Today, more and more people are flocking to the cities to be closer to school, work, or find opportunities. But as this population increases in the cities so also are the demand for affordable and decent dwelling places increasing. And this has led to the rapid proliferation of boarding house businesses across strategic places.
If you own a property close to areas such as schools and universities, public transport hubs, large construction sites, and high-density commercial districts, starting a house boarding will be a profitable business idea for you. This type of business does require much investment like a rental property. If you have been thinking of starting a house boarding business, here are some tips to help you.
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Why a House Boarding Business Is a Profitable One to Consider
In case you are still wondering if this is the type of business you should consider, this will help you. Because of the high demand for residential units, you can be sure someone will always come around to ask for a room to rent. So you can’t be left stranded after building your boarding units.
This type of business will guarantee a steady and passive income from tenants working or studying around your location. You also don’t need huge money as initial investment and maintenance costs are also minimal.
Utility costs such as gas, electricity, and water will be paid for by the tenants so your only worry will be to renew your license and pay for property taxes.
How to Start a Boarding House Business
Let’s talk about “How to Start a Boarding House Business” in detail:
#1: Location is very important
Your location is very important to the success of your house boarding business. If you are just considering building your house boarding, consider choosing locations close to universities, shopping malls, or transport hubs. These kinds of areas are usually hotcakes because tenants are always ready to pay extra for the convenience they will enjoy.
Renting a unit in such an area means they will not have to spend extra money on public transport or deal with the daily headache associated with traffic congestion.
#2: Identify your target tenants
Before you start this type of nosiness, you need to know who your prospective tenants are. However, this will depend on your location again. If you build your house boarding around a school or university, your likely tenants are going to be students or teachers.
Your tenants may also include tourists, event delegates, white-collar workers, construction staff workers, supermarket sales staff, etc.
#3: Make required changes in house
If you already have the building and looking to use it for your business, you might need to make some changes. For instance, if you have a dormitory kind of plan, you will need to plan access from outside and also to toilets and bath.
However, if you are just planning the building, try to include features like bathrooms, bedrooms, kitchen, and common area. You will also need to provide each tenant with the required furniture like a bed, cupboard, study table, and open shelf.
#4: Plan for common facilities
The facilities and amenities you provide are definitely going to depend on the financial power of your target tenants. That means you will need to conduct quality research on who your likely tenants are going to beforehand.
#5: Obtain necessary licenses and permits
As you run your boarding house business, you need to be sure you are on the right side of the law. So, check to know if there are any registration or linens is required to conduct such a business in your area.
#6: Keep a complete profile of all tenants
To make sure you run this business successfully, you need to ensure you have all the details of all your occupants for traceability. Anything can happen in the future and you may need to trace any of your occupants. So know their full names, address, and request references. Also, you can request copies of their driver’s license, SS card, or Xerox passport.
#7: Make your residents sign a contract
You need to foresee all possible situations and protect yourself by making them sign a contract before moving in with you. State codes that allowing:
- They won’t sue you in case they got bitten by your dogs
- They will pay 2 months in advance
- No accommodating opposite sex at night
- Require tags on cars
- No truck parking overnight
Make sure your new tenants read and understand all these registration rules before they sign.
#8: Use the scary bogus letter to evict non-payers
On-time rental payment is not only important to help sustain profits but also important to cover some expenses like maintenance costs and property tax and license renewal. So, if any of your occupants are defaulting on the agreement of making rental payments on time, get a letter from your lawyer to evict him or her.
#9: Complement your boarding house with other businesses
It will be a good idea if you can consider complementing your boarding house business with other businesses that your tenants could patronize. Some of such businesses are laundry and dry cleaning. Cafeteria business, butcher shop, and sari-sari business that helps cater to needs such as Internet café and school supplies.
You may also be interested in other business ideas: