The costs related to owning a property can be numerous including mortgage repayments, utility bills, and property taxes.
Whether you inherited an old house, bought one to lease out, or have a portfolio of properties, the ideal situation is covering the costs and making a profit.
Old and run-down houses may seem worthless to some but after renovations and repairs, they can become much more desirable properties providing light and spacious rooms suitable for accommodation, bed and breakfasts, businesses, events, offices, and storage space.
Although the process of renovating a building is costly, it is well worth reading about the practical ways you can convert your old property into something useful and rewarding.
Residential Rentals
There are many things to consider when renting out your property ranging from writing a contract, security deposits, rent payments, marketing, maintenance, and dealing with disputes.
The property experienced experts from this website provide a detailed run-down of everything a landlord is responsible for. Following a guide like this is essential before forming a plan, renovating and renting out your property if you wish to avoid unwanted issues and headaches.
The starting point in renting out your property is deciding how much of the property you will rent out and the desired rental fee.
Properties close to key amenities such as universities, schools, hospitals, transport stations, and supermarkets are usually more sought after by individuals looking to rent out a room, apartment or house, and can therefore command higher rents.
You should always clean, renovate and repair your property as much as possible, then take high-quality photos to attract potential tenants. Remember a tidy, modern, and functioning building will always be more popular and be occupied sooner.
A thorough renovation should also include ensuring the property meets local building standards. Things to consider when leasing out a residential property are:
- Crime rates. Properties in areas with lower crime rates can expect to have higher rents.
- The local job market. An area with a prosperous economy and labor market will provide a landlord with a larger pool of high-quality potential tenants.
- The volume of listings in the area. Many listings in an area likely point to low average rents, whereas fewer listings usually equate to higher rents.
- Development plans. The construction of new infrastructure or buildings near your property could cause disruption and scare renters away or instead attract would-be tenants to the neighborhood.
Rent Out Your Property For Commercial Purposes
If your property is large enough and the facilities can be upgraded to meet certain standards, then it may also be considered a commercial property, which can turn a tidy profit if managed professionally.
Renovating a building to fit its intended purpose is a costly endeavor, such as extensive customizations needed to run a business.
Although the costs of converting a building into a commercial property are often higher than for residential properties, they can be well worth the returns in the future.
Furthermore, the landlord will be dealing with a company, so they can likely avoid the common problems faced when leasing to residential tenants.
Start a Bed & Breakfast
In the coming years, tourism is expected to boom once again, and an increasing number of people are noticing opportunities to enter the hospitality sector to make money from their property.
Preparing a building for high-quality and comfortable accommodation which tourists will enjoy is a challenging process requiring a range of skills and lots of passion. Therefore, it is crucial to research what is necessary and formulate a step-by-step plan to open a bed and breakfast.
A solid business plan will also be necessary if you decide to open a bed and breakfast, this should include all the operating costs, marketing plans, and financial documents.
For property owners looking to make money passively then running a bed and breakfast may not be the right path to take.
Storage Space Rental
Not every property owner wants to be a host or a landlord, this may be due to financial or time constraints. However, it doesn’t mean the property should remain uninhabited and not make any money.
One low maintenance alternative is to rent out space for storage of items such as vehicles, furniture, and online shop inventories.
The key things to get right when leasing out storage space are security and ensuring dry storage which is free of pests. Apart from that, the property owner has fewer responsibilities than if they were renting out for residential or commercial purposes.
List Your Property As A Holiday Rental
For landlords of properties in scenic locations or near tourist hotspots, excellent returns can be made running a holiday rental. However, the financial success of renting out a vacation home depends on if the property is adequately set up and maintained to the standards visitors expect.
Whilst the potential profits from letting out a second home are sizable, you should remember that reaching a sustainable and profitable position takes a lot of preparation, planning, and execution.
So let’s say you have bought a house in the perfect location to attract tenants for short-term holidays, what’s next?
Renovation works may come to mind first, but, before breaking ground on expensive upgrades, you must first write a business and renovation plan based on the needs and wants of your target audience.
Formulating a clear step-by-step business plan will help you to make informed decisions on what to replace or upgrade in your property according to what your guests want. For example, guests from the higher end of the economic scale will often be expecting modern, stylish and clean surroundings.
A detailed marketing plan should also be included in the business plan of a holiday rental, noting where the property will be listed whether that be on a holiday rental platform, with a travel agent, or through a property management firm.
Owning an extra property can be a financial burden, especially if you can’t decide what to do with it.
However, there are many options for converting your property, leading to opportunities to more than just cover the costs related to property ownership.
