Out of all the business ventures in the world, perhaps one of the industries with increased certainty of making a profit, more so than any of the others, is real estate. They’ll always be people wanting to live in places that they can call home. No matter how volatile the global economy is, investing in real estate is a stable bet to place. Sometimes referred to as rent-to-rent, this is why it’s very useful if you want to make extra money on the side, to buy grandiose apartments and sublet them to financially strong clients. Whether they’re young professionals or seasoned business owners who want a getaway pad for their summer holidays, renting out an apartment with a great community is a lucrative move. Before you leap in and get your money at the ready, there are a few risks you should work to minimize and start looking for the right kind of property to invest in.
A property with allure
A property that you’re going to sublet to wealthy tenants should meet their needs and expectations. Therefore the whole package matters, because it isn’t just the property itself that you’re selling, it’s the encompassing nature of the area. The neighborhood, local facilities and access to amenities should all be juggling in your mind when property hunting. Customers who are in the market for luxury pads will pay extra for apartments which have large rooms like these apartments. With two bedrooms and floor plans with almost 1000 square-feet, there is more than enough room for two adults and even a small family. Additionally, pleasant surprises like swimming pools and a great view, would put you high up on the list.
Is it viable?
Subletting is a great business, but it requires cooperation with the company you’re renting the apartment from. As the renter you will sublet your place to another person, who the landlord has not met and has little reassurance of. Companies need to be contacted to let them know of your intentions, and you may need to fill in extra forms or go through additional interview questions. You may be violating their company practice or the state law if you don’t inform them and get the confirmation of the landlord who owns the apartment. Many companies are willing to allow you to sublet but may demand an additional fee. Work out how the fee and the monthly price can coexist together so you can make a healthy profit.
Pick the right tenant
There are risks associated with subletting. Even if you have the go-ahead from the landlord, it doesn’t mean you’re on the home stretch. You must undertake a stringent interview process to make sure the client you’re taking on is responsible and financially able to afford the monthly fees. You are ultimately held accountable for any damage or late payments, so you shouldn’t take this lightly. You need to minimize the risk. One way is to run a credit score rating on potential clients. You should also ask for a deposit, so they stick to their agreement for fear of losing a good amount of money if they misbehave. Get the client to sign a subletting residential contract to make sure both parties are obligated to one another, creating a layer of certainty.
Subletting can be a lucrative business venture if done correctly. You have flexibility, where you can set the price of the apartment and target wealthy clients who are looking for the location and convenience. Plan carefully, and weigh up the financial risks and burdens before signing a contract to sublet your rented apartment.
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