Starting a rental property business can be a very lucrative endeavor. However, it’s also not the easiest business to get into. For one, acquiring property requires a lot of capital. Getting a bank loan to purchase property may also prove a little tricky especially if you’re just starting out. Moreover, finding trustworthy tenants who will take good care of your unit/s and pay their rent on time is yet another challenging step.
Given all these perplexing concerns, how do you start the journey to becoming a great landlord? Fear not, since others have been in your shoes before. Below, we’ll look at advice from experts in the field on the fundamentals of starting a rental property business – from financing to acquisition, to management.
Leverage Existing Property for Financing
For those who are looking for real estate to invest in, it would be advisable to leverage your existing home first. Small Business suggests two ways of doing this: either through using the equity in your home as down payment for buying a new property, or through renting out your current home while you move into a new one.
However, if you plan on staying in your home but need capital, you can also apply for a home equity loan or an investment property loan. Keep in mind however that if you have zero rental experience, banks may give you unfavorable options on investment loans. Moreover, if you are in the process of growing your rental property business, Fast Small Business Loans from alternative lenders could work for you, especially if you’ve been operating for more than six months and the business is in good standing.
Invest In Condos, Not Co-ops
Once you’ve secured financing, the next step is knowing what type of property to invest in. Understanding your own current business goals will help you in this decision. For example, Yoreevo details how investing in condos instead of co-ops in New York City could be a better way to go if your goal is to actually grow your money. This is due to the restrictions attached to NYC co-ops, which usually come with limitations about how often you can sublet a unit. You’re usually not allowed to sublet a co-op for the first two years of occupancy, and they’ll only allow you to rent it out for two out of five years. Condominiums, on the other hand, are much easier to purchase as well as renovate according to your target market’s wants and needs. Moreover, your buyer pool will expand since foreigners are restricted to renting condominiums.
Find Good Tenants
Military.com shares some tips from real estate experts on the best ways to find the best tenants for your property. Among all the tips, knowing where to advertise is key. Avoid posting on sites like Craigslist since these have been notorious for scammers who change the contact info on rental listings and then take the down payment of potential tenants. For more trustworthy advertising, you can begin by getting referrals from families and friends. Start with broadcasting your ad on your own social networking sites and approaching local businesses in your community. Make use of flyers and newspaper listings.
Get Help in Managing Finances
Once your property leasing business grows and all your properties have tenants, it’s important to manage your finances wisely. The Balance recommends that people who own rental properties should get an accountant, explaining that “owning a rental property is essentially like owning your own business, so hiring an accountant is likely necessary for this situation.” Getting an accountant will not only help you stay on top of your books, they will also give you advice when it comes to paying taxes. This could save you a ton of money that you can eventually use to invest in more property in the future.
We put together the top home based businesses for 2019
Starting a home-based business might seem too good to be true. (Especially if you’re used to working in the corporate sector.)
However, the opportunity to make a healthy living online while working from home is as real as ever.
If you have an internet connection, you already have the only essential tool you need to get started.
Many of the most prominent home-based business ideas require a certain skill set. However, that skill set can be developed over time while you build your business.
Plus, freelance websites like Freelancer.com and UpWork.com make getting started a smooth and easy process.
With the introduction of fin-tech, traditionally non-bankable businesses such as the ones we discussed below or now able to obtain working capital through our Home based business loans programs.
And other business ideas require no previous skill set at all, making them the perfect place to get started.
Below, we’ve put together a list of the best home-based business ideas for 2019.
No matter what your previous profession, skill set, or schedule, there’s something for you.
Top 11 home-based business ideas
1. Blogging
Blogging is one of a few business ideas on this list that makes use of the explosion in demand for information that coincided with the Internet’s birth.
As a blogger, you can take something you’re already an expert at and build a platform around that expertise.
By writing in-depth blog guides, tips articles, and how-tos around a topic, you can build an audience of devoted followers who you then offer digital products such as eBooks and online courses.
If you love to write or are interested in the idea of putting together articles around a particular topic you love, blogging may be the ideal home-based business for you.
