How to set up a property rental business in the UK? If that’s your question, it’s getting answered here and now.
You can use most of these tips not just for the UK, but anywhere else. Of course, if you’re targeting the UK specifically, you’ve landed on the right page.
So, I’ll cover all the points you should pay attention to, as well as points that aren’t that important but wouldn’t hurt if you peek.
Let’s get started then?
Table of Contents
Location
When it comes to real estate, location is almost the primary decisive factor in terms of pricing, isn’t it? The property itself isn’t as important as where it’s located and what’s near it.
You must sync your customer-base with your location. You aren’t going to sell to retired employees, you’ll be “renting” and that’s something mostly done by the young folks. So, you’ll need to ask yourself what do they want? The answer is mostly good transportation, marketplaces, safety, employment centres and anything else that your research throws at you. Be sure to pay attention to these factors when deciding the location for your property.
Do a thorough research
The rental business demands heavy investments and the profits aren’t immediate. Hence, your research needs to be airtight.
You can start with analyzing the current demand and prices for your chosen location. All you’ve got to do is search platforms in your area that offer apartments for rent. E.g. If you’re in Wolverhampton, a simple search for flats to rent in Wolverhampton will give you the results. Look at the locations, prices being demanded, features being offered and any existing bids. I recommend doing this consistently for a few days. The frequency of properties being delisted or new ones being listed will tell you the demand.
Get yourself fully licensed
You can’t just buy/rent a property and start renting it out. For your and your tenants’ safety, you’d need to procure a few licences before you’re allowed to start renting. While the licences differ slightly. Just some of the licences you may need include the landlord’s licence, the safety licences for gas and electricity etc. Some places may also have region-specific licences. This means depending on your exact property location, you may need special zonal licences if they fall within special zones.
You can either talk to someone who’s in the business or directly contact the city council and request thorough information on all the required licences. Basically, ensure your business is compliant so you don’t run into problems in the future.
Managing the business right
Setting up the property is just the first step! Your profits or losses would be decided by what you do next.
I’ll say you should develop a business plan. It’s basically your entire plan of how you’ll set up, expand, expose, market, and advertise your business. Having a written, definite goal does make things easy.
You can also use property management software that makes things even easier. They reduce paperwork, keep things organized, facilitate communication and so much more.
The point is, do not jump into it with the “I’ll plan as I go” mindset, not good.
Set competitive (not low) prices
If you followed this guide thus far, you should have an idea of the average rent for your location by now.
The rent you can demand for your property would of course depend on tons of factors. The location, building and amenities of course being the primary ones.
However, do note that simply offering a low rent isn’t advised. This is primarily because the rental business isn’t exactly a “recurring” business model. Your tenants are more permanent and offering cheaper rates wouldn’t increase your recurring sales.
Secondly, no matter your intentions, human psychology associates “cheap” with “problematic”. Hence, if your prices are very low, you’ll actually scare off tenants.
Hence, I’d recommend setting your prices just tad-bit lower than the competition but in the same price-range.
Get exposure/audience
So, you’ve a rental property but unless people know of it, you ain’t making any money. Well, that’s where advertising and marketing come in. You need to be visible to people and they need to know you’re available for a deal.
The best way to get this exposure is to list your property on property rental websites. Depending on your country and region, the websites will differ. NYC has Zillow and Apartments, UK has Zoopia, Rightmove and so on.
As for the listing, make sure you include the latest pictures of your property. Also ensure you wash up and decorate your place as much as possible. Basically, present it in the best possible image. Also be sure to list the amenities.
Something that may help you is being open to negotiations. If your platform allows, tick a box or include a note that says you’re open for a price discussion. At the least, it gets you more conversations.
Conclusion
That’s it folks. I hope you’ve covered at least some bases as far as the UK property rental business goes?
Simply ensure that you’re complying with all the legalities and there are no legal loopholes. That’s the biggest obstacle you need to overcome. Once that’s done, simply tick off the other factors listed here and you should be golden.
