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Rental Properties Business Plan Template 2021 Updated

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Rental Properties Business Plan Template

If you want to start a Rental Property business or expand your current Rental Property business, you need a business plan.

The following Rental Properties business plan template gives you the key elements to include in a winning Rental Properties business plan.


I. Executive Summary

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

Business Overview

[Company Name] is a rental property agency in [location name] that specializes in managing, renting and leasing properties. [Company Name] rents homes in dozens of markets across the country and has an online platform that allows customers to search by their specific criteria (number of bedrooms, region, amenities, etc.) to find a property that’s right for them in their preferred location.

Products Served/Service offering

The Company offers a variety of rental properties, listed below:

  • 1-3 bedroom apartments
  • Single family homes
  • Multi-unit buildings
  • Short-term rentals
  • Rental of mobile homes or trailers

Customer Focus

[Company Name] will primarily provide its offerings to local renters, students and local professionals. The demographics of the customers are given as below:

  • First time renters-29%
  • Young adults-21%
  • Perma – renters-16%
  • Middle income boomers-11%
  • Families-14%

Management Team

[Company Name] is led by [Founder’s name], who has been in the rental property industry for [x] years. During his extensive experience in the rental property industry, he [founder] acquired an in-depth knowledge of the local area, local regulations, facilities, and the characteristics of different neighborhoods. He also holds rich experience in handling business management activities (i.e., staffing, marketing, etc.).

Success Factors

[Company Name] is qualified to succeed due to the following reasons:

  • There is currently a high demand for rental property services in the community. In addition, the company surveyed the local population and received highly positive feedback pointing towards an explicit demand for the products, supporting the business after launch.
  • The Company’s online marketplace offers a high-volume traffic area and will thus be highly convenient to a significant number of residents living anywhere.
  • The management team has a track record of success in the rental property business.
  • The rental property business has proven to be a successful industry in the United States.
  • Financial Highlights

    [Company Name] is currently seeking $370,000 to launch its rental property business. Specifically, these funds will be used as follows:

    • Website design/build and startup business expenses: $120,000
    • Working capital: $250,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

    The following graph outlines the pro forma financial projections for [Company Name] over the next five years:

    Financial SummaryYear 1Year 2Year 3Year 4Year 5
    Revenue$965,742 $1,878,611 $2,718,300 $3,477,900 $4,285,228
    Total Expenses$390,241 $630,018 $931,935 $1,171,906 $1,429,992
    EBITDA$575,501 $1,248,593 $1,786,365 $2,305,994 $2,855,237
    Depreciation$8,720 $8,720 $8,720 $8,720 $8,720
    EBIT$566,781 $1,239,873 $1,777,645 $2,297,274 $2,846,517
    Interest$5,077 $4,442 $3,807 $3,173 $2,538
    PreTax Income$561,705 $1,235,431 $1,773,838 $2,294,101 $2,843,978
    Income Tax Expense$196,597 $432,401 $620,843 $802,935 $995,392
    Net Income$365,108 $803,030 $1,152,995 $1,491,166 $1,848,586
    Net Profit Margin38%43%42%43%43%


    II. Company Overview

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Who is [Company Name]?

    [Company Name], located in [insert location here], is a rental property agency focusing on providing short-term and long-term rentals, as well as leased properties to the local community. [Company Name’s] rental properties have a clean and modern appearance that appeals to the current renter’s market. The [Company]’s properties will be fully furnished and include high-end technology and modern accessories.

    [Company Name] is owned by [Founder’s Name]. While [Founder’s Name] has been in the rental property industry for some time, it was in [month, date] that he decided to launch [Company Name]. He evaluates that the growing number of students, working professionals, and overseas relocations create a need and expects growth in the country’s rental property market.

    [Company Name]’s History

    Upon surveying the local customer base and finding the potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

    [Founder’s Name] has selected an initial office location and is currently undergoing due diligence on each property and the local market to assess the most desirable location for additional offices.

    [Company’s Name] operations are currently being run out of [Founder’s Name] home office.

    Since incorporation, the company has achieved the following milestones:

    • Developed the company’s name, logo, and website
    • Determined rent/leasing and financing requirements
    • Began recruiting key employees with experience in the rental homes/apartment industry

    [Company Name]’s Products

    The Company offers a variety of rental properties, listed below:

    • 1-3 bedroom apartments
    • Single family homes
    • Multi-unit buildings
    • Short-term rentals
    • Rental of mobile homes or trailers


    III. Industry Analysis

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.
    The market size of the rental property industry in the US increased immensely, and the market size, measured by revenue, of the rental property industry, is $174.2 billion. Rental income units are an increasingly important part of the US housing market. The return on expenditure in the property market is much better than in many economic sectors.

