Starting an Apartment Rental Business

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Renting an apartment or a house is one of the profitable businesses these days; apartment and house owners are looking for real estate agents who can manage their property for them. You can start making money by renting your own or managing others houses and apartments.

The foundations of an apartment rental business may come about in 2 forms. One: a building is refitted to become separate apartments for rent. Two: an apartment building is raised on an empty block of land.

apartment renting

Obviously, if you compare the 2 forms of apartment foundations, the former one is a lot cheaper than the latter; although there are still considerable expenses to take care of for both.

An apartment’s or apartment building’s value is not only dictated by its architectural constitution, but also by its surroundings. Location is a meaningful variable when setting up an apartment rental business. Undoubtedly, a new building fitted with chrome and steel interiors, solar washed windows and all the high tech amenities may be an enticing piece of real estate. But, if it is situated far from schools or churches or business establishments, it might not sell as much as you’d like. If the train passes by your tenants’ windows every 15 minutes, or if the apartment building overlooks a sea of blaring, honking traffic 24 hours a day, you also might not have any takers. The neighborhood is also a factor. Everybody wants to live someplace safe; if your neighborhood is reputed to be quiet and secure, you may have tenants soon. Otherwise, your business may be in trouble.

For small apartment buildings, residences may be secured by such devices as personalized cardkeys, intercom systems with buzz door, intercom system with remote opening device, etc. For bigger apartment buildings however, security is a major enticement for prospective clients, and some employ the aid of night watch, front desk help and front door personnel.

Although a heterogeneous market is good, some businesses cater to a specific group of people, ensuring harmony in the building. In Florida, for example, some apartment buildings cater only to retired couples and the elderly. In other states, apartment buildings are reserved only for student residency. In more elaborate settings, “luxury” apartments (definitely for those with thick wallets,) cater only to a select few, and may be rented out on a per-day basis: an alternative place for those who do not wish to stay at nearby hotels.

Of course, for many potential tenants, the main issue of finding an apartment (besides availability and location) is the rent. Competitively pricing the apartments is a great selling point, but since this is a business venture, there must be some income raking in.

According to one study, small apartment rental business ventures may have (on an average scale) a start-up cost of $100, and a daily operating cost of $5 a day. Rent depends upon many factors like location, dimension (size,) and amenities available. More affluent apartment rental set-ups definitely charge more, but their 2 main priorities are security and the good name of the business.

For small apartment rental business ventures, rent is given to apartment managers or landlords / landladies (and most of them have this notorious, sometimes undeserved reputation for squeezing out rent money.) In other cases, rent is through bank transfer or credit card payments. In any case, if you are trying to set up such a business, make a payment scheme that will best suit your needs and be of some convenience to your prospective tenants; all the while, it should be paying for more than just the most basic of utilities.

