If you’re looking for a great startup idea, then it’s worth turning your attention to the real estate market. Real estate is readily available for you to invest in, then turn into a profitable business. Some of the top earners in the country have their roots firmly sewn in real estate, and you can join the party too!
There are many business ideas in this field, but we’re going to focus on a buy-to-let startup. The purpose of this idea is to buy properties, and making money by renting them out. It’s a very popular idea, and you can start small, but grow a lot bigger over the course of a year or two. That’s why this is such an established industry – there’s always room for real estate businesses to grow and improve.
So, if this interests you, then here is a very simple guide to help you start a buy-to-let business:
Getting your first property
To start making money from this business idea, you need to own property. As such, one of your main concerns is getting your hands on a property of kinds, which you can then prepare to rent out. You may think that getting your first property is simply a case of walking into an estate agent and buying it. However, there are plenty of ideas you should consider, which can help you save money on this purchase:
- Auctions: Going to an auction to find your first property is a good idea. Often, auctions are where the best deals are found. Some people are ordered to sell their house because they went bankrupt or whatever, meaning it gets repossessed and sold at an auction somewhere. Here, you have a chance to buy properties that aren’t on the general market.
- Building a home: Alternatively, you could try building your first property. This is a smart idea as you can decide how your property will look from the ground up. There are loads of first home builders out there that you can hire and work with to build this house. So, if you have a particular market in mind, you can build a house that appeals to them. For example, let’s say you want to target young homeowners or millennials, in which case you can build a house that’s very modern and futuristic. Of course, you could also build a property that can be used as multiple apartments so you can find multiple tenants for the same building.
If you want to keep the costs of owning property as low as possible, these two options are probably your best bet. Naturally, I’m not saying you should completely avoid the conventional approach. If you do decide to buy a home via an estate agent, then ensure you look for houses at the right time, when prices aren’t too high. Also, bring your best negotiations tactics to buy the property for as little money as possible.
By reducing how much it cost to get your property, you will reduce how long it takes to repay those costs through rental income. As a consequence, you can start earning a true profit earlier on.
Finding your tenants
Obviously, having control of property really doesn’t get you anywhere if you haven’t got any tenants. Tenants are the people paying you money, it’s vital that you find them as soon as possible.
How do you do this? Well, it all comes from advertising. You need to spread the word about your property, showing people that it’s up for rent. To do this, you can simply go to property websites and list your house/apartment on there. Fill in all the details such as location, amenities, number of rooms, etc. to draw as many people in as possible. Upload pictures too; people respond well to visual material. If possible, go the extra mile and film a tour of your property, showing people what it’s like, and tempting them to get in contact with you.
Don’t just rely on these websites, look for all other possibilities too. Post an advert on Facebook and get people in the area to share it around, increasing your pull. The more you get your property out there, the more prospective tenants you’ll have contacting you.
Managing your property
Following on from the point above, you also need to think about managing your property. This includes looking after it, liaising with tenants, and just generally ensuring you provide a good place to live. Fail to provide your tenants with a safe and functional home, and you could end up in legal trouble.
When you only have a handful of properties, you can probably manage them yourself. However, as you get more successful – and have more properties, more tenants – then it makes sense to work with other real estate companies. Estate agents often provide property management services, where they take control of everything for you. They act as the middleman, communicating with your tenants and doing regular inspections to ensure they take care of your properties.
The added benefit of property management services is that you get the estate agents marketing power on your side too. They’ll advertise your properties in their office windows, on their website, and across their social media.
Grow your business
Naturally, you need to think about growing your business and making more and more money. The best way to do this is by investing your profits in more properties. The more properties you have, the more tenants you can find, and the more rent you’ll get.
It’s a simple equation, and the key is to diversify your property investments. Don’t just buy loads of houses in the same area. Invest in apartments, houses, and different properties in different locations. Eventually, you should earn enough to invest in overseas properties and expand into different housing markets too!
Evidently, you can make a lot of money from a buy-to-let business. It’s one of those ideas that can feel slow to start with, but quickly picks up a lot of pace. The startup costs will be fairly high, but you’ll reap the rewards in the future. For me, it’s a clever way of taking investment and turning it into a booming business.