn’t the only thing they’ll be doing. You’re a salesperson, a repairman, a negotiator, a collector, and on occasion, a security guard who keeps an eye on the apartment when the tenants are away. All of this has a learning curve, and as you grow, your business and management abilities improve until everything comes easily.
Having a network of assistance, such as an electrician or a plumber, might be beneficial. When needed, you can also request the help of the building administration.
Watch out for your expenditures
As a result, you demanded a two-month advance as well as a security deposit. Avoid shopping malls since your money isn’t actually yours. When the renter decides to depart your apartment, the deposit will be returned to the tenant, and a reputable landlord will be able to repay it on time. One should also set aside a percentage of your rent for repairs and other unexpected expenses. Because rental homes are a business, you must carefully manage your funds.
Build a good relationship with tenants
After all, you are letting practically a stranger live in your house. That’s quite a big deal. Trust is important here, and as the landlord, you must learn how to nurture it. You would have to compromise every now and then, and that’s okay. You will be negotiating throughout the term of the contract, and you should do so in a healthy and friendly manner.
Being a landlord may sound like an easy-peasy job, but just like any business, it requires commitment. Not all people are fit to be a landlord. But skills can certainly be learned and the level of commitment is bound to improve over time.
Know the Law in your local
It is imperative that you know the local landlord-tenant laws. Some jurisdictions may require you to register the property or obtain a business license to rent your unit. Cities that have rent control almost always require rental registration even if you are exempt from the rent control laws. Failure to comply with local rent laws can be costly. Do your research so you can avoid pesky fines. Local laws may contain other rules you should know about as well. For example, there may be regulation on security deposits. It may limit you on the amount you collect and especially where you keep the money. In general, knowing your rental laws is a must. Understanding the process of eviction, deposits and property management should be mandatory as a landlord.
If you have made it this far, you are obviously serious about renting your place. We hope this blog will assist you in the process and make it easier on you when you decide to make the leap into being a landlord.
Suggested Read: How Rent to Own Properties Work in the Philippines
Start Your Condo Rental Business Today with Camella Manors
If you are eyeing now to invest in a condominium for sale in the Philippines, then look closely at the available condo for sale properties at Camella Manors.
Camella Manors offers projects strategically located in the country’s most thriving metro cities outside Metro Manila; areas which are booming and developing at this time, specifically Caloocan, Lipa, Puerto Princesa, Bacolod, Butuan, and Davao.
These cities are one of the richest cities in terms of rental correspondence having been a few of the most cited tourist destinations in the country.
Technically, Camella Manors offers you the primary reference of location in your bucket list of where to find the best and most promising condo investment in the country.
If you would like to closely get details with Camella Manors condominium properties for sale, then simply click the inquiry form and book an appointment with one of our marketing officers; or you might as well message directly on the official website chatbox.