2. Social media management
Every company, from big-name brand to that little restaurant around the corner you love to visit on Friday nights, uses social media in some way.
As a social media manager, you can start as a freelancer with multiple clients, helping them get their business noticed using the latest digital marketing strategies, while building your business into a full-fledged agency– all from home.
And with the explosion in value of social media paid advertising over the past half-decade, brands and small companies alike now invest considerable sums into advertising on platforms such as Facebook, YouTube, and Instagram.
If you’re already obsessed with social media and know how to easily navigate around the major platforms, social media management is a home-based business worth looking into.
3. Consulting
Similarly to the explosion in demand for information that the digital age brought about, many are also now searching out experts online to help them learn and grow, whether it be themselves in some way or their business.
As a consultant, you can offer your knowledge in an advisory capacity, creating plans and even helping implement them.
Popular spaces where consultants are sought-after include digital marketing, business, fitness, health (general), and professional and personal performance.
4. Graphic design
Do you have graphic design experience? Were you that person everyone asked for help on small design projects at your last job? Do you love to draw or make any kind of art?
If you answered yes to any of these questions, you might have found your home-based business idea and starting a graphic design business might be right for you.
As a graphic designer, you get to flex your creative muscles for a living. You can create attractive social media artwork, blog images, PDF designs, or any other countless digital visual assets.
5. Programming
Programming is harder to get into than writing or graphic design. However, it’s easier than ever to start learning.
It’s also an incredibly valuable skill that is only becoming more valuable. And any business based around programming (software-as-a-service or an app) can be highly lucrative.
The great part about programming is you can start with something simpler like website design and still make a great living. Then you can work your way up to creating your own software offering as you learn and improve your skills.
Plus, as mentioned, the value of programming knowledge and skill is only becoming more valuable over time– and fast.
6. Virtual assistance
Being a virtual assistant is a super easy freelance gig to start off with.
As a virtual assistant, you’ll do a variety of tasks for entrepreneurs and business execs. Tasks such as answer emails, create spreadsheets, manage appointments, edit, and even organize events.
This variety of tasks doesn’t just help keep things interesting, however. It can also serve as a valuable springboard for learning what it takes to run a large business as you grow and expand.
If you’re known for being incredibly organized and tend to be the one that your group of friends defaults to when planning an event or working on a project, this could be the perfect fit for you.
7. Professional crafting
In the past, blacksmiths, seamstress, and woodworkers were incredibly important parts of modern society.
However, over time, technological advancements during the Industrial Revolution all but phased them out of necessity.
But the Internet has breathed new life into crafters everywhere, with everyone from metal workers to jewelry makers now having the perfect combination of tools available to them to start a home-based business doing what they love.
Sites like Etsy and to a lesser extend Kickstarter have literally made countless full-time crafters, from custom woodworking and jewelry to clothing and everything in between.
And social media, especially Pinterest, serve as the ideal marketing platforms to build a craft-centered business around given its emphasis on imagery.
If you love any kind of crafting, now is an amazing time to be alive if you’re willing to get your hands dirty and build a business online.
8. Online courses
Similar to blogging and other online business ideas, the online course industry is an incredible opportunity to take something you’re an expert in and design a business around offering that knowledge at a price.
By offering your expertise in the form of an online course, either through sites like Udemy or your own platform on something like Teachable, you can create an educational resource once that pays you continuously.
Plus, the price that online courses demand tends to be high, anywhere from a couple of bucks to even several thousand depending on the niche and perceived value of the material, so the profitability potential is high.
In fact, the online course industry is now worth nearly $30 billion. Talk about opportunity.
9. Data entry
Data entry is possibly the simplest and easiest business you can start online, though it’s not as lucrative.
Instead of working for one company, you can make use of your mad typing skills and one of several freelance sites to build up an entire client base whom you serve.
It might not be the most attractive of home-based business ideas, but it’s something that literally anyone can start right away and make a living.
10. YouTube
Being a YouTuber is similar to blogging but can be different.
As a YouTuber, you’ll create videos on a subject you love or are an expert on and entertain an audience, gathering subscribers, attracting sponsors, and upping your game over time.
