Buying property and then renting it for an annual rental yield is a much lucrative and remunerative business option while working in the real estate industry. The technique of renting out your residential as well as commercial property for the rental gains is in the market since ages and is strong enough to convert millionaires into billionaires. Also, the business mechanism is used widely to create a passive income source for the people who want to earn money with the money. The crux of whole discussion is that the real estate rental business can do wonders for you and earn you good money, however, where this business has greater benefits for the investors, there too are certain limitations.
Therefore, we always recommend keeping things in mind before practically jumping into the business. As the tips won’t just ensure high return and rental yield to you, but also it will help you to conduct the business seamlessly. If you are a real estate entrant and want to earn handsome revenue by buying rental property then you should keep these things in mind. We have dedicated this post especially for the new landlords to help them through the process in order to generate the maximum output and keep them safe from falling prey to any unfavorable situation.
Keep Yourself Up-To-Date with Market Trends
The real estate market is quite a flexible and volatile marketplace and is driven greatly by the market trends and norms. It is immensely important for the rental business owners to know these trends and charts and also keep them updated with what are the new norms in the market.
Another thing that is equally important in the area choice. Real estate market has appreciation and depreciation work directly related with the area where the property resides. Also, the appreciation and area preferences work hand in hand due to all the right reasons.
Say for an example, if you have a shop in an area where there is high residential need, or you have a residential option available at a location where there are markets, and commercial properties have all the appreciation. In both these conditions you get to suffer as you will first have to struggle a lot more in order to get a tenant and keep the agreement for a long term, and secondly you will not have the rental value of it that you can get elsewhere.
Maintain Your Property
Some people think that rental property doesn’t need a periodic maintenance as they are not staying in the place and someone else resides there. But this is not the right thing to do for your business and reputation. Yes reputation! In the smaller markets where there are lesser properties available for rent, in these areas once a landlord, be it a company or an individual ruins their reputation, doing business in the locality becomes way harder there.
That’s not all, the prospects of finding a potential tenant and getting good rent from them also becomes difficult in such situations as your property will be torn and no one wants to reside or work in a property which doesn’t have a fresher outlook.
Apart from that, conducting a periodic maintenance check saves you from the bigger problems, like getting a broken piece of wire replaced before the whole circuit breaks down seems like a great job at least to me.
List Your Property Wisely
Now the next thing that comes in this whole procedure is finding the best listing website and doing the chore properly and wisely. It is always recommended to pay due diligence while looking for the property portal where you are going to put your ad.
Some websites are known for commercial properties, while others do great with the residential ones. Similarly, few of the listing websites work great for the buying and selling business, while there are many others that help efficiently in renting and lending ones. You have to choose one according to your choice that where you need to put your ad.
Also, take neat and clean images that are bright enough to show every detail, or for a better result try to take the pictures in the bright daylight. This won’t only save your from undue visits, but also it will save you from the hassle of repeated viewing of the property.
Lastly, put a realistic price of the property comparatively a little lower than the neighboring properties. This can be done efficiently by conducting a local research to find out what the average rent of similar property type is there in the locality.
Scrutinize the Potential Tenants
Once you are finished doing with the ad on listing you will start receiving calls and text inquiring about your property listing. Don’t settle for the first inquiry that you get or just don’t do the lending thing haphazardly. Rather, you have to make a list of the potential tenants who seem to be much interested in your property.
Once you have made the list you can narrow down the choices by giving due diligence in scrutinizing each query that you have received. Ask them about their tenant history and look for whether they have broken a tenant agreement in the past or not.
Also, you can check up on the local criminal record to find out that if they have been involved in any kind of criminal activity in the past or not. You need to be a little more careful while lending your property.
Know Your Rights as a Landlord
One wrong turn or a single careless decision can leave you in a fix. This is where you will need a proper legal backing and enough knowledge to support your opinion. You must be educated enough about the rights and laws of the land that are currently prevalent in Pakistan.
A rift between a landlord and a tenant is a very much common thing and it can be ignited through a meager difference of opinion. However, it is always better to get your issues resolved through communication. If in any way the tenant is not willing to understand you point on any matter you can get the legal assistance.
You can send an eviction notice to the tenant and also evict them lawfully if they are not abiding by the rules. You can take a legal action against the tenant if; they are using the property for illegal work, they are living in number more than the capacity, or they do not comply with the tenancy agreement. Once the eviction notice is sent by you and received by the tenant, and the grace period comes to an end, your tenant is legally bound to leave your property. If however they still don’t agree to leave, the local police will help you remove them from your property.
Your property is the biggest investment that you might currently have in your portfolio, and no one including us wants to leave it in the hands of someone who misuses them. That’s the reason we have compiled an essential list of what and how should do to lend your property to the best possible tenant. If however, the decision is taken wrong and the property is occupied by a notorious group, family, or individual, we also have elaborated that what steps and measures that you can take lawfully to throw them out of your property.
If you still have any issues regarding the rules and laws of tenancy agreement you can call us any time on the numbers given below, or just leave a comment in the comment section. Our highly diligent and energetic staff member will get back to you shortly and assist you in any possible way.