One question that seems to be popping up more and more frequently among online entrepreneurs is how to make money renting houses online. And it’s a good question because in today’s economic climate rental housing is big business. More and more people of all age groups are choosing to rent instead of investing their life savings in a home only to have it sink under water a couple of years down the road.
But renting a home isn’t like selling someone a book or a pair of designer sunglasses. Those are impulse purchases and all you really have to do is design a catchy website with a big, easy-to-spot Buy It Now button. When someone rents a house though, you’re talking about a major investment and lots of lifestyle considerations. You need to show them much more than a picture of the house and a price tag. Here are some tips to help you make money renting houses online.
What you need to provide to attract tenants:
Optimize your site for the search engines: Most people looking to rent houses online will have a specific city in mind. Make sure you use the name of the city as one of your keywords, mentioning it several times in each individual listing. Also be sure to register your site with Google Maps so it appears in local business searches.
Use plenty of pictures: This is one area where a lot of rental sites drop the ball. Most just show a picture of the outside of the building and then a diagram of the interior. People want to see what the inside really looks like and a blueprint doesn’t really give you a clear picture. Either take the pictures yourself or have the property owner take them and send them to you so you can include them on your site.
Include plenty of information about the area: Renters want to know things like:
- How close is the house to a major freeway?
- What schools are in the area?
- What shopping is nearby?
- Are there any parks in the neighborhood?
- How close to business districts?
- What type of entertainment is available?
The more information you can include about the area, the better. Describe the geography – are there lots of trees in the area? Is it a peaceful location or one that would appeal to on-the-go types. This type of information is especially important to people looking for vacation homes to rent.
Include an online rental application: Make it easy on yourself and your potential new tenant by including an online rental application that they can submit via the Internet or print out and fax back to you.
Provide contact information: No matter how much information you include on your site, someone is always going to have questions. Make sure you provide clear, easy-to-spot contact information. And use a real telephone number and a real email address that you check frequently.
What you need to provide to the homeowners:
In the end, the money you make online renting houses will actually be coming from the person who owns the house. You’re providing the homeowner a service by listing their house on your website and performing all the marketing required to promote that site and find new tenants. Renting a house, in most states, involves signing some type of legal contract and that rental agreement should be left up to the homeowner and the new tenant.
However, you are providing a substantial service and it’s important that you charge accordingly. The first thing you need to do is decide just exactly what services you’re going to offer.
- Who will take pictures of the property?
- Who will take the phone calls and answer the questions?
- Who will show the property to potential tenants?
- Who will run security checks on potential tenants?
- Who will type up the listing?
- Who will provide the information about the area?
Next, you need to think about how you plan to scale your business. In the beginning you may want to handle each tenant and homeowner yourself, handling all of the listing duties and dealing with potential tenants one-on-one and, in your spare time, you’ll do the marketing necessary to promote the site.
But, as your business grows, you might want to automate that part of the business and concentrate more on strictly promoting your site. You could set up one portion of your website for the tenant’s benefit, including their application, and the other side for the homeowner, including a form they can submit with pictures and all the pertinent property information.
As your business grows even larger you might even consider letting the homeowner have complete access and control over his own listing and then all you’ll have to do is collect a monthly listing fee and promote your site.
The main thing you need to consider is the amount of time you’re going to invest – not necessarily the duties you’ll perform. Because, when it comes right down to it, Time Equals Money. And so many marketers forget that one little important equation.
Make the homeowners pay for the site and your service
Whether you’re spending 8 hours a day talking to homeowners and potential tenants, taking pictures and typing up listings, or 8 hours a day promoting the site – you’re still spending 8 hours a day and you need to be compensated for that time. You’re also paying web hosting fees, and maybe a web designer, too.
Just like any other business, calculate your expenses and determine the hourly rate you need to make a profit and then charge your clients – the homeowners – accordingly. Charge them a set fee, when the listing is placed.
Should you offer a guarantee?
In most cases offering a guarantee is good for business. But in this case, you have too little control. The housing market is terrible right now, whether buying or renting. The owner may be asking too much for rent. The place might really be a dump. Who knows? Newspapers don’t offer a guarantee when property owners list their house for rent and you shouldn’t either. Most homeowners understand this and probably won’t even ask.
Know what’s legal in your area
It’s easy enough to make money renting houses online. But remember, there are laws that protect the homeowner and the tenant and all you are is the go-between. The only contract you should have is a contract between yourself and the homeowner that stipulates what services you will provide with your website and how much and when he needs to pay. The actual rental agreement for the property is between the homeowner and the tenant. Do not place yourself in the middle of any type of rental agreement or you might end up paying someone’s rent for a year.