    With tenant demand in the US increasing last year, this is thought to be related to tenants looking to downsize or move further out to save money. Most rental housing in the US is developed, financed, and owned by a diverse group of private, for-profit companies.

    As the economy of the US began to grow and demand for rental apartments rose, industry revenue grew at a rapid pace, hence opening vast opportunities for rental property companies.

    Another obvious trend that is common with rental property companies in the US is that most of them are improvising on more means of making money in the apartment rental industry; they are also acting as property developers and home staging agents, amongst other things.


    IV. Customer Analysis

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Demographic Profile of Target Market

    [Company Name’s] target market include people of all demographics. The market [Company Name] serves is value-conscious and desires high comfort and basic amenities geared towards families, students, and the working population.

    The precise demographics of the town in which our retail location resides is as follows:

     SpringdaleWyndham
    Total Population26,09710,725
    Square Miles6.893.96
    Population Density3,789.202,710.80
    Population Male48.04%48.84%
    Population Female51.96%51.16%
    Target Population by Age Group
    Age 18-243.68%3.52%
    Age 25-345.22%4.50%
    Age 35-4413.80%13.91%
    Age 45-5418.09%18.22%
    Target Population by Income
    Income $50,000 to $74,99911.16%6.00%
    Income $75,000 to $99,99910.91%4.41%
    Income $100,000 to $124,9999.07%6.40%
    Income $125,000 to $149,9999.95%8.02%
    Income $150,000 to $199,99912.20%11.11%
    Income $200,000 and Over32.48%54.99%

    Customer Segmentation

    The Company will primarily target the following three customer segments:

    • High-Income Individuals: The Company will attract individuals with higher incomes who are looking for a rental property with modern furnishings and technology.
    • Families: The Company will attract families looking for turn-key properties that are furnished and offer an array of amenities to suit their busy family life.
    • Working Professionals: [Company name] is located along a well-traveled commute route, by offering a smart property to working professionals with walking distance (not more than 10 minutes) to a means of transport.


    V. Competitive Analysis

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Direct & Indirect Competitors

    Leasing Inc
    Leasing Inc is a marketplace to find rental homes in the country. It originally started more than a century ago as a networking tool for real estate agents, but today it is a fully searchable online database of homes for both sale and rent. Leasing Inc offers an ideal rental property with different amenities that can best suit the customer’s requirements. Leasing Inc’s properties are well furnished with all modern accessories.

    Rental Barn
    Rental Barn is the most visited real estate website in the United States. Rental Barn and its affiliates offer customers an on-demand experience for selling, buying, renting, and financing with transparency and nearly seamless end-to-end service. The Company provides multiple rental apartments according to the customer’s needs and requirements.

    Homewood Properties
    Homewood Properties is a leading digital marketing solutions company that empowers millions nationwide to find apartments and houses for rent. Customers can click on the items that are important to them, from hardwood floors to walk-in closets, and select the property which they are looking for according to their needs.

    Competitive Advantage

    [Company Name] enjoys several advantages over its competitors. These advantages include:

    • Client-oriented service: [Company Name] will have a full-time sales manager to stay in contact with clients and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to his clients and will further keep in touch with his clients through newsletters.
    • Robust clientele base: Another possible competitive strategy for winning the competitors in this particular industry is to build a robust clientele base and ensure that the company’s properties are top-notch and trendy. The Company is well-positioned, key members of its team are highly competent, and can favorably compete with some of the best players in the industry.
    • Management: The Company’s management team has X years of business and marketing experience that allows them to market and serve customers in an improved and sophisticated manner than the competitors.
    • Relationships: Having lived in the community for xx years, [Founder’s Name] knows all leaders, newspapers, and other influencers, including the local leaders who fought the [Competitor] opening xx years ago. It will be relatively easy for the company to build branding and awareness of the rental property industry.


    VI. Marketing Plan

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    The [Company Name] Brand

    The [Company Name] brand will focus on the company’s unique value proposition:

    • Offering homes/apartments for rent suited for families, students, working professionals, landowners, foreign investors, and international migrants.
    • Offering a diverse range of rental homes in a prime location.
    • Providing excellent customer service.

    Promotions Strategy

    [Company Name] expects its target market to be students, international migrants, the working population, families mainly from surrounding locations in the [Location]. The Company’s promotions strategy to reach these individuals includes:

    Phone Prospecting
    [Company Name] will assign salespeople to contact and work with clients to help them buy, sell or rent real estate properties. Salespeople will use their in-depth knowledge of the real estate market to help clients find rental properties and execute all the required formalities.

    Advertisement
    Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its offerings in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

    Public Relations
    [Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its offerings in various media outlets like newspapers, podcasts, television stations, radio shows, etc.

    Referrals
    [Company name] understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer other businesses by providing economic or financial incentives for every new client produced. This strategy will increase effectiveness after the business has already been established.
    Additionally, [company name] will aggressively network with useful sources such as home contractors, real estate development companies, and businesses. This network will generate qualified referral leads.

