How to Start a Business Buying Apartments & Renting Them
Apartments can do very well in urban areas.
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- 1 Start a Rental Property Business
- 2 Start My Own Real Estate Business
- 3 Make Money Buying & Selling a Home
- 4 Rent an Apartment for Business Purposes
The post-recession housing market in the early 21st century saw a shift away from home ownership to home renting, giving a steady boost to the apartment-rental niche of the market. Buying apartments and renting them can provide solid opportunities for real estate investment companies, since apartments attract tenants in both good times and bad. Knowing how to start a business buying apartments and renting them is the first step in entering this lucrative real estate niche.
Register your business in your state. Consider using the limited liability company (LLC) form of organization to gain a measure of financial protection from the business’s debts. Organizing your business as an LLC or a private corporation can provide the management control afforded by the sole proprietorship form of organization while protecting you from being held personally responsible for multiple mortgages in the worst-case scenario.
Obtain a residential real estate license in your state. Contact the department of revenue in your state to ascertain which agency handles real estate licensing. Houston entrepreneurs, for example, work with the Texas Real Estate Commission, but the specific agency varies by state. Fulfill all requirements to obtain your license, as set forth by the licensing agency. License requirements generally include attending a state-certified training course, passing a licensing exam and paying an exam fee.
Establish business credit for your new company. Mortgage lenders are hesitant to lend to new companies without a credit history. Your personal credit can give you a significant edge in this area, but there are still a few things you can do to build a brief credit history for your company. Open trade accounts with several large chain suppliers, such as Staples, OfficeMax or Home Depot. These companies are accustomed to providing new businesses with their first credit accounts, and they will report your account to credit reporting agencies to quickly establish your credit.
Work with local mortgage lenders, real estate agents and property managers to locate properties for sale. Establish as many contacts as possible to receive quick notification when little-known properties are going up for sale. Attend foreclosure auctions on a regular basis, to find apartments in good condition at lower-than-market prices. When looking for apartments, seek out properties located close to public transportation and within walking distance of consumer staples providers such as grocery stores.
Purchase, refurbish and rent your apartment properties. Make sure your apartments always have new carpeting, fresh paint, new appliances and the full range of amenities offered by competing lessors in your area. Place property listings online, in local real estate listings and through your contacts in the community to spread the word about your properties.
SOURCE: SOURCE: NEF6.COM