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Renting an apartment as a profitable business

The best option for starting a business without investment will be a daily apartment of living space. We will tell you how to do it correctly in the article.

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business concept

Since this area has not been new for a long time and has been studied quite well, it can be said that either one-room apartments are popular, which are rented just to spend the night, or three or four-room apartments, in which guests of the city or students settle.

In terms of profitability, one room is ideal. The owner saves on repairs, utility bills, and cleaning, while receiving the same money that he would have from a larger apartment. This is due to the fact that the cost of housing is mainly calculated not for one person, but for the living space as a whole.

It is best to rent apartments near railway stations, hospitals, and educational institutions. Due to the fact that housing can be left unattended for some time, it is better to give preference to the third and higher floor. This will slightly reduce the risk of break-ins and arson.

Initial Costs

Even if you have at your disposal several apartments owned by you personally, expenses cannot be avoided. And the rate of payback of objects depends on how clearly the advertisement is developed and all the conditions are thought out.

Items that you simply cannot do without:

Payment of utility bills. This item of expenditure lies entirely with the owners of the property, even if the guests spent a whole month in the rented apartment.
Payment for the services of cleaning companies or cleaners. Of course, these duties can be performed independently, but having several apartments, this will not be easy. And given the fact that an apartment can change guests every day, and you need to clean up after each one, apartment owners will have to devote their time to running around objects and cleaning.
Advertising. Fortunately, there are many free bulletin boards on the Internet that will allow you to convey information about the services you provide to potential customers. But the "sharks" of this market segment know that this is not enough, so they go for tricks, such as an agreement with taxi drivers, or the placement of promoters. The essence of such advertising is that a person who has just got off a bus or train, most often goes either to a taxi, or to people who offer housing immediately near the stations. A taxi driver can, as if by chance, recommend good accommodation to guests, and get his well-deserved percentage for this. The standard rate is 100 rubles per occupied apartment.
Do not forget about force majeure circumstances which usually cost a lot. This includes breakdown of equipment, repair costs, “flood” from neighbors, invasion of cockroaches, etc.
If you are not renting your apartment, and rented, then the costs will be much greater.
Realtor fees.
Repair, preparation of housing for operation.

It should always be remembered that troubles are easier (and cheaper) to prevent than to deal with them after the fact. If you know that the neighbors of the rented object have faulty plumbing or are “problematic”, take care of this in advance. After the first flood from the neighbors from above, force them to fix the problems in their apartment through the court, thus saving yourself from the source of danger.

IP registration

Since we have already determined that renting out apartments is a business, and, with the right approach, very profitable, then it needs to be formalized in accordance with the current legislation of the Russian Federation.

It should be noted that a person who rents out his or rented housing under a social contract (clause 2, clause 1, article 67 of the Housing Code of the Russian Federation) has the right to carry out his activities without. But for those who have more than five leased objects, it is better to play it safe and legalize their activities.

At the moment, in judicial practice, there are no cases of punishment for persons who rented housing without the status of an entrepreneur. The thing is that the very fact of entrepreneurial activity in this case is difficult to prove, because in fact it is your property and you can dispose of it as you like.

But there are a number of clear advantages in registering an IP:

Any claims against tenants can be resolved if all cases have been properly filed.
It is possible to prove the fact of residence of a person (persons) and damage to property in order to compensate for damage only with a lease agreement in hand.

Rent for an apartment (with sublease)

Sublease is the process of re-leasing real estate from a primary tenant to a secondary one. For registration of a sublease, a document is drawn up that has the format of a lease agreement and cannot have a validity period longer than the original document on the rental of housing.

Persons who plan to sublease the leased property need to be aware that in case of violation of the terms of the contract by the subtenant, the primary tenant will still have to answer to the owner.

The same applies to non-payment of utilities, non-compliance with the rules for using the entrusted object, and damage to property.

Because of this circumstance, legally illiterate subtenants decide that they do not bear any responsibility and can easily violate all the terms of the contract. Unfortunately for them, and to the joy of the landlord, this is not the case. The subtenant is liable to the person with whom he has a written agreement.

If you decide to sublet housing, carefully read the terms of the contract, and remember that the clause about a possible increase in payment is quite reasonable - if the owner raises the rates for the tenant, he, in turn, will have to raise them for you.

Realtor fees

But if you still decide to build a successful business in the field of rental housing, then you cannot do without the services of realtors. Such companies will allow the owner or tenant to find housing. The result is no downtime and constant income.

The main thing is to contact proven companies that you can trust not only you, but also people who are looking for housing.

home improvement

Undoubtedly, Soviet-style apartments can also be rented out, but do not forget that rumors spread quickly. Even if several people unknowingly or for lack of a vital alternative stop in such conditions, then in a few weeks even realtors will not agree to cooperate with you.

You need to invest in landscaping. If you do not have the funds for a major renovation, first take care of the health of the plumbing, the availability of hot water, good beds, a washing machine, and a refrigerator.

For many clients, it is not so much the style and decor that is important, but the functionality and cleanliness of the home. Therefore, even if the wallpaper in the apartment is not the newest, there should simply be no mold and torn edges!

fixed costs

From the entire above list of expenses, we can single out those that are permanent, and which cannot be avoided if you are aiming for a good result:

taxes (if you nevertheless issued an IP);
rent (if the apartment is not yours);
advertising (may be free);
cleaning and laundry;
utilities;

Income

The amount of income and the rate of payback of the project directly depend on:

the initial state of the living space;
the quality and quantity of advertising;
work of realtors;
your relationship with customers;
area where housing is located;

Typically, full-time daily rentals can recoup costs in less than six months, assuming there are no capital repairs.

How to look for clients?

The most productive ways to find clients are:

Announcements on Internet sites.
Arrangement of promoters at railway stations and agreement with taxi drivers.

Thus, customers themselves find you. Working on the Internet (creating communities in social networks, constantly updating the ad) greatly simplifies the process of finding an apartment.

Renting an apartment bought with a mortgage

The fact that someone bought an apartment with borrowed funds does not make him an inferior owner. Therefore, housing taken on a mortgage can be rented out in the same way as purchased for cash.

All items related to the disposal of housing are spelled out in the Mortgage Law. Theoretically, the bank could ban such activities, but would not do so. It is foolish for the banking system to cut off an additional source of income to the person who has issued a mortgage, which increases the chances of timely and full repayment of the debt.

Risks, pitfalls

The main danger of such a business- the safety of the apartment. But it can be minimized by issuing an IP and drawing up a lease agreement between guests and owners (tenants, subtenants).

Always ask for passports from people you are staying even for a day. And remember, having a simple copy of the passport without a contract in your hands, you are not entitled to any kind of claim. Safety or economy - the choice is yours.