How to open a real estate agency for renting out real estate

Having additional real estate, you can make a profit from it. Renting out an apartment is a truly profitable business. But is it so simple and safe? What risks do landlords bear?

It would seem that it is simpler - to rent out an apartment for a certain period, by concluding an agreement, and receive payment. All risks and force majeure will be spelled out in it, and there will be many fewer worries. But this is the most ideal option. In life, everything is much more complicated.

Even with an ideal legal purity of the transaction, there is a risk of meeting unscrupulous tenants who will pack up their belongings, and well, if only their own, and disappear in an unknown direction, without paying for the last month of living or leaving debts on utilities. To prevent such a situation, it is enough to agree on payment in advance. First, pay the bills yourself by increasing your rent by that amount. This way you can visit your property once a month to take meter readings and at the same time check the condition of your home. Second, when collecting rent, take it for the first and last month of your stay.

If, with a long-term lease, all the nuances can be stipulated in a notarized agreement, then if daily renting of housing is practiced, this is more difficult to do. Usually, those who want to rent an apartment for a day are not eager to fill out a lot of paperwork. A handwritten receipt often has no legal force. All troubles that may happen during the day of such a rental fall entirely on the shoulders of the lessor. You can avoid them by concluding an agreement with a real estate agency, which will act as an intermediary in such a transaction, and draw up the agreement on letterhead with all signatures and seals. A small loss of money is not worth the wasted nerves.

Perhaps the most important issue worrying those who rent out apartments is the possibility of evading paying taxes. In accordance with Russian law, any income must be declared and income tax paid. But there are some nuances here too. The tax police must prove “illegal business activity.” If your contracts do not exceed one year in duration, this will be very difficult to do. This is especially true for daily rentals. 3-NDFL must be submitted before the month of April following the reporting year. Therefore, if you are caught in the act of illegally renting, there is always time to pay the tax.

The text was prepared with the support of experts from the NDV-Real Estate agency https://arenda-kvartir.ndv.ru/

Rent an apartment through an agency: pros and cons

Many people face the problem of renting real estate. This raises the question of how to look for housing. In this case, there are two options: either use the services of an agency to rent an apartment, or search for a suitable option yourself. So what is more profitable and safer: to use the services of intermediaries, or to find an apartment yourself?

Interesting: Sample consent to replace a temporarily absent employee

By searching for an apartment on your own, you will certainly save a significant amount of money, but you will also have to spend your time. The realtor takes on all the work associated with finding an apartment that suits you, calls the owners, finds out from them the details you are interested in and arranges a viewing.

Is it worth renting an apartment through an agency?

What are the functions of the agency? Let's figure it out to decide whether it's worth using the services of a real estate office or maybe it makes sense to find the right apartment on your own? After all, if you pick up a newspaper of free advertisements and open the “real estate” section, you will find many offers, including rental housing, in any neighborhood and at any price, from economy class to housing in a good prestigious area. By contacting a real estate agency, you will receive exactly the same information about the availability of rental housing as in newspaper advertisements. Moreover, in such newspapers and other media there are a lot of publications from real estate agencies.

Interesting: Cash symbol contribution to the authorized capital

Firstly, you need to contact those agencies that are ready to charge you for services only after concluding an agreement. It often happens that when you call about an advertisement, they begin to describe the advantages of an apartment, but in the end they say that you can view it only after paying the agency. And after payment it turns out that the apartment is not worth even a penny.

Caveats and pitfalls

Now about the pitfalls. The real estate agency's commission ranges from 50 to 100% of the rental price, which is specified in both the service agreement and the rental agreement. As a rule, the commission is paid only if an agreement is concluded between the owner and the tenant. That is, in fact, the homeowner gives the realtor a certain amount from the first rent for the apartment.

There are agencies that work on a different principle - first they take a commission from the owner, calling it a payment for selecting and searching for potential tenants.

It’s better not to deal with such realtors

cooperate, since it is far from a fact that they will rent out your apartment before the end of the contract, and you will not return the money - after all, the service was provided.

Here lies another danger: by entrusting the keys to your apartment to an incompetent realtor or fraudster, you expose yourself to the risk of returning and finding that there is no furniture or equipment in the room, if all this was previously present. Or another option - your apartment will be rented out on a daily basis until a long-term tenant is found.

To rent an apartment

The rental process has many nuances. Only an experienced, sensible and reasonable person can take them all into account. The average tenant does not always fit this definition. Therefore, he often overpays rather than renting housing to benefit his own budget.

What is the best way to rent an apartment - through a real estate agency or on your own?
How to find an apartment without intermediaries - 4 proven methods
Method 2. Using newspapers and magazines
Method 3. Through ads
Method 4. Among friends and acquaintances
How to rent an apartment from the owner - step-by-step instructions for beginners
Step 2. Contact the author of the ad
Step 3. We arrange a meeting and inspect the property
Step 4. Conclude a lease agreement
Step 5. Record the meter readings at the time of conclusion of the contract
Who can help you rent a good apartment - review of the TOP 5 real estate agencies
How to avoid becoming a victim of scammers - 4 useful tips for renters
Tip 2. Cooperate with the landlord only through an agreement
Tip 3. Don’t pay a deposit before the transaction is completed
Tip 4. When collaborating with an agency, be sure to check it
Conclusion

26 Apr 2020 glavurist 172
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Apartment rent (in case of sublease)

The first thing you need to do is to carefully study all legal regulations. First, of course, you need to go through the banal registration of a legal entity; in other words, you need to open an individual entrepreneur if you plan to do this business for a long time. Thus, you can significantly reduce the cost of accounting; today, opening an individual entrepreneur costs about 5,000 thousand rubles.