And that’s the key word with YouTube: entertain. As opposed to something like blogging or consulting, YouTube is either 100% entertainment or 1-part education, 1-part entertainment (also called infotainment).
Either way, you need to know, or be willing to learn, how to entertain while you’re delivering either laughs or useful or interesting information.
If you’re naturally funny, love to entertain, are a videographer or have some video skills, or are an expert in a subject that naturally lends itself to video (such as cooking) and would love to teach that skill, YouTube could be the perfect platform to build your business around.
11. Online retailer
Becoming an online retailer and selling your own (or someone else’s) product online is one of the most straightforward home-based business ideas there is– and it has huge income potential.
Given its massive success and dominance over the online retail space, it’s no surprise that Amazon is one of the quintessential retail opportunities online.
Anyone can create an Amazon Seller account and begin either reselling name brand products or producing your own to sell on the behemoth shopping platform in little time (check out our guide on How to Sell on Amazon to learn how to get started on Amazon).
In exchange, you can gain great exposure, utilizing Amazon’s massive online traffic to immediately bring eyeballs to your products.
But Amazon isn’t the only opportunity. Many have used platforms like Shopify to start their own retails sites, driving traffic via SEO and social media.
Either way, an online retail store is perfectly suited for working from home.
What kind of home-based business will you start?
Chances are, one or a few of these home-based business ideas have peaked your interest.
The question is: which will it be?
Now more than ever before, starting a business from home that allows you to have full control over your schedule isn’t just a possibility, it’s simple and straightforward to get started.
As with any business, these ideas still take hard work to build. But if you’re interested in working from home, the trade-offs you receive in freedom and control (and, in many cases, income potential) could be well worth it.
What do your customers think about your business? What niche area have you carved out for yourself, and where do you stand in relation to the other options in your niche?
Your answers to these questions will depend on the business-level strategy that you have adopted. It sounds like a fancy phrase, but at some level, every business will make decisions on how to apply these strategies to their products or services and even financing.
Let’s think, for example, about the smartphone market. Apple is renowned for offering the most expensive devices of the highest possible quality, while manufacturers like OnePlus and Huawei produce devices that attempt to blend together price and functionality.
Each business is vying for a different part of the market to stand out from the competition and win their share of the profits. But how exactly do those businesses achieve this, and how can business-level strategies be better understood?
In this post, we will explore what business-level strategies are, the key strategies out there, and how they can be applied to your business.
What Are Business-Level Strategies?
Put simply, business-level strategies are actions that a business can take to provide value to their customers and gain a competitive advantage over their competitors.
Michael Porter is a professor at Harvard Business School, and he is widely regarded as a leading authority of matters of corporate strategy. In his work, Porter has outlined how there are three key types of business-level strategy that organizations can pursue.
These three strategies are defined as Focus, Differentiation, and Cost Leadership. Here is a closer look at each of those in turn to give you a more detailed idea of each.
Cost Leadership
This business-level strategy refers to those attempts made by businesses to cut costs and offer prices to customers that are below the industry average. Businesses can achieve this using a range of techniques, such as developing close ties with suppliers and developing new products.
By passing those savings along to their customers, those businesses are able to increase their profit margins and secure a unique position within the market. Think, for example, of those companies like OnePlus which offer prices far below those of competitors.
Differentiation
Some businesses aim to win market share and defend their higher prices by powering-up their offering with unique features that please their customers. Think of Apple, for example. It’s premium products come at premium prices, but it is consistently seen as offering the best possible features.
Focus
Many businesses try to beat larger competitors by offering an unparalleled level of focus when it comes to both Cost Leadership and Differentiation. Smaller businesses are often able to achieve levels of focus that cannot be matched by larger and more inflexible players.
Choosing Which Strategy Is Right For Your Business
Where does your business stand, and which business-level strategy should you adopt? This all depends on the research that you have conducted, what your customers value, and what your business is actually capable of.
You can explore these two areas in more detail by asking these two questions:
– What do your customers value the most? Cost savings, product quality, or brand prestige?
– Does your business have the resources and capacities to pursue the best cost/quality?
