Another Biz Idea: Tenant Farming
Nov. 6th, 2004 07:00 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
swestrupWhile visiting ![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
nancyrihakova the other day, _sps_ had an idea for a business that would most likely be lucrative, and I thought I would share it.
We were discussing the fact that owning rental property and being a landlord had major advantages and that rental property was easier to get mortgages on than non-rental, and thus one can often afford a $450,000 rental property with the same sort of collateral that would only get you a $200,000 personal property. The downside to all of this, of course, is the tenants. If you have good tenants then all goes well, but when they are the tenants from hell, the rental property can often become a money sink.
So, the solution seems clear: Tenant Insurance. For a certain percentage of the monthy mortgage, the business checks the credit ratings of potential clients, lets them know if they miss too many payments (or are habitually late) handles compaints from other tenants, and takes legal action to evict someone when necessary. Since most of the time, most people are good tenants, the business mostly sits there and does nothing, and so makes a tidy profit. The rub is that they occasionally have to deal with the messiest of situations, but that's why the landowners are willing to pay the percentage.
Such a company, lets call it a Virtual Rental Office for want of a better term, could easily branch out into similar sidelines. For a monthly fee depending on the size and type of property involved, they could undertake to:
For its part, the Virtual Rental Office can make substantial money off of rental income, without ever owning any rental property. The only things you would need for this to succeed is:
Oh, and for the obligatory geek tie-ins, one of the many services that one would offer client buildings would be Wireless Internet, TV, Music and VOIP, the possible connection to NWO is left as an excercise for the reader.
nancyrihakova the other day, _sps_ had an idea for a business that would most likely be lucrative, and I thought I would share it.We were discussing the fact that owning rental property and being a landlord had major advantages and that rental property was easier to get mortgages on than non-rental, and thus one can often afford a $450,000 rental property with the same sort of collateral that would only get you a $200,000 personal property. The downside to all of this, of course, is the tenants. If you have good tenants then all goes well, but when they are the tenants from hell, the rental property can often become a money sink.
So, the solution seems clear: Tenant Insurance. For a certain percentage of the monthy mortgage, the business checks the credit ratings of potential clients, lets them know if they miss too many payments (or are habitually late) handles compaints from other tenants, and takes legal action to evict someone when necessary. Since most of the time, most people are good tenants, the business mostly sits there and does nothing, and so makes a tidy profit. The rub is that they occasionally have to deal with the messiest of situations, but that's why the landowners are willing to pay the percentage.
Such a company, lets call it a Virtual Rental Office for want of a better term, could easily branch out into similar sidelines. For a monthly fee depending on the size and type of property involved, they could undertake to:
- Collect and redistribute rent monies
- Provide regular janitorial services
- Provide emergency repair services
- Handle complaints and suggestions from tenants
- Handle property upkeep and maintenance.
- Advertise vacant properties and negotiate rental contracts.
- Pay property taxes and ensure the property met all relevant building codes.
- Undertake regular property upgrades and beautification initiatives.
For its part, the Virtual Rental Office can make substantial money off of rental income, without ever owning any rental property. The only things you would need for this to succeed is:
- Someone who has had extensive experience managing a large rental property in the first target city, so that you can draw on their expertise.
- A strong commitment to customer satisfaction, both of the tenants, and of the landowners. Your success will depend on keeping BOTH happy, as you are acting as an interface between the two groups.
Oh, and for the obligatory geek tie-ins, one of the many services that one would offer client buildings would be Wireless Internet, TV, Music and VOIP, the possible connection to NWO is left as an excercise for the reader.
