Bangalore, the IT hub of India has recently been nominated as the second most livable city in India by the leading business publication Mint. The city has become a preferred destination for various reasons, i.e. exciting opportunities for college students and IT professionals, pleasant weather for tourists, and a cosmopolitan culture for young entrepreneurs to launch the next big thing!
No wonder, why the top Indian startups stemmed from Bangalore; because it’s one of the best cities in India to live and work!
If you have an entrepreneurial drive and you live in Bengaluru, the city has tons of opportunities for you to grow. Property rental is one such profitable venture that doesn’t require a huge investment and can be quite successful in short time with little hard work and more smart work.
If you already own a property, you are already set to start your own rental business with almost no cost, however, if you do not own a property, you can still start up by renting a place.
This article will guide you through the process of setting up a small scale property rental business whereby you can start your own paying guest, lodging or boarding service in Bengaluru, legally and profitably.
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Step 1: The Market Research
The real estate market in India is quite dynamic, and so it is in Banglore!
You can find a significant shift in short term, so, the strategic move is to conduct proper market research before starting up. For instance, check the property websites for PG in Bangalore, and see what people are offering, compare the prices, localities and facilities.
This will give you a fair idea of what should you offer, and whether you can turn a small part or whole of your house into the business. If you already have a property, you have a limited choice, but in case, if you have not rented one yet, you can consider having one in the best locality, where profit margins are higher.
Moreover, check for the holiday rental websites to know if you can convert some rooms into B&B as well. Know the difference between long term and short term tenants and how will you adjust the pricing accordingly.
Step 2: Fulfil the Legal Requirements
Well, this was not a high priority and could have easily passed off earlier, but with the new legal updates and strict state policies, even small scale rental businesses must have to undergo the proper licensing and registration procedures.
The cost of trade license is not much and starts from Rs. 3000, however, you do need appropriate documentation. The online BBMP Trade License Service is great help in saving your time and money. Moreover, your business must also comply with the GST requirements, and you should know how to file GST return .
Though the procedures are very straight forward, if you are not sure about certain things, you should ideally get help from a business setup lawyer/advisor.
Step 3: Get the Business Plan Ready
A business plan is the roadmap to the success for any business, so, you should have it too, even if you are planning to convert a couple of rooms from your house into commercial setup.
Ideally, the business plan should contain the following:
- Type of rental business, you plan to proceed with, i.e. serviced PG rooms or without service, hostel, B&B, vacation rental, etc.
- Expected rental revenues per person or per room/per month.
- Amount of money needed to fix the property and make it rentable.
- Amount of money needed to advertise your property.
- List of places/online portals where you will be advertising.
- Profit forecast; consider rental revenues, overhead costs, business setup costs etc. and figure out how much the business should make in next 6 or 12 months.
- What tasks you will be doing yourself, and what will you outsource. In case of outsourcing who will you hire and so on.
- Have a deadline for each task
This simple list should help you to create an actionable business plan, and the next steps should be fairly easier.
Step 4: Get Started
Based on the actionable items from your business plan, start taking the necessary steps to get the things done, i.e. fix and renovate the property by XX date, publish ads by XX dates.
Step 5: Evaluate & Fix Your Business Plan
Even for the experienced entrepreneurs who have succeeded in multiple ventures, it is not possible to have a perfect business plan right in the beginning, and so is the case for a new entrepreneur. It’s not a big issue that you couldn’t develop a good business plan in the beginning, but you must not miss the opportunity to fix it later.
Keep evaluating your business performance and alter the strategies accordingly.
The Bottom Line:
Bangalore is the city of opportunities and the opportunities are unlimited; all you need is to have passion and skills. If you have both, the low levels of caste segregation, vibrant dineout locations, high greenery, and the cleaner air are some of the ad-ons that will enhance your accommodation rental business in the city!