Tips on Starting an Apartment Business in the Philippines
Renting business is one of the highest paying businesses nowadays, especially in the Philippines. The demand for a space or apartment for rent is high due to the fact that there is a huge population of families, employees, and college students every year – which even increases every now and then.
Aside from the skyrocketing demand for places for lease, the return of investment is also guaranteed which is why a lot of people are taking advantage of this as a huge opportunity for them. Rental business is a good and stable source of income which requires little effort to maintain.
However, not all people can be successful if they decided to build their own establishment on a whim as there are also a lot of aspects to consider when an individual is interested to venture in the renting business. It is important that a potential landlord/landlady is fully aware and knowledgeable enough to be able to make their business successful.
To be able to establish and properly handle an apartment renting business, here are some factors that you need to consider.
Amount of capital
Before considering anything else, your capital should be the first one you need to take note of. Building your own apartment rental business requires a bigger budget due to various aspects such as cost of materials, labor, location and more. Think carefully. Capital is the one which will determine if you’ll be able to make a lot of earnings through your business.
If your budget would only suffice for a single space, you might want to save some more or apply for a loan before investing all of your funds in an apartment rental business.
On the other hand, if you have a bigger budget, you can even opt for a more rooms or apartments to put up for lease. Also, by having a good amount of capital, you can even improve the appearance of your apartment to make it more appealing to your potential tenants.
Business plan is always a necessary when it comes to businesses. An entrepreneur should be wise enough to prepare a business plan which will help him throughout the whole process and during the operations.
For an apartment rental business, the owner should come up with a concrete plan about every single detail in the apartment that he will put up for rent. He should plan what kind of tenants he is willing to lease an apartment to, how many persons are allowed to live in a single apartment, are the tenants allowed to bring their pets, what are the house rules, and how much should be the monthly rent.
Property location is one of the most important aspects of apartment rental business as it will be the determinant if your business will be a hit or not.
You see, if a potential tenant realizes that the apartment is far from establishments like market, office, school or even church, the tenant would lose interest especially if it means that it will take some time before they reach their usual destination.
Moreover, the apartment should be situated in an area where it would be safe during typhoons or earthquakes. Lastly, it shouldn’t be closely built to other houses to avoid being at risk in case a sudden fire occurred in the neighborhood.
Design of the apartment
The design of the apartment is also considered by tenants at times.
Put yourself in a potential tenant’s shoes: would you rent a place that is poorly built?
Before you have your establishment built, you must first carefully plan what kind of appearance you prefer for your apartment. Is it a multi-storey building, a duplex type, or a single-floored apartment? Would you prefer sliding windows or those which have grills or jalousies?
The design of the area is important, but owners should put in mind not to go over the budget.
Acquire the necessary permits
Once your capital is already in your possession and you already got the rights for the land property, the construction can be kick started as soon as possible.
Aside from the necessary requirements, make sure that all government documents such as building permits, clearances and more are secured from authorized officers.
Register the business properly
If the building has already been finished, the apartment rental business should be registered to the Philippine government agency named DTI or Department of Trade Industry, wherein it will be declared what type of ownership the business in under and how much the rent is,
Get insurance for the property
Insurance for a property is always a must. No one knows if there will be an incident in the future that will cause damage to the property; therefore, having it insured will be a great relief for the owner and for the tenants as well.
Although getting an insurance means you will have to shoulder another expense, it is definitely worth it as it will give you a peace of mind and will assure you that your investment is secured. Moreover, it can guarantee you a lot of benefits in case accidents happen which makes it a great idea to have the apartment insured by a trusted company.
Ensure up a lease contract for every tenant
Trust is one of the most precious things in this world. Having a stranger to rent your place means you will need to completely put your trust in them with the premises. Therefore, putting your agreement in writing will give you confidence and protection for both parties as well.
Screen your potential tenants
Having tenants who fail to pay their monthly rent is inevitable as there might be certain circumstances in their sides that make it hard for them to pay their bills for the month. However, it is truly a disappointment especially for the landlord/landlady who is trying to make ends meet through the rent they receive from the tenants.
Therefore, it will be a wise move to try to at least screen potential tenants before having them sign the contract. They should be able to prove that they are capable of paying the monthly fees and will not cause any trouble in the neighborhood.
Maintenance of the property
It is the responsibility of the owner to regularly inspect the premises to ensure that the apartment is well-maintained for the next tenants. If a tenant also complains about a part of the space that is broken, it should be fixed immediately to preserve the property for a longer period of time.
There you have it, then. When are you planning to launch your apartment rental business?