Last time we looked at market research and one of the topics to research is the properties currently available for rent in your area. You can find them on your competitors’ websites and listed in the local media. List ALL available properties near you. It is an excellent exercise to type them in your word processor and list them in order of price. Most real estate agents leave price lists as PCMs.
Those are Calendar Month prices, although in some areas prices are listed weekly, particularly in and around London. Make sure when you compare prices, you compare likes to likes. You should double check to see how the agency lists properties in your country, in your area.
When each newspaper ad appears, enter the new prices on your list in the correct positions, cheapest first, most expensive last. What’s the point of this? You enjoy almost without realizing how valuable a separate bungalow (rent-wise) in one area of your city or district, or a two-bedroom apartment in another.
This is all part of building your knowledge of becoming a local expert in property rentals. And when valuing properties for real rentals, you already have a comprehensive list to refer to. True, this property is not yours, not yet, but it doesn’t matter, you can go to school with this assessment, and they will teach you a lot.
But of course you need a property to let yourself in, so let’s take it. But where will you find them? They are out there and they are waiting for you, believe me, more than ever. Here he is. 1. Do you or your friends or relatives own any vacant property? Has anyone you know died recently? If so, what happened to the house? Do you know a property that has been on sale for months and has not yet been sold? All of these could be your first instructions.
Checked with the owner and casually asked if they had considered letting. If a property stands vacant it is costing money. If left unchecked, it makes money, and that’s a huge difference. And think about this. When people inherit property, why are they always in a rush to sell it? The answer of course was money, they had probably never seen that kind of money before, and couldn’t wait to spend it on world yachts and German sports cars. But what happens in a year or two when the money is gone? They are back to square one. Stoney broke.
But if the house is rented out, the property will make money forever, not counting the fact that over time its value will also increase. You can only sell the house once, you can rent it forever, and like everything else over time, the rent will increase. If you know someone who is desperate to sell their legacy home, talk to them. Show them. Why Sell? Why do people sell? This is a mistake. If they really need cash, they can always go to the bank manager and take out a loan, but keep the house. This is a dairy cow, it has always been and always will be.
Second, why not rent out the house you live in now? What! Yes, I’m serious, you want the property to be abandoned, don’t you? Why not start with yourself? Maybe the kids have grown up and left the house and you are now circling in a big 4 bedroom house. Do you really need all that space? You may not.
So why not rent a two-bedroom bungalow that is smaller and cheaper to live in for a year or two, and rent out your house? You’re not selling your house at all, and if you really miss it, you can always come back to it when the lease expires. And if you’re going to rent out your own house, make sure you value it very much, because there’s no point in going through all those costs and troubles unless you make money doing it. Right? Rate it high and if possible, you make money, if not, then what, you have nothing to lose. I’ve done this twice and it worked really well for me.
But we want more, of course. Put on your walking shoes and head out and take a trip around the area. Take a notebook and visit all the sites where postcard ads are shown. This may be in post offices, work canteens, supermarkets, shopping malls, newsstands, anywhere where a small advertisement awaits you. It is common to find properties listed there. Maybe two or three at each site on a good day.
Take note of the details and especially the phone number and return home. Of course these properties are not yours either, but with a little effort they can be yours. How? By calling the owner of course.
Cold calling is not an easy thing to do, and should only be done when you are at your best. Make a few notes about what you have to say before calling anyone, because we can all dry up suddenly. Smile, and call them. You don’t have to look at someone to know if they’re smiling, you can hear it in their voice, and don’t we all prefer to deal with cheerful and attractive people? Everyone is interesting on the phone! You call, and the person answers.
Imagine someone advertising an apartment for rent for 500 per month. Be polite, say good morning, be honest and forthright and let them know that you have just started a new rental agency, that you have good tenants waiting, (you will have when you start advertising, and I will return to there.) and that you might be able to let them flat. Sit back and wait for their response!
Some landlords will not talk to agents under any circumstances. Some landlords won’t do business with an agent even if you offer them 10,000 per month and free beer forever. Life is like that. Landlords are just like the rest of us, some are open-minded and will consider reasonable advice, others are closed-minded and ignorant, some are downright rude, even rude. Good luck to them. All you’re trying to do is help them give up their property, and if they can’t see it, it’s their loss.