How To Apply Business-Level Strategies and Avoid Risk
Here’s a closer look at how you can work to apply each of those business-level strategies while avoiding the risks that are associated with each of them. Let’s begin with the cost leadership strategy.
Cost Leadership Strategy
In order to differentiate your business and make it a cost leader, you’ll need to do everything that you can to lower costs and keep them far below those of your competitors. Here are just some of the methods that your business can use to reduce costs:
– Build state-of-the-art manufacturing facilities which can help you to boost both efficiency and productivity.
– Maintain a very tight level of control over both product and overhead costs to push down prices and the cost of production.
– Minimize the cost of sales, research, and development as much as possible. Ensure that every department in your business operates in a lean manner.
Companies like OnePlus and Huawei are capable of offering very attractive prices thanks to an unwavering commitment to their cost leadership strategy. They achieve these low prices by sourcing their products from cheap competitors and limiting the amount of money that they spend on activities such as marketing and sales.
The manufacturing facilities are also located in places that make business cheaper, while their manufacturing processes have been built from the ground-up to reinvent the wheel and do things in new ways.
The big risk in terms of cost leadership is that your competitors will simply emulate your strategies and that your cost-saving techniques are not unique to your business. Circumstances can also change, too, meaning that your strategies may become more expensive over time.
Differentiation Strategy
The specific way that you differentiate your product or service will depend largely, of course, on the niche that you are operating within. You could make sure that your product or service is superior in terms of the features and functionality that it offers, as well as its durability, reliability, and support.
A strong differentiation strategy relies upon effective sales and marketing, and the ability to articulate and evidence the value of your product or service. You will, of course, have to conduct sophisticated and extensive competitor research and understand the landscape that you are operating within.
Let’s think about Apple. The company does a wonderful job of articulating its many strengths and building hype around its products. The average consumer perceives Apple products to be of a much higher value when compared to its competitors. Amazing marketing and advertising helps in this area.
There are risks with differentiation too, though. You may find that once your product or service has been released, your competitors will be quick to follow and you will lose any qualities that made you different in the past.
To avoid this risk, it’s important that businesses maintain an agile approach to product and service development. This will ensure that the business stays on top and constantly ahead of its various competitors that exist within the market.
Focus Strategy
Does it make sense for your business to target a particular market? If you are able to get a sophisticated and unparalleled understanding of a market and its dynamics, you will find that you have a strong advantage when compared to your competitors.
Applying this strategy relies upon following the techniques that were outlined above, but applying them to a very narrow portion of the market. Your marketing and sales strategies must also be absolutely stellar, or you may find that you fail to identify and engage with your target audience effectively.
Think about Otterbox, for example. This company works to offer premium smartphone cases to its customers and specializes in this very distinct area. The company has never strayed from this specific area and it constantly maintains a very high level of focus on improving its offering. A lot of companies looking to pursue this business-level strategy can learn a great deal from this example.
As ever, there are some dangers and risks when using this business-level strategy. You may find that your competitors focus even more intensely upon a smaller division of your market and cannibalize your customers. You may also find that a shift within your industry means that bigger players may choose to enter your niche.
Let’s imagine, for example, that you are a company that offers a very specific SaaS service. You may find that over time, larger-scale competitors enter your niche and begin to offer a competing service.
Choosing the Correct Strategy
You may find that your business-level strategy is one of the first decisions that you make as a business. In fact, you will often find that your business idea spawns from you identifying a space within the market.
It’s important that you get this decision right. You should think about it from every possible perspective and dedicate a lot of time to thinking about it. You should also try and discuss this idea with your colleagues and other industry insiders to determine its viability.
You may also find that it makes a lot of sense to pursue a hybrid strategy. This can broaden the appeal of your product and/or service to boost your profits and help you capture as much growth as possible. Many businesses attempt this. Think, for example, about supermarket chains which offer premium products in addition to own-brand offerings.
Think Carefully
We hope that this post has helped you to think about business-level strategies in a new way. Essentially, it’s all a matter of deep thought and keen research. Once you discover your target market and what their needs are, you will be able to develop a keen business-level strategy that helps you to succeed.
