Do you have a property for rent? Here are My 10 Tips

So, let me share with you ten tips that you may already have in mind, but maybe not. Having participated in a few hundred rentals during the years I was a real estate investment consultant, I would tell you to keep the following in mind, to avoid possible issues:

1. Empty property costs more + calculate every five years

Two or three years is a short time, ten is very long. Try to calculate the rent of your property every five years. What does this mean; For example, if you want a rent of 1,000 Euros/month and the purchase is at 700, your property can be rented for 2 out of 5 years. You will have received 24,000 Euros and you will feel good that you achieved the best rent in the market, but the one who rented with 700 Euros will have received 42,000 in the same period.

Do not be dazzled by big words. Look at the substance and how much money you can earn realistically, not how much you imagine or dream or if it says that the person next door made it. I know in my country hundreds of property owners who have always been looking for only the maximum price. Less than 5% of them managed to pay the huge amount in the long run. On the contrary, more than 50% were trapped and involved in ugly and distressing situations…

2. Make the papers correctly + Study the area and its prospects

Do not be another… harrower! Put, man, the papers of your property in a row, make sure you have a plan, a floor plan, and everything else needed to understand the tenant who is going to rent. Saying “I have these papers and if you like them” does not seem like magic, you usually lose money, since the serious good payers disappear.

Also, deal a little with the area where your property is located. Record her positives and negatives + prepare answers for the negatives and learn to present the positives easily and simply. This is good to do for the property itself.

3. Contract without (good) lawyer = accident pending. Make clear agreements

Your stamp, electricity and water clocks, increases and adjustments, and your rights and obligations should be clearly described in a way that does not allow disputes. What he writes, he does not write down and you do not leave anything to his fate, to the good intention and mood of the two parties, and to what is “understood/is self-evident” etc.

Nothing in life is self-evident, especially when it is not written by a good lawyer. Yes, I know you want to keep your costs to a minimum, but a bad contract can cost you 100 times as much. Give up gossip and do everything right, sleep soundly at night.

Attention to the calculation of inflation…

4. Is your tenant comfortable with the rent? Can he go out as well?

Do not start “I do not care if it comes out or not, I want to get the money I ask and if he can not, I will give it to the next one”. If, for example, in one area the rent for a good store is 2,000 Euros and you ask for 6,000, who do you think will rent the store to you? Is anyone serious? He will quickly tell you that he is “coming in” and will start looking for problems and ways to stay in, without paying the agreed rent.

The same goes for a renter. You can not learn much, but often with simple questions, you understand if the person in front of you can cope with the rent you ask for.

5. Who rents? Who invests? Who guarantees?

I would suggest you respect the one who “throws money” to build the shop/house you rent. In all likelihood, he will do what he can to support his investment and not lose it. Usually, most do not respect the investor, do not count the five years but the “next month” and end up losing something serious, resulting in something more “airy”.

It is very important to understand as much as you can who rents, which legal scheme, who guarantees that the rent you agreed to be paid, etc. Especially in the legal scheme give a basis why…

6. The great dangers of the “tenant”

Or if you rent your space in a company, for example, with an unknown owner who does not identify with the person in front of you, you can get involved very badly.

Such a company, without entity, income, expenses, funds, and fixed assets, can block your property for 2–4 years until you manage to evict it.

Be very careful when we talk about renting. It’s not necessarily a bad thing, but he wants an extremely good lawyer to get it right and not find himself hiring someone else tomorrow…

7. Away from the “black” (money)

Do you think it is difficult to fall for a tenant who will sign you a contract with a lower price “and the rest is black” and after a couple of years will tell you “I pay the contract”? Believe me, it’s easier than you think.

I know, taxation is prohibitive, on the verge of a joke. If you have a good lawyer and accountant, look for other ways, to become more “creative” with the subject. However, not with undeclared money, you can be harmed for many years…

8. Respect the broker

Most property owners are reluctant to pay real estate agents and do everything they can to avoid real estate agents, considering their work useless. True, 8 out of 10 are like that, but at the same time, there are a lot of serious people in this profession.

Your message needs to reach you as quickly as possible, to as many potential tenants as you can, so you will win the highest price and you will be able to see more interested people, in order to reach the right one.

Let the broker live too. Respect him, give him ready-made and correct papers (or ask him to prepare them for you) and if he brings you a client, pay him. You usually come out of all this victorious.

9. Is it better to sell it?

I see people renting real estate that obviously is not in their interest to keep it, but they do not understand it… Example: A house worth 400,000 Euros must have a rent that will yield at least 16,000 Euros after taxes, municipality, and other charges, to be worth it, we keep it. (One would say that the 4% yield is very low when inflation is higher, but let’s say that inflation will fall in the future).

If the property of 400,000 is rented at 800 Euros/month, then its net return will be below 8,000 Euros/year, below 2%. If you sell it for 400,000, you will get the rents of 50 (fifty) years in advance and you will be able to invest them in other opportunities.

If the returns end up at “funny” levels, think about whether it is in your best interest to sell, especially if you are trying to find the next investment opportunity first.

10. Do not be greedy, let the other life

True, indeed 1–2 owners in 100 manage to impose unbearable conditions on their tenant and suck his marrow, without financial losses. But these are the exception and not the rule. Which rule says that if you do not leave a little space for the other to “breathe”, even “yes” to say today, he will always have in mind how he will bring it to you, how he will bite you, how he will balance this anomaly.

Bonus: You are renting a property. You are not going to solve your psychological problems with this, nor are you the ruler of people and souls!

I know, that when you own, especially if you have a property in demand, in an area of ​​interest, you feel like a king. Your brokers make temples, the tenants please you and not only.

But let me tell you — it’s not a bad thing at all because you’re just talking nonsense and trying to figure out what to do with yourself because you’re just getting more money today. You are not the ruler of people and souls!

Life is a wheel and it turns. I assure you that every time you treat someone badly by taking advantage of your position, you will be in their position at least one more time and they will treat you in the same or worse way, in a hospital or elsewhere.

Rent your property, do what you like, and ask for what you want. But do not forget to remain human, not a monster, nor someone complex who breaks out in others to overcome his own personal impasses.

Do it for a while, it will work out for you!

And remember: The best rent is the one that has been collected.

What do you think?