Are you planning to rent out your DMCI condo this year? Investing in a rental property can be a smart move. But before becoming a landlord, you need to understand the responsibilities that go with it.
The Philippine’s economy is strong, and more and more people can now afford the conveniences of condo living. The market is promising and rental property investment can be very profitable. All the same, you need to be able to manage the business well to fully reap the benefits. Here are the top things you need to consider before becoming a landlord.
You need to understand the responsibilities involved
Rental properties are often touted as a source of passive income. This gives people the impression that they can just find a property, rent it out, then sit back and expect things to go smoothly. This is not entirely the case though. Sure, it’s a passive investment in the sense that you will not have to clock in for an eight-hour work five days a week. But getting into a rental business also takes work. You will have to stay on top of things. Note that the operative word here is “business.” You must treat your rental property as a business that involves legalities, taxes, and operational maintenance and expenses. Cultivate the right mindset first before jumping in, so you can spare yourself any possible complication.
You will be responsible for your tenant’s’ behavior
As a landlord, you will be responsible for your tenant’s behavior. So make sure they are well aware of the condo’s rules. Talk to the property management so you can properly review the rules yourself. This will help you communicate your expectations to your own tenants more effectively. To make it even more binding, you can add clauses in your lease agreement or contract that spell out the rules in more details.
Being clear with the rules will also allow you to filter out unruly tenants. If they can’t or are not willing to abide by condo policies, then it’s best you find out early on. This will spare you a lot of stress and will also help you keep your condo in pristine condition. Moreover, it will allow you to maintain good relations with your condo’s property management.
Your unit has to be in top shape
To get the most out of your rental property, make sure it commands the best price. One way you can do this is by giving your unit a makeover. This is especially essential if you are renting out a space that has already been lived in before. Check for paint that is chipping off, faucets and showers that are not working well, toilets that do not flush, wiring that does not work, bulbs that need to be replaced, and other such crucial details. You can also add furnishings that will make your unit look more put together. If you are targeting an upscale market, then make sure you take the extra mile to make your place look posh. The little details can make all the difference. And the extra efforts you take at the moment can bring you enormous returns for many months, even years, to come.
You will need to find the right balance for your pricing
You will need to figure out the right price for your unit. If you set it too low, you run the risk of losing out on your investment. If you charge too high, you might have trouble finding a tenant. You’d then leave your unit vacant and not earning for months on end. Find the right balance. The best way to figure out a reasonable cost is by learning how much other rental properties in your neighborhood and condo community are charging. Keep in mind that prospective tenants will be scouting around for the best deal. Gain an advantage over your competitors. If you must insist on a higher rent, make sure you have the goods to back it up. You can go all out with your interiors and furnishings, for one. Whatever you do, make sure you stay firm on your price limit. Consider the expenses incurred for the unit but for the furnishings as well. Remember that it’s a business, and profit is your number one goal.
You need to know what to look for in tenants
Having a problem tenant can be very stressful for landlords. If you want to spare yourself the headache (or heartache for that matter!), take the time to properly screen your tenants. Carry out a thorough background check on potential tenants. Look for someone you can trust to keep your property in good condition. You also need to make sure that you can count on them to pay their monthly rent on time. This is important if you wish to earn from your business and not lose out on your investment.
If, say, you intend to rent out a room and will be living with the tenant, you will have to take a closer look at their personality. You need to ensure that everyday life with the tenant will not be toxic or stressful. You also have to make sure that you only go for tenants who will be amenable with your condo’s rules, so you don’t run into any problem. Getting rid of unwanted tenants can be difficult, so you need to make the right decision early on.
You should be willing to provide assistance
As a landlord, you should be willing to provide “customer service.” As with any business, you will need to please your customer if you wish to stay profitable. Your tenants expect and deserve to get what they pay for. So make sure you are easy to reach, and that you are available to fix any problem that is within your scope of responsibility. And always treat your tenants with respect and courtesy, it is an unwritten rule and a right of the tenant to be spoken to with value and consideration. The last thing you want is to find ideal tenants only to lose them later. Keep in mind that finding new tenants can be costly, not only because you may have to put in resources for marketing but also because your property may be left vacant and unprofitable for a couple of months.
You need to learn to properly handle your finances
Get serious with managing the financial side of your rental property. It’s a business, after all. Open a business bank account and put together a bookkeeping and record-keeping system. Make sure you track and manage your income and expenses. Not only will you be able to better grow your money this way, but you get to manage your taxes more efficiently as well.
You may have to reach out to professionals
Turning your condo into a rental property is not a simple task. It requires hard work and a lot of complexities you may not understand, such as tax laws, local property laws, and binding clauses in your contract with the developer. If you’d rather not deal with these, you would be better off enlisting the help of professionals instead. You can work with DMCI Homes Leasing Services (DHLS), and have them cover the essentials for you. Committed to providing solutions for condo owners who’d like to lease out their unit, DHLS will help you enhance the value and marketability of your property. They are the official property leasing and management unit of DMCI Homes, a triple A builder/developer, so you can are assured that you are dealing with people who know what they’re doing.
Renting out your condo offers very promising rewards. Take the necessary preparations and you’ll be reaping the benefits in no time.