Originally posted on https://www.verticalrent.com/entry/turn-your-property-hobby-into-a-business-in-these-easy-steps
Have you ever wondered how easy it would be to make some money from a rental property or by buying an old home to flip and sell at a profit? Well, it could be a lot easier than you might think! These days, thanks to the popularity of short-term rental sites like Airbnb, they aren’t the only two days you can make money from property either. Right now, it looks like it’s the perfect time to turn your property hobby into a decent little earner. If you play your cards right, you could even turn it into a full-time hobby.
It isn’t too difficult to set up your own property business, but it will take some time in order to set it up and make a success of it. It will certainly take a lot of time and effort, but if you are motivated enough to make this your main career, then that shouldn’t bother you too much and you will be happy to roll up your sleeves and do all the necessary hard work.
Do Your Research On The Type Of Business To Pursue
Firstly, it is really important that you do plenty of research into your property business. How do you envisage making money from houses and apartments? There are three main ways you might want to think about: renting out to long-term tenants, running a short-term let, or buying cheap homes and renovating them before selling them for a profit. If you are really into DIY and home maintenance, then you might find flipping and renovating properties will be very rewarding indeed. However, it’s a lot of work. If you would rather a passive income from your properties, it could be best to start a few long-term rentals.
Find Some Initial Startup Investment
Of course, you probably won’t be able to start your property business without any cash in the bank. Most people who start a property business alongside their current full-time job save up for a few years so that they can build up an emergency fund. You will then have plenty of money to fall back on if anything goes wrong with your property projects. If you save up even further, then this extra cash can go into your startup costs. If you are serious about setting up a property business, then you might want to try to find an investor. It could be worth going to a few local property expos and conferences as a lot of industry investors will be there too.
Think About The Optimum Neighborhood
One thing that some people fail to think about until it is too late is the neighborhood in which they want to purchase their property. The neighborhood will largely dictate how you make money from your property and the kinds of profits you can make. For instance, there’s no point setting up an Airbnb rental business if you buy some apartments that are not in a popular tourist destination. It’s best to always look to buy in a slightly affluent neighborhood, whether you are going to sell straight away or rent them out. Even though it might be slightly expensive to purchase, you will be able to ask for an even higher asking price or monthly rent when the property is ready to sell or rent out.
Write A Business Plan
Even if you are going to manage your property (or properties) alongside a full-time job, it’s still important to treat the venture like a proper business and write a professional business plan. In this plan, you should list your various sources of money to fund the business. It’s also wise to include a financial budget as well so that you can keep track of all your expenses to ensure you never end up with unnecessary debt. The business plan should also include an exit plan. When you want to bring your business to an end, what will you do with the properties? This plan should cover that so all eventualities are planned for.
Set Yourself Up Online
It’s always a good idea to try to build a web presence for yourself and your property business. This is especially the case if you have a number of long or short-term rentals, as a strong online presence can help you find new tenants. When it comes to flipping and selling properties, using a CRM like Follow up Boss will come in really useful as it can help you keep track of leads and convert them into sales. No matter what kind of property business you go into, getting online and developing your web presence and delving into online resources will really be useful.
Consider Using A Property Maintenance Service
If you rent out your properties, whether for the long or short term, you will need to continue with any necessary building maintenance and repairs so that they are fit for tenants to live in. This can end up being a lot of work and, if you decide to do all the maintenance yourself, you will need to be back and forth between the properties quite a bit. That can be frustrating if you don’t live anywhere near them. There is one way around this, though. You can just outsource all of the practical jobs and work to a property maintenance service. These are companies that look after homes and apartments on behalf of landlords. Even though it will be an extra expense, it will save you a lot of time and effort.
Think About Your New Tax Situation
When you do set up a new property business, no matter how big or small it may be, your tax situation will change as you will now have a new source of income. To keep things nice and simple, it’s best to find an accountant who can help you with your taxes. They will also be able to manage all of the finances for your business too if you want them to. And then that’s one less thing for you to worry about!
So, ready to move into the property world?!