- Rental businesses offer a lucrative and low-risk passive income strategy, with the global rental market estimated to reach $3,388.85 billion by 2027.
- Property managers are essential for landlords to handle the day-to-day operations of rental businesses.
- Other important figures include real estate attorneys to assist with laws and disputes, insurance agents to secure policies, and tax professionals to help landlords remain compliant with taxes.
- With the right team, landlords should find that running their rental businesses is a rewarding experience that offers consistent income streams.
Rental businesses can be incredibly lucrative passive income strategies, as they offer a steady income stream over a long period. The rental industry is expected to grow steadily in the coming years, with the global rental market estimated to reach $3,388.85 billion by 2027. This makes an apartment or other residential rental business an ideal passive income option for those looking to generate additional revenue without spending too much time and effort on their investments.
Rental businesses provide a consistent income stream that is relatively low-risk compared to other forms of investing, such as stocks and bonds. When renting apartments, one’s initial investment is typically modest, making it easier for a new business owner to start. Additionally, landlords can diversify their investments across multiple properties, which helps mitigate risk even further. Furthermore, if the market improves over time, owners may be able to increase their rent prices without significant additional effort.
However, passive does not mean easy, as most landlords will find when running their rental businesses. Several people may be needed to ensure that a rental company runs smoothly and remains profitable. Here are the most critical among them.
Property Manager
Landlords can manage their properties, but it can be a significant time commitment and may require additional training. For those who are interested in staying relatively hands-off, the services of professional rental property managers can be beneficial. Property managers take care of day-to-day operations, freeing landlords to focus on other aspects of their businesses.
Here are a few responsibilities that property managers can take:
Property maintenance
The property manager must stay on top of regular maintenance needs, such as fixing broken appliances, performing lawn care and landscaping, painting interior walls, ensuring safety codes are met, and more.
Rent collection
Property managers can also handle the often tedious task of collecting rent from tenants. They will typically follow up with those who have yet to pay their rental fees and ensure that payments are made promptly. Reliable rental management services might also offer online payment options that simplify things.
Leasing
Property managers also handle the leasing process for landlords. This includes advertising and marketing vacancies, setting rental rates, screening potential tenants, and signing lease agreements.
Accounting
Finally, property managers can handle bookkeeping and financial tasks related to a landlord’s rental business. They will often create detailed income and expense reports to give landlords an accurate view of their profits or losses.
The property manager is the go-to individual for most landlord’s rental business needs, but they may need to call in additional help from time to time.
Real Estate Attorney
A real estate lawyer can provide invaluable guidance to those in the rental business. They are knowledgeable about landlord-tenant laws, which can help landlords protect themselves from potential lawsuits related to their properties. Additionally, a real estate attorney may be able to assist with signing and terminating leases and resolving disputes between landlords and tenants.
Real estate lawyers can also guide various other issues that can arise with rental businesses, including eviction proceedings, tenant rights, and more.
Insurance Agent
Rental businesses that own multiple properties need to secure insurance policies for each of their properties. An experienced insurance agent will be able to assess the landlord’s particular needs and ensure a policy that meets those requirements. This can help shield landlords from potential financial losses from owning rental properties, such as damages caused by natural disasters or liability lawsuits.
When choosing insurance, you must also decide whether to include insurance for rent lost due to tenant default. This type of coverage can provide landlords with financial protection if they cannot collect rent payments from their tenants.
Tax Professional
A tax professional is also invaluable for landlords who own rental businesses. They should be familiar with all relevant state and federal laws related to taxation, which can help landlords make sure they are filing accurate returns and paying their taxes promptly. They can also advise on how to maximize deductions, which could lower the total amount owed in taxes each year.
Tax professionals do not have to be consulted on every minor detail; they are there to provide advice and guidance based on their expertise. However, having access to a tax professional can help landlords comply with all relevant rules and regulations.
Final Thoughts
These are just some people who may be necessary for running a successful rental business. With the right team in place, landlords should have no problem achieving their desired goals for their businesses.
