What is a Rental Plan
A rental plan is a document that details how you intend to run a rental business. This may be used for renting out buildings, houses, land, equipment, and vehicles. A rental plan is also considered as a business investment proposal especially if it is created to inform and entice investors to help fund your rental business startup.
How to Make a Rental Plan
This article focuses on the creation of rental plans that will be used in the real estate industry. If you are interested in renting out your property, study the steps below to guide you on the proper steps to take in making an effective rental plan.
1. Start With an Executive Summary
The executive summary report is a synopsis of your rental plan. It should be accurate, concise and direct to the point as it details all the key points of your proposed plan.
2. Determine Your Property’s Unique Selling Point/s
From the get-go, you should know what sets your property plan apart from other property plans. This way, you can market the property better. Do you have a beach-front property? Or is it in a business district? Is it newly renovated? Or do you offer free wifi access within the area that your rental property is in?
3. Conduct a Market Analysis
Another essential part of any rental business plan is market research and its accompanying target market analysis. Here, you will determine the suitability of such business in your area. You will also find out which specific demographic and income bracket your property is for.
4. Write a Management Plan
Then, start writing the specific marketing strategies and management methods that you want to implement for your business. Will the property be advertised through online housing platforms? Or will you place an ad in a local newspaper? How about using real estate flyers?
You must also decide who will manage the property and how much the monthly rent will be. Will you be staying nearby and collect rent monthly? As a new landlady, you may have to do everything by yourself. But if you have multiple rental properties, it may be more convenient to hire a property manager.
5. Choose a Financing Option
Next, let’s talk about the funds. A good rental plan should include how the business will be financed. Will you get a bank? Or will you use your retirement savings? You may also explore getting investors for your business.
Your rental plan should clearly state your preferred source of financing, how you intend to purchase the property, and the corresponding payment schedules.
6. Business Objectives or Goals
Also included in a good rental plan is a list of the different business goals that you wish to achieve from your rental properties. Come up with a planning checklist and set up a smart objective to keep you on track of achieving an investment return.
7. Compliance to Local Regulations
Remember, renting out a property is a business endeavor. You must comply with your local housing and tax laws in order to legally operate as a landlord or landlady. Also, make sure to have a draft ready for your rental contract and rental agreement forms before official operating as a rental property business.