Renting out your condo is a great way to turn it into a stable source of income. But offering a unit in a condominium for rent isn’t something that can be done on a whim. To turn your rental business into a success, you must carefully plan it, making sure you cover all your bases before letting the lessee come in.
To be able to set your condo rental for success, here are 9 important things that you should check:
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1. Check out your condo’s renting policy
The first thing that you should do is to check what level of freedom you have in terms of renting out your unit. Some condos allow signing up your unit as a bed & breakfast, but some would only allow long-term rentals. You should also check out other relevant policies such as the needed paperwork that you should do as a lessor, as well as what the lessee would have to do to be recognized as the registered occupant of your unit.
2. Know what kind of occupants you can attract
The next would be knowing your target market. Depending on the location of your condo, there are different kinds of potential occupants that you can attract. Doing a bit of market research will allow you to know what profile of potential lessees are attracted to your location. By doing so, you can design your condo offering to your target market.
3. Check out the market rate in your area
Next up would be your pricing strategy. While there is merit in coming up with your own pricing depending on what kind of rental property you designed your condo to be, you should also be aware of what level of rental rate similar properties are asking. You are competing with other units in the same building, as well as in other buildings near you, and having a price tag higher than most of them may lower your chances of being taken up, but having a competitive price tag makes your condo unit more desirable.
4. Decide on what handover condition you’ll offer your condo for
Depending on the type of lessees you want to attract, you can either offer your condo as a bare unit, or as a furnished unit. Going for an unfurnished rental saves you on costs, but it might be harder to find occupants. On the other hand, furnishing your unit would definitely require more capital expenditure from your end, but doing so can help your unit become more attractive in the market. Of course, there are renters who are specifically looking for unfurnished unit, but generally speaking, you may do better by sprucing up your unit before offering it for rent as this will make it easier for the renter to move in to your unit, as well as move out after their contract ends.
5. Know your marketing options
Once you know the renting policy of your condo, have prepared your unit to host your target market, and at the right price and handover condition, the next step is to put it out there for potential renters to see.
With the modern age, your best choice in marketing your unit is by making online ads, especially in rental listings, as well as in social media. However, there are condo projects whose property management team also handles the leasing of units, so check out all your possible options.
6. Check the background of potential lessees
After putting out your ad in the market, you will start receiving inquiries. Some of these inquiries would turn into inspections, and some may even fall into the type of potential lessees you are hoping to accommodate.
Before agreeing to the offer of any potential lessees, do a background check to make sure that you are handing over your unit to a person who you can trust to take care of it. You should also make sure that your prospect has the financial capability to cover for your rental throughout the agreed lease term.
7. Draft a lease agreement
Before letting anybody rent your condo out, you should have a written agreement that can be used to document your agreement. Some of the most important parts of the agreement should be the lease term, the value of the rent, initial deposit, house rules, as well as the responsibilities of both parties – you as the owner and lessor, and the lessee as the occupant.
8. Create a rental management system
Now that your lease agreement has captured all the terms and conditions that you and the lessee agreed on. The next step is actually managing the operations of your rental property. First of all, you would need to be able to track the rental payments. Secondly, you would need to either be available every time the lessee needs you, or having a dedicated person managing your unit or units for you.
By going for the latter, you would not need to personally handle the affairs of your property rental. This is great if you have a full-time job, or if you have more than 1 property. As mentioned, some condos actually handle the rental of units, but they would, of course, charge a considerable amount for such services.
9. Check out on your lessee every now and then
Finally, it is ideal that you maintain a warm relationship with your lessee. You have entrusted your unit to this person, so it would be a good idea to build rapport, as well as trust with him or her. Forging a healthy lessor-lessee relationship can help steer your property rental towards success as you can be recommended to other potential lessees, or your current tenant can consider extending their contracts.
Renting out your condo has the potential to be a successful business venture. But it can only be so if you follow the above tips from us. By doing so, you are 9 steps closer to being a successful condo rental, making all your efforts for your condo unit all worth it.
