Owning rental properties can be a sound investment, but only if you do it right. If you’re thinking of entering the world of rental real estate for the first time, here are some tips, ideas and questions for starters to consider.
Preparing your home as rental property
When preparing to put property up for rent, make sure to prep it for the market. Here are a few ideas for making your house a more attractive rental option:
Give the whole