No job is easy. If you’re stuck in a 9 to 5 job, you’ll have to follow stringent rules and working hours. But if you’re an entrepreneur, you’ll have to carry your weight because no one will carry it for you. However, the biggest difference between these two is that when you’re the boss, the work you do will be more fulfilling.
This is because you’re doing something that you’re passionate about instead of just following what other people tell you to do. Of course, entrepreneurship is not for everyone, but if you think that this is where you’ll thrive, don’t be afraid to take the leap of faith. Here’s how you can make a rental property business out of a distressed building:
Step 1: Find a Good Location
As with any business endeavor, finding a good location is the key to your eventual success. This is because it can be difficult to attract potential customers to an inaccessible part of the town, particularly if there’s no foot traffic or any landmarks near the area. You could take the risk by not picking a good location, but it could also be a waste of time and money.
That’s why it’s more practical to find the right location. There are plenty of distressed properties to go around, but not all of them can be found in a good area. Although it may be more expensive if the location is good, it can also be an investment in your future business that can drive your success.
Step 2: Secure Your Funding
Once you’ve found the best location for your rental property business, the next step would be to secure your capital. It will be hard to rehabilitate a distressed property if you don’t have the money to spend. After all, to make money, you’ll have to spend money first. So this is where it starts.
Of course, you don’t have to finance your business out of your pockets. There are plenty of choices where you can apply for funding if you know how to look for them. For instance, you can apply for FHA multifamily financing so that you’ll have enough capital for the fixer-upper and even afford a few foundational upgrades.
Step 3: Look for Contractors
It would be impossible to renovate and fix an entire property on your own, which is why you need to find a reliable contractor for your project. The general contractor will be the point person for everything that will happen during the rehabilitation project, so it would be best to find a person you can rely on.
A good practice is to shop around for contractors. Don’t go with the first person you meet with; instead, you should interview at least three or more so that you’ll have a good grasp on their asking prices, their visions, and their team of workers. This way, you’ll be able to weigh all your options carefully before deciding who to go with.
Step 4: Rehabilitate the Property
After you’ve found yourself a contractor and a dependable team of workers, the next step would be to continue with the rehabilitation project. The duration of the project will depend on how much you want to change and what your end goal is, so it’s only right to realistically plan your calendar according to them.
What you won’t want to do is rush the process because it may affect the integrity of the building and the quality of the outputs that your contractor is making. This property will be your future money-maker, so of course, you should devote your time and resources to making sure that everything is in good working order.
Step 5: Open for Business
When the rehab is over, the last step would be to open for business. This is the time to put your marketing strategies to work because you have to find good tenants that will bring in your monthly cash flow. After everything you’ve gone through to rehabilitate the property, you can finally reap the fruits of your labor.
So, don’t be afraid to go all out on marketing. Take some professional pictures of the property to attract potential buyers. You can even stage a unit or two because people are more compelled to sign a contract when they see what their units can look like instead of seeing an empty space.
Being a landlord is not all fun and games. It can be a pain most of the time because your tenants will require your services late at night or in the early morning, which can be stressful. But at the end of the day, if you can keep your tenants satisfied with your services, then you’ll be enjoying the monthly cash flow. So really, it’s all about what you want to do and how you want to earn your living.