    Social Media Marketing
    Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand the changing customer needs.

    Pricing Strategy

    Part of the [Company Name’s] business strategy is to ensure that it will work within the budget of its clients to deliver excellent properties. The real estate industry fluctuates and therefore, rental prices, for the most part, are usually out of a company’s control. However, the company will market their properties at a competitive rate to ensure they do no have vacant properties. They will also keep a tight control on costs in order to maximize profits.


    VII. Operations Plan

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Functional Roles

    To execute on [Company Name]’s business model, the company needs to perform many functions, including the following:

    Administrative Functions

    • General & administrative functions including legal, marketing, bookkeeping, etc.
    • Hiring and training staff
    • Sales

    Service and Operations Functions

    • Rental property maintenance
    • Website maintenance, updates, and bug-fixing
    • Ongoing search engine optimization

    Milestones

    [Company Name] expects to achieve the following milestones in the following [] months:

    DateMilestone
    [Date 1]Finalize lease agreement
    [Date 2]Design and build out [Company Name]
    [Date 3]Hire and train initial staff
    [Date 4]Kickoff of promotional campaign
    [Date 5]Launch [Company Name]
    [Date 6]Reach break-even


    VIII. Management Team

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Management Team Members

    [Company Name] is led by [Founder’s Name], who has been in the rental property business for xx years. He has worked in the industry most recently as a [Position Name] and has held various different positions in the management chain over the last xx years. As such, [Founder] has an in-depth knowledge of the rental property business, including operations and business management.

    [Founder] has also worked as a real estate consultant on a part-time basis over the past xx years.

    [Founder] graduated from the University of ABC and has done Master of Professional Studies in Real Estate.

    Hiring Plan

    [Founder] will serve as the [Position Name]. In order to introduce the rental property business, the company needs to hire the following personnel:

    • Real estate agent (should have real estate sales experience in residential and commercial property)
    • Property Manager
    • Marketing and Sales Executive
    • Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
    • Customer Service Manager


    IX. Financial Plan

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

    Revenue and Cost Drivers

    [Company Name]’s revenue will come from the renting properties. The major costs for the company will be staff salaries and property maintenance. In the initial years, the company’s marketing spend will be high to establish itself in the market.

    Capital Requirements and Use of Funds

    [Company Name] is currently seeking $370,000 to launch its rental property business. The capital will be used for funding capital expenditures, workforce costs, marketing expenses, and working capital.
    Specifically, these funds will be used as follows:

    • Website design/build and startup business expenses: $120,000
    • Working capital: $250,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

    Key Assumptions

    The following table reflects the key revenue and cost assumptions made in the financial model:

     Annual Number of Rented Properties
    Year 120
    Year 230
    Year 340
    Year 450
    Year 560
    Average annual growth rate5%
    Monthly mortgage/lease$3000

     
    5 Year Annual Income Statement

      Year 1Year 2Year 3Year 4Year 5
    Revenues
    Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
    Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
    Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
    Expenses & Costs
    Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
    Lease$60,000 $61,500 $63,038 $64,613 $66,229
    Marketing$20,000 $25,000 $25,000 $25,000 $25,000
    Salaries$133,890 $204,030 $224,943 $236,190 $248,000
    Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
    Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
    EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
    Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
    EBIT($56,810)$105,925 $140,152 $184,317 $234,414
    Interest$23,621 $20,668 $17,716 $14,763 $11,810
    PRETAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
    Net Operating Loss($80,431)($80,431)$0$0$0
    Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
    NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
    Net Profit Margin (%)-15.00%13.00%16.30%19.40%

     
    5 Year Annual Balance Sheet

      Year 1Year 2Year 3Year 4Year 5
    ASSETS
    Cash$16,710 $90,188 $158,957 $258,570 $392,389
    Accounts receivable$0$0$0$0$0
    Inventory$21,000 $23,153 $25,526 $28,142 $31,027
    Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
    Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
    Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
    Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
    TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
    LIABILITIES & EQUITY
    Debt$317,971 $272,546 $227,122 $181,698 $136,273
    Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
    Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
    Share Capital$0$0$0$0$0
    Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
    Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
    TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

     
    5 Year Annual Cash Flow Statement

     Year 1Year 2Year 3Year 4Year 5
    CASH FLOW FROM OPERATIONS
    Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
    Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
    Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
    Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
    CASH FLOW FROM INVESTMENTS
    Investment($246,450)$0$0$0$0
    Net Cash Flow from Investments($246,450)$0$0$0$0
    CASH FLOW FROM FINANCING
    Cash from equity$0$0$0$0$0
    Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
    Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
    SUMMARY
    Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
    Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
    Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389

     

    You can download our Business Plan Template (including a full, customizable financial model) to your computer here.