11 Things to Consider Before Renting Out Your Condo
The real estate industry in the Philippines is on the rise and you got into the bandwagon of buying a condo. You finally got your unit but you’re not quite sure if you want to move in it right away. But you don’t want to leave your newly acquired unit unoccupied, so what is a good solution for such a dilemma? Rent out your condo!
Top condo developers in the Philippines cause the sprouting of condominiums in every location, may it be in the suburban cities or the rural cities. Condo owners are now turning into landlords as they jump in to the growing rental market. Converting residential condominiums into a new business is a smart way of tending to your condominiums. But you can’t simply dive in to this kind of business without knowing what it actually involves.
Are You Ready?
The very first thing to ask yourself is, are you ready to be a landlord? It may sound easy to rent out your unit because you seem to be dumping all of the responsibilities that living in the unit entails to the new tenant. Put yourself in the shoes of the tenant and make sure that the unit is ready to live in. Provide the basic necessities that a unit should have for your tenant. As the landlord, you are also responsible for the behavior of the tenant. When you have affirmed that you are ready for the task, you can now enroll your unit for lease and start looking for a tenant.
Rules, Rules, Rules
Like what was said earlier, as the landlord, you are responsible for your tenant’s behavior. In addition, you also have to be aware of the legalities involved in renting out your unit. Don’t be a fool and try to get more than what you should just like this couple. After knowing your own boundaries, you should also tell your future tenants about the rules and regulations that comes with the unit so that they can avoid being evicted. You have to be aware of the legalities involved in renting out your condo and keep the law to your side so that if a problem comes up, hopefully not, with your tenant, you have a strong backup.
Furnishing your unit is not that easy of a task. Tenants are more critical with the unit that they want for themselves. Since they are paying for something that is already previously owned, they have the mindset that the unit should be in top shape. Because of the growing rental market in the Philippines, as the landlord, you have to furnish your unit in such a way that it has an edge among the condominiums in Pasig, as well as in other cities. This would also imply that you have to check if everything is safe, like electrical wiring and water fixtures.
Call in the Professionals
No one wants to get a call at 3AM just to hear a complaint about a leaky faucet or a burnt out light bulb. But that is just one of the nuances that you will get in becoming a landlord. If you don’t want to be bothered by your tenants, then it is advisable for you to hire a property manager. Sure, this guy will probably ask a portion of your income with the rent. But think of it as his due compensation for doing all the hard work for you in looking after your property and your tenants.
Finding the One
Owners of real estate properties have understood the mathematics of condo renting and buying. They opted for renting a condo it is the better investment compared to re-selling the condo. Finding the right tenant for the unit is probably the hardest part of this business venture. You should thoroughly discuss with your property manager what you are looking for in a tenant. Talk about the rules and regulations of the condo as well as your own set of rules that the client must comply with.
Extra! Extra! Read All About It!
Next is you have to let the people know that you are renting out your condo. This is where a property manager comes in again. Collaborate with your property manager on how you want to get the word out about your unit and how much you are willing to pay for the people to know about it. It is not enough to simply state that you have the best condo in Makati, for example. You also have to include in your advertisement the selling points of the unit and the condominium itself. Show the amenities that would be available to them once they have chosen to rent your unit.
The Price is Right
Channel your inner Goldilocks and find the right price for your unit; charge it too low, you will lose money; charge it too high, no one will buy it. Researching about the market is crucial in this field. You want to put your unit in a competitive position where you will not lose profit but will still be at a reasonable price. You should know what you are up against, but be firm with the actual price that you need. Consider the amount of costs you had to pay for furnishing the unit as well as for the pay of the property manager, if you decide to hire one, and for all the work that you had to go through.
Show Me The Money!
You might want to open a bank account that is solely for the purpose of managing the money that you get with renting out your condo. You have to be transparent enough with how the rent is going, especially with the income and the expenses.
Weeding Them Out
There may be a lot who will be interested in renting out your unit, but these people are different from each other and it is your job to pick the crème de la crème. You have to be critical with this step as a landlord. Have a checklist of what you want in a tenant and do not settle for a three out of five result, always aim for perfection when looking for a tenant. The one you would choose would have to be someone who would respect your property like it is his own. Be sure to make a thorough background check with your potential tenant as well. Check for bank accounts and previous landlords to see if the tenant can pay for the monthly rent.
Let’s Talk About It
Once you have chosen your tenant, you have to sit them down with you and tell them about the ground rules. Make it clear that they must absolutely follow all of these rules to avoid eviction. Also, you can give the numbers that they should call whenever they encounter any problems with the unit. Ease their worries and assure them of your availability.
And You’re Out!
Discuss your the possible reasons for eviction and have them understand that you are not going to be lenient about getting them out of your unit once they have violated the rules. Just be sure that you, as the landlord, would also be reasonable enough in deciding to evict them.
With the rising success of the real estate industry in the Philippines, anyone can now be a landlord. But always remember that there are risks involved in any property investment and any form of business. Take precautionary measures when starting out as a landlord. Thoroughly research the market and gauge yourself if you think you are cut out to be a landlord. It is also helpful to get legal advises so that you can avoid getting into a web of trouble with your tenant.