A goal without a plan is merely a wish. Therefore, for any rental property investment to fulfill its potential purposes and achieve its goals, it needs a business plan. This plan should outline the goals and expectations of the property, any associated risks, as well as what is to be done to achieve these goals. A rental property business plan also comes with multiple benefits, and this article will further elaborate on the essence of the plan. You will also get access to our unique template, which will serve as a guide on how to write a business plan for your rental property investment.
If you wish to avoid this whole process, you can stick to our pre-made rental property business plan and get your business plan immediately, but if not, let’s proceed.
What Is a Rental Property Business Plan?
A rental property business plan is a set of guidelines that can be used for a rental property investment to help analyze the benefits and risks associated with it, as well as outline what should be done to maximize its potential. The property rental business is a very vast industry in the UK and only a business plan can guarantee the success of this investment.
The essence of writing a business plan before starting any business is for you to have a blueprint of how you want to set up, manage, and expand your business. Having looked at this, let’s discover how to write a business plan for your rental property investment using the template below.
How to Write a Business Plan for your Rental Property Investment
Most of the time, it is not really about the plan; instead, it is the planning itself. To own a professional business plan that can serve its full potential, you will need to follow some basic procedures that would show you how to write a rental property business plan for your investment. This guide will show you some elements that should be present in a business plan.
#1. Executive Summary
This is an important section that should contain a clear summary of what your whole business idea entails. The executive summary of your plan is mostly what your readers look forward to reading, so it should sum up other sections of your business plan and describe your ideas properly.
#2. Company Description
Just like the name implies, this should be about your company itself. This is where you should include the services you offer and also talk about your location and the management team. Talk more about the company’s history and its current status in the market. You can include some successful projects you have previously worked on.
#3. Market Analysis
Before you write on this section of your rental property business plan, you should run some research on your market to understand what you are signing up for and get valid information for this section. When you have completed your research, you will need to write down everything you found out about the market. You can include the market trend, target market, market position, and how you will reach out to your market. You can also include a competitive analysis.
#4. Sales and Marketing Strategy
For a business to be successful, it needs to be in constant sales mode. For this to happen, you need to have a clear marketing strategy that attracts customers to your rental property business. While doing this, you will need to have your target audience and market position in mind. You can create fliers, open social media platforms, and advertise in magazines just to create awareness.
#5. Organization and Management
Who handles your business with you? What are their roles and responsibilities? These questions should be answered in this section of your plan. You will need to talk about your management team and their roles in the company.
#6. Financial Plan
This is one of the most crucial parts of your business plan and should be written with utmost importance. To make this section easy to comprehend, it is best to plan your finances to avoid having issues later on. This section of your rental property business plan should include your financial history, funding, cash flow statement, and balance sheet.
Is Rental Property a Good Investment in 2023?
You can determine if your rental property business is a good investment when your net cash flow remains consistently positive. In general, a good rule of thumb is if you can rent a property for 1 percent of the purchase cost, then it may be worth your investment.
Rental Property Business Plan Template
Aside from writing a plan, you also need a template checklist to verify that your investment is in check. The essence of this rental property business plan template is to ensure that you keep track of the whole processes involved in starting a proper rental property investment. These steps include:
- Join a real estate community
- Narrow down your niche
- Have a financial plan
- Get your management team
- Get a business plan
- Adopt a marketing technique
- Manage the properties
What Type of Business is best for rental Properties?
When it comes to selecting the best rental property business to go for, it is advisable to choose a Limited Liability Company. Real estate investing is normally prone to high capital investments and facing risks, but with the presence of an LLC, you will be able to separate your private and business dealings.
What Rental Properties are the Most Profitable?
To get a full potential and profitable property investment, you should choose properties with a high ROI. An example of this ROI is Airbnb and traditional rental properties. With these properties, you will be able to earn a consistent monthly positive cash flow and achieve immense profit within a short period.
Is Rental Income Taxable?
Yes, rental income is taxable, but it doesn’t mean that every penny you collect from your tenants is taxable. You can reduce your rental income by subtracting expenses that you incur to get your property ready to rent and then maintain it as a rental.
Is Buying Rental Property Worth it?
Buying a rental property is worth it because it can be a lucrative way to increase your wealth and earn profits. On the other hand, handling a rental property can come with many difficulties and risks. But aside from those obvious challenges, rental property is a worthwhile investment when you understand the basics.
How Much Profit Should You Make on a Rental Property?
You should be able to make at least 5-8 percent profit per month on any rental property you own. You can also earn more than the above number depending on your rental location, size, and home type.
Need Help Creating Your Rental Property Business Plan?
It’s obvious you might have tried composing your business plan by yourself but it seems tough to handle, but don’t worry. The idea of writing a business plan might be fun but the process is daunting especially when it is your first time.
A quick solution to this is opting in for a ready-made rental property business plan, and at Businessyield consult, we specialize in creating professional business plans for entrepreneurs like you. We have also helped multiple businesses stand on their feet with our unique business plan.
What then is the wait for? Don’t you want to get your business running? Get access to your business plan here and keep those business ideas in check.
Final Thoughts
A business plan is more than a document that outlines the goals and systems you can employ to achieve them, a business plan is more like a confidence booster that always gives you a feeling of certainty. Having a good business plan also comes with maintaining good finances and a proper marketing strategy. So whenever you are ready to start your rental property business, always start with a business plan.
FAQs
How can I measure my rental property profits?
To measure your profits, there are four main ways you can apply to get a correct measurement. You can either use cash flow, a cap rate, cash-on-cash return, or ROI. Monitoring each of these metrics on a regular basis can help keep the financial performance of your rental property on track and help ensure that your long-term financial goals are being met.
Can you be rich from rental property?
Absolutely yes, you can. When you own a rental property, you can get rich as a landlord. In some cases, it can turn out to be the opposite too. You can either earn massive profits or find yourself repairing leaning roofs and dealing with non-paying tenants. Owning a rental property comes with its own substantial risks.
How many rental properties do you need to make a living?
To make massive profits, you will need an average of 15 to 20 properties. Having this much property will cover up your losses and replace your income for the average person.
How much do landlords earn in the UK?
How much do landlords earn in the UK? UK landlords earn an average of £15,000 a year. In the UK you would find out that most rental properties are owned by private individuals and a few work as a part of an organization. And the private individuals before the deduction of taxes earn more than other landlords.