Some landlords may say “no, I need 500 just to cover the mortgage so I can’t afford the above agency fees.” That’s okay, you can pay them that 500 per month, if you let the property cost 550 per month, (allowing your 10% commission) and that is so close to their price that it makes no difference. Suggest putting a flat in your book for 550. At this stage all you want is instructions. In the initial period, prices are secondary.
Get the instructions first, and then worry about leaving the property after. Tell the landlord that you’ll be happy to use it for 550, and since this will be on a no let – no fee basis, what’s the landlord’s loss? Nothing, basically they hire you for FREE, they only pay you anything if you succeed. Most intelligent people can see the benefit in that.
And then there are the amateur landlords who don’t know what they’re doing. Maybe they inherited grandma’s house, and they really didn’t want to sell it, but on the other hand they were too busy to chase tenants all day. Maybe they don’t know how to find tenants, or how to reference tenants. Not everyone knows this, don’t imagine them knowing. This landlord is the type of person you are looking for.
They are the perfect client for you and when you find them, approach them furiously. You can solve all their property problems for them, and make money for yourself. Suggest they may want to meet you at a property that will be allowed.
If they show a tendency to do this, make an appointment to see them as soon as possible. Don’t make appointments for next week; don’t make an appointment for tomorrow, how about this afternoon? How about in twenty minutes? Enthusiasm is everything. Big & Impressive may not be able to meet them in half an hour, but you can. Take your camera and ask if it’s okay to take pictures of the house.
Take your diary and jot down everything that needs to be noted. You don’t need to measure the room, no agency does that, don’t even consider it, because it would be a waste of time and could cause you headaches in the future if you make a mistake.
Remember, you’ll do whatever makes sense to get hold of the property, and if that includes getting out in the rain within ten minutes, then go for it. You can do exactly the same thing by popping the little private ad you see for a property to be allowed in the local paper. Call them, introduce yourself and offer your services. Offer them a small discount if necessary.
But remember this, you will be backheed many times, rejected, but hey so what? You will also be invited to take it further many times too, I guarantee that. Why? Simple, because there are so many new landlords and amateurs out there, many of whom have vacant properties, and many of whom can’t afford to have no income. If they do, they run the real risk of a foreclosed home if the mortgage is not paid.
Not all landlords have cash, it’s very easy to get into properties bought for rent, but sometimes very hard to get out of. These landlords are stuck, they HAVE to let the property go and that’s why a lot of people would be too happy to hear from a cheerful character (you!) who might solve all their problems. Be persistent, stick with it, and once you’ve accumulated three or four properties, you’ll be one step closer to actually launching your business.
It’s important that from day one you include actual properties to enable your initial advertising, as that’s the main reason most of your potential customers will read your ad, to see what’s available. Be creative, enthusiastic, clueless and confident, and you will attract property and you will let it. Trust me, there are a lot of desperate landlords out there and they will instruct you if they think you will move their vacant houses and apartments.
Check out the other agency ads that run week after week in the local paper. They can only afford to pay for these ads because they are producing business. But a word of warning here. All property ads always generate fewer responses than you might optimistically imagine.
But that’s okay, because each property you list and rent will earn you around 1,000, up to $2,000 in year-round income, some more, some less. So you don’t have to sign up and leave tens and tens of each ad, although that’s fine. If you can sign up two or three in a week, and let one or two of them get started, then you’re doing very well, and your business will grow quickly.
If you rent only one property a week, you will reach your goal of over fifty successful permits by the end of the year. If you do, you’re on target for 50,000 annual revenue, (nearly $90,000) and that’s before all the other income streams you can tag that we’ll look at later. Yes, I know you will have expenses, but what business doesn’t? I let twelve properties in one month during my freshman year, and you can imagine how happy I was with that, and there’s absolutely nothing stopping you from doing the same.
Quite the opposite, because as I said earlier, there are more properties for rent around the world today than ever before, and it seems like more people are looking to rent them. Yes there is competition, of course there is, but you are well on your way to becoming a rental property expert in your area because you learn everything there is to know, and because YOU are much more enthusiastic than your tired competitors who don’t really care if they are. lose certain properties or not.
Look forward to the next article in this series entitled “Finding Tenants For Your Property Business” and good luck with your future business.