46 Comments

  • 1. Adam said on March 17, 2009
    that was very good information... any more ideas would be really awesome.
  • 2. Janice Ballard said on April 14, 2009
    I am interested in knowing what are the requirements for "starting an apartment or home rental/lease locater business. "How to get started", etc.
  • 3. lovely said on June 12, 2009
    i am interested to build an apartment but i don't know the startup cost if we start making a business like apartment. please tell me how to get started about this.. because we want to know thank you.
  • 4. Eunice said on July 23, 2009
    I am also interested in starting a business in renting. How & where do I start? My interest is in the Townships. Thank you
  • 5. Karey Wright said on April 19, 2010
    Hi my husband and I would love to start our own apartment rental business. We are in New Bern, NC and don't know where to get started but we want to very soon. Any advice to help further us along would be appreciated. Thank you.
  • 6. Souliya sydavong said on May 9, 2011
    How to chose the location to start an apartment business? for ex: in laos where is the best location?
  • 7. Madison Group Apartments said on July 9, 2011
    It think that having a target market niche is better. This would be harmonious in terms of amenities they will put in the apartment. Like young professionals would be more keen on having modern and high technology in their apartments while senior families would be looking for more kid-friendly amenities.
  • 8. Sukhjinder said on August 16, 2011
    Hi! This is nice information. I want to start my business. Would you guide me. Which is better option make apartments and rent them or buy old one renovate and rent them or take contract for maintenance and rent them and collect rent. Please guide me how to start. Thank you
  • 9. dark angel said on August 26, 2011
    Hi, I would like to start my own apartment rental business. I am fr. Tetuan,Zamboanga City Philippines,& don't know how to get started.my plan is to buy a house & lot then turn it into a apartment.Pls. tell me how do i get started about this...thank you
  • 10. LEBO said on October 6, 2011
    H'i i'm LEBO from PRETORIA'ATTERRIDGEVILLE, i want to start a rental apartment business, i don't know how to start and i want to find a space for my business around GAUTENG, help me please...
  • 11. marnie said on January 5, 2012
    Hi! great information! i'm planning to have an apartment rental business. I dont know how to start this kind of business. Can you give me more ideas? How much the capital to spend? Which is good buy a lot or renting lot? thank u
  • 12. Mike said on January 13, 2012
    I'm also interested to start a apartment rental business in davao and calamba city philippines. Can you please give me an idea how much capital to spend and where I can buy a lot with low price.
  • 13. TP said on January 23, 2012
    I would like to built an apartment for renting, can you help with how to go about it and proposals as well?
  • 14. Siyabusa Nyuswa said on March 23, 2012
    I have two very lucritive lands based in durban. One in Clemont, where everyone is always seeking for a room to rent. and the other one in Mophela close to pietermaritzburg. I have a very big project in mind for the land in Clemont, I just need an investor who can place it on motion. after the project is terminated, a gauranteed R60.000.00 of rent will be obtainable every month. The other land in Mophela is too big, approximately 12 acres. i am still scratching my head pins on what i am going to do with it. selling these lands is not an option. anyone willing to invest, have an idea on the 12 acres land please contact Siya at this number 079 450 6535.
  • 15. siraj said on April 10, 2012
    We are 10 friends trying to build own apartment home in one building therefore looking to make a Constitution for the planning, money collection account, making a building & ownership kindly help us in this matter.
  • 16. vanessa ramjee said on April 11, 2012
    I am and always have been interested in the property business but was in a career comfort zone until recently. I am now ready to pursue this field and am interested in hearing your reply to each of the questions above particularly the ones on how to get started with rentals and also getting investors if one does not have start up capital.
  • 17. stan said on April 20, 2012
    I am interested in property rental business but do not have a startup capital. i have a bond in a suburb and need advice on proposals to financial institutions to access funding. how do i get started, what are the challenges and how do i overcome those challenges. i need to invest in apartments in town, townhouses in surburbs and surrounding townships '4-roomed' houses. i live in halfway house gauteng
  • 18. Vanessa N said on May 2, 2012
    i dont have a business location yet i'm in south africa, mpumalanga and i would like to know how does one start a business like a complex for accommodation rentals, i'm talking about those that are based in town and may be three floors and parking lot, where new families or bachelors can rent bachelor pads and so on. I am so passionate with this and i can say it is my passion driven kind of business. My other question is, how much does one need to start the business and if i were to make a loan how much would it be?
  • 19. Yuni beginner adviser said on May 12, 2012
    @Mike, I can help you to find good price lands in Davao since I knew some of city Concelo and the vice Mayor there. This can help you to process easier the permit & etc. Regarding the budget you should need is depend to the location, size & type construction that you want. I can help you for the Hotel concept and help your dealing. My email: w.wahyuni83@yahoo.com

