Building a solid rental property investment portfolio can set you and your family up for creating generational wealth. But, it’s not as easy as buying some rental units and then waiting for the passive income to roll in. 

The key to successful real estate investments in Maryland is running your rental properties like a business.

By the end of this article, you’ll have a step-by-step guide on how to start a successful rental property business in Maryland.

How to Start a Maryland Rental Property Business

To start a rental property business, you need just one rental property. As you learn the ins and outs of being a landlord, you will gradually grow your rental property portfolio. But first, you’ve gotta learn the ropes of running the business.

Step 1: Conduct Market Research

The first step in starting a rental property business is conducting market research. This means researching current rental and real estate market conditions. This can help you decide where to purchase an investment property and if it’s the right time. 

It’s also a good idea to look at the population dynamics of the area where you would like to invest. How many residents rent their homes? Is there an expected increase in residents in the next few years? Which neighborhoods are the most attractive for renters, and are area improvements planned? 

Understanding the market conditions and future plans of an area can set you up for success when buying your first rental property in Maryland.

Step 2: Create a Business Plan

Now that you have an idea of where you would like to buy a rental property, it’s time to create a business plan.

Your business plan will include estimated expenses, including the initial investment and operating costs, as well as estimated investment returns. 

This document lays out your entire plan for managing your investment. Think of it as your game plan for success! 

Step 3: Establish an LLC in Maryland

It’s always a good idea to establish a business entity, like a limited liability company (LLC), to protect your personal assets. Purchasing a rental property with your LLC and running all of your expenses through it makes paying taxes much easier and more organized. 

Plus, if a tenant ever tries to sue you, your personal assets, such as your cars and residential home, are protected.

Step 4: Secure Financing

As a first-time real estate investor, you will likely require financing to acquire your first rental property. Shopping around for financing with different mortgage lenders and learning about different loans and programs you may be eligible for can take time, but it’s worth it. 

Use your business plan to secure the correct amount of funding with your lender. Learn about different interest rates and payback terms and how they fit in with your business plan. 

Step 5: Purchase Rental Property

You’ve got your funding; now it’s time to hunt for the perfect piece of real estate to start your Maryland rental property business. 

Consider working with a real estate professional to help scout out the best rental property opportunities in your desired area. Depending on the property and circumstances, they can also help you negotiate the best deal.

Step 6: Hire Your Team

You’re in the process of closing on your rental property, and you’re beginning to picture how you’ll manage it. When building a rental property business, you’re going to need a team to help you. 

Most landlords hire the following professionals to successfully manage their rental properties:

• Leasing Agent
• Property Manager
• Accountant
• Real Estate Lawyer
• Maintenance Contractor

While it’s possible to manage a rental property independently, it takes a ton of time and effort. You need some hands on deck if you want to run your rental property like a business.

Step 7: Apply for Licenses and Permits

One of the most important parts of owning a rental property is making sure you’re compliant with local and national real estate laws. In the state of Maryland, all rental properties must be licensed to rent. 

You must apply for your rental license with the county where your property is located. 

Rental property registration is also required in Maryland. If you plan to renovate the property before tenants move in, you may also require building permits as well. 

Step 8: Take Out Landlord Insurance

Just as you protect your own home or even your own business, taking out landlord insurance is key to protecting your rental property business. 

In the case of major weather damage or if a tenant does not pay rent, landlord insurance can keep your rental property business afloat. 

Step 9: Market Your Property

You’ve got your rental property, your team, all of the required licenses and permits, and your landlord insurance—your rental property is officially ready for tenants! 

Market your rental property on reputable websites like Trulia and Zillow to find high-quality tenants. Make sure to upload high-resolution photos and as much information as you can about the property to get the most attention. 

It’s also helpful to work with a real estate professional, like a property management company, to help fill vacancies. With their professional resources and experience, you could find a tenant in 30 days or less!  

Step 10: Build Your Rental Portfolio 

Once you’ve gotten your rhythm and seen some profits from your first rental property, it’s time to expand your rental property business. Adding more rental properties to your portfolio means more rental income and wealth-building opportunities! 

Keep an eye out for hot real estate markets with exceptional deals that would fit perfectly in your portfolio. 

Who knows, in a couple of years, you could have ten—or twenty—properties under your belt.

Run a Successful Maryland Rental Property Business with Mainstay Management

Starting a successful rental property business in Maryland on your own is a ton of work. But it doesn’t have to be! 

With Mainstay Management, earning passive income through rental property investments has never been easier. 

Our team of real estate professionals is here to manage the day-to-day tasks required to operate your rental, fill vacancies fast, address tenant issues, and coordinate repairs. 

Contact us to see how we can help you run your rental property business in Maryland today! 

If you enjoyed this blog post, make sure to read Using Your IRA to Buy Rental Property: A Beginner’s Guide next!