Rental Property 2 – Laying Out the Plan

The Problem With Living in the One Bedroom Condo

The only problem I can see with our property is that it’s not anymore quite as enticing to live

there as it used to be. Yes, it’s only about twenty minutes to the central business district, however, there are newer properties that have been built over the past five years that are closer and easier to get to.

Oh, and another thing I’ve noticed is that the condo facilities are also not as breathtaking as the properties that were built recently. There is a large pool, an indoor basketball court, a fitness center, a small children’s playground and a convenience store. Overall, I’d say it’s decent but it can’t compete with those condos that boast of Bali-like themes and amenities that look as if you’re living in a resort.

Finally, the last challenge that I am seeing when finding a tenant is that developers are now willing to go very low when it comes to making a downpayment on a condo. What this means is that it is now becoming easier for someone to buy their own property because the initial payment has become more affordable. The mortgage payments have also been adjusted to grow with the buyer’s annual income.  It’s hard to compete with that. If you can afford to buy your own place, why rent at all?

The Marketing Plan: Clean But Efficient Finish and  Rent it Out For Cheap

To get people to sign the rent agreement I have to make the unit as pretty as possible without having to spend more money than is necessary. Therefore I am thinking of an Ikea-powered finish. I like Ikea. Their products that are not ugly and doesn’t cost much.

As for the other marketing strategy, I know I could have been a little more imaginative but I am in a hurry. I want to start making money from the property right away and I want to be able to keep the tenant for as long as I can. The mortgage on the property is a cost I have absorbed and since it is ending this year I don’t have to worry about having to cover the cost with the rent. The tenant I am looking for is someone who still isn’t comfortable with committing to a mortgage (which is a huge responsibility) but willing to spend just enough to afford renting a place close to work.

Anything I get from the property now will go into my income statement as profit which I can use to help pay the mortgage on future rental properties. The properties I am looking at are all under construction so the rental income I get will be used to cover the cost of the mortgage until the properties are finished. Once they are all ready to lease, I can use the extra money to pay off the monthly payments on future properties. Wash. Rinse. Repeat.

Sounds easy?

We’ll see.

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