If the apartment will be rented out exclusively to legal entities, then in this case it will be necessary to register as a Limited Liability Company. In this case, such a procedure will cost a little more, about 15 thousand. In order to earn a calm and stable income in this area of business, you need to pay about 15% of the profit to the tax service monthly or twice a year.

Subleasing is the process of re-letting real estate from a primary tenant to a secondary tenant. To formalize 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 living space.

Persons who plan to sublease rented property need to be aware that in the event 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 facility, 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 fortunately for the landlord, this is not the case. The sublessee is responsible to the person with whom he has a written agreement.

If you decide to sublet a home, carefully read the terms of the contract, and remember that the clause on a possible increase in payment is quite reasonable - if the owner increases the prices for the tenant, he, in turn, will have to increase them for you.

In our country, realtors are generally considered to be swindlers who want to rob us of our hard-earned money for their paltry services. This perception has been reinforced by massive cases of fraud by shell real estate companies.

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

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

Is it profitable to rent out housing for a day?

An apartment in a disadvantaged area is also not the best option for housing clients. Therefore, if you are determined to take out a loan, you should not skimp - you need to prepare at least 1,000,000 rubles.

The income and amount of money in a business depends directly on the area where the apartments are located. It is possible to make big profits from almost all categories of housing, except old and dilapidated ones.

Since this area is not new for a long time and has been quite well researched, we can say that either one-room apartments, which are rented just to spend the night, or three or four-room apartments, in which city guests or students stay, are popular.

My family moved to Russia, the union fell apart. ⠀ My father had no options to stay in the former Soviet republic (if you are a military man and not yet a citizen). ⠀ For 27 years, I certainly had thoughts of going to Riga, where I spent my childhood, but my family’s beliefs that they treat Russians badly, hate the Russian language, that we are occupiers for them, and so on, got in the way.

Renting apartments daily as a business

Hence, the return on investment according to the calculations given above will be from 6 months. But it is also necessary to take into account the fact that in the first months there will be few clients. You will need to work for more than one month before you develop a permanent client base and word of mouth begins to work. Therefore, the payback period for investments can be safely multiplied by two.

This is the most favorable option for entering the business. If you have two apartments, you risk nothing by renting out the second one. Constantly searching for clients who will stay with you for a couple of days will take a significant amount of time, but the losses are minimal. In the end, you can always stop working and rent out the apartment for a long time.

Therefore, it is easier and cheaper for a tourist or business trip to choose accommodation based on their financial capabilities.

This option is suitable for those who plan to run a business renting out apartments by the day for more than one year. If you purchase a home on credit and pay the mortgage using funds received from clients, your earnings will be relatively small, but in a few years you will own an excellent property. Here are the main expenses to consider if you are planning to purchase an apartment for business:

down payment of 10-30% of the cost of the apartment;
insurance costs that must be covered immediately when applying for a mortgage;
apartment renovation costs.

If the apartment, for example, has 3 beds, then no additional payment is provided for no more than three guests. You will need to pay extra if more people move in.

In general, daily apartments are selling like pies. Understandable, provided that you set a rising price. Although the guys booked an apartment before the 2020 World Cup and were ready to pay (which is a lot for us, it’s not always for them). I exhibit on Avito, sometimes in public pages on social networks. This is enough, so where additional advertising is needed, it is worth reviewing the living conditions and prices.

Individuals submit a tax return in form 3NDFL at the place of registration (you can fill it out on the website in electronic form) before April 30, and before July 15, calculate and pay the tax amount in the bank using the details of the tax authority.

Work on offline advertising. Print and post flyers, place advertisements in the most popular newspapers in the city, find taxi driver friends and negotiate with them to offer your services to passengers. Order advertising on transport by selecting routes departing from the station.

My first serious clients appeared literally on the same day when I posted an ad for daily rental housing on Avito. As I remember now, it was a couple in love who wanted to spend the night alone with each other.

In a large metropolis, housing is always in demand and will continue to be in demand. But even then there are low seasons.

If you can see from advertisement sites that there are many offers for daily rentals, then it makes sense to try, but if not, then it is better to take up long-term rentals. It may be less profitable, but definitely without much downtime.

There was a time when grandmothers stood at the station and shook their keys, inviting guests. Now there is the Internet, all the information is there. All business is moving to the World Wide Web. There is no longer any need to catch residents at stations and airports. Tips on how to rent out an apartment by the day will be discussed later in the article.

Daily rental of apartments is the most dynamically developing type of business. The development of the Internet makes it possible to conduct business from anywhere in the world.
Low entry threshold and quick payback up to 100% per month.
People are increasingly choosing apartments, houses, rooms rather than hotels.
Low costs compared to hotels.
Possibility of using daily rentals in your own or rented real estate.
Return on investment from 1 month.

The growth in daily rentals is ensured by:

1 billion travelers per year.
This number is increasing by 5.5% per year.
In 10 years the number will double.
The culture of travel is also changing, it is becoming more unconventional. People are looking for more unique experiences/locations (45% last year).
Over the next 5 years, the number of travelers who consider themselves researchers (not tourists) will increase by 1.8 billion.
Companies, including large corporations and holdings, prefer to rent in the private sector for their business travelers instead of hotels.

That is, in Moscow, a daily rental is about 30-35% more profitable than a long-term rental. And I recently found out what’s going on in Vladivostok - you’ll just gasp!