    w.wahyuni83@yahoo.com || +63 9477 829 585 || Spa Resort/Hotel Consultant

  • 20. Nomphelo said on October 9, 2012
    i would like to rent out my house for a start, then i want to extend my house and build flats at the back for rental. and probably move and stay else where so i can start making money out of this renting business because what i earn is not really helping me to meet my needs and payoff my debts. please help me to start off this business..
  • 21. Mark Deshotel said on January 30, 2013
    Lake Charles , Louisiana. I would like u to call me , I have 20 acres payed off and want to start building Apartments. Would love to ask a few ? 337.884,6881
  • 22. meshack ondieki said on February 4, 2013
    i am located in Ngong town near kibiko secondary school
  • 23. Pascalinah said on February 12, 2013
    I am in mpumalanga Hazyview looking for a place to build rooms
  • 24. Mariese said on March 8, 2013
    Hi, i am planning to renovate my mothers old house and put up a room for rent business. The lot is 200sq.meters and has a comfort room and bathroom. I would like to maximize the space of the floor area which is more or less 150 sq. meters. It has a second floor with one small stairs. I hope that u can help me with the costing budget and number of rooms upstairs and downstairs . The rest of open space around the 2 sides of the house could be used to have rooms and additional bathroom and toilet.
  • 25. makgatho said on March 22, 2013
    i have a land and i would like to build renal apartments, this will be my future business. what are the things to consider/ or any tips including the financial implications
  • 26. Bill Henderson said on April 7, 2013
    I am moving to Cebu, Philippines and am considering building from ground up 4 unit Duplexes in that area, I have managed 25 houses in the US at one time but know nothing about the economy or things to look out for in the Philippines. any advice will be appreciated.
  • 27. Lesego Mokgotsana said on April 8, 2013
    Please help me with ideas on how to start apartment rental in township. There is several places that i have spotted to start building small apartments. I see this as a big opportunity for me grow as business woman. Your assistance will be highly appreciated.
  • 28. delfin said on April 28, 2013
    we have a house here in baguio and we currently upgraded our basement into a pad that we wanted to rent out, how can we start renting it out and what are the proper steps to take to make it legal.
  • 29. nicholas said on May 30, 2013
    in real passion to property rental business, planning to open my own soon, but having no much information about how and where do i start.... if anyone interested can give advice
  • 30. Ellmine said on June 10, 2013
    I'm very passionate about building town house and buying houses and turn them into apartments or rooms, can you please advice me on what to do if I dont have capital at all. where do I start. my location is Northern Cape, kimberley. THANK YOU
  • 31. Manuel Creencia said on June 28, 2013
    I have a 240 sq. m. residential lot in Tagaytay and I want to start small apartments business. Want to know how much will it cost for one door apartment if I will consider only the minimum floor area and least finish requirements.
  • 32. Mutamba S said on July 1, 2013
    looking for somebody or a firm to manage apartments in Kampala, namugongo, entebbe, ntinda and luzira. Also an agent to pursue for a land title urgently. Thax
  • 33. Precious said on August 20, 2013
    I am 21 and would like to have my own rental business.. So far i have 100 000 rands as my starter, i don't have a place yet. I'm not even sure how much it will cost me to buy a land but i really want to have my own apartment.. I need you to help me with every information that i will need and all implications that can help me.. My vision is to build rooms in a place that is surrounded with mines and people from outside, as i know many are away from home and they looking for places.
  • 34. ben said on October 21, 2013
    hi @precious contact me on my email....sedibetaedi@yahoo.co.za
  • 35. ida labro said on October 29, 2013
    i like to build a 4 doors apartment in my province borongan eastern samar philippines; please tell me how much it will cost now a day; and its my pleasure if you will help me with this thank you so much and god bless;
  • 36. Sharon Mcmillon said on December 1, 2013
    I have 4 acres of land ,want to build small apt complex how do I get started on financial budget plan .I have written a business outline already. Please advise on how I may apply for grants .
  • 37. Judith Mwamba said on December 17, 2013
    I have some money to buy the plot the thing is that I'm planning to build apartments in CONGO, KINSHASA but I dont have any clue on how to start please help me .
  • 38. lucas d Skhosana said on January 10, 2014
    I have got a plot of x-4hact at charl cilliers ,secunda . i want to build old age home, with written business plan already. Who want to invest? Cell:0761988428 .
  • 39. sthembiso said on February 27, 2014
    hai i'm sthembiso i wish to start my own renting house bt i dnt knw where to start bt i hv a lot of idea about this business the prblem is one things is the start as i said i need a huge place so that i can build my own rental house any one who can help me call me at 0745435123 or email at www.sthembisotuks351@gmail.com im also pmb plz guyz i need your help
  • 40. sthembiso said on February 27, 2014
    i wish to build a double storied house that have at least 20 room plzzzzz guyz help me any where guys
  • 41. Momo said on March 15, 2014
    How do I start an apartment renter business. I'm looking into building one. What are the requirement please? Your advice will be greatly appreciated. Thanks
  • 42. Elsa said on March 30, 2014
    I find the above article very helpful. I am at this point within a year of building an apartment complex on a 10 acre land in a small town in South Texas where apartments are very old and few. My husband has currently an 8-door apartment building in a separate land which he owns completely and been in business for 10 years. He finds the business very profitable. Hence, we have decided to build more apartments. The land we are planning to build on is already paid off about 70% at this point. We are in the initial planning stages of our business expansion and we want to know how we could maximize our chances of getting qualified for SBA and get the loan amount we need for a 12 door apartment
  • 43. Marqul said on April 10, 2014
    I am from Dillon sc I am interested I am starting a 8-12 unit apartment duplex what is the best way to come about this when I do know the cost or how I will get help or grants funding it.
  • 44. lutendo mudau said on May 20, 2014
    i am interested in starting an accommodation business which is targeting student or tertiary student around Gauteng province in south africa. And would like to know how to start such a business, where to go and what is needed. thank you
  • 45. Phillip Tshabalala said on June 3, 2014
    Hi. I have space to build 15 to 18 rooms, but problem is the starting capital. The shop is just across the road. Public transport is just around the corner (± 200 m) and the school is about ± 600m/800m. If it is there any help or advices you are welcome. From Bloemontein Free State South Africa.
  • 46. Solly said on June 16, 2014
    I'm interested to start apartment business. My township doesnt have one and many people from outside who work in the area struggle. Please give me a tips on how to write a convincing business plan in order to get funds to start. Also I wanna know the advantages and disadvantages in this business and a sample of financial plan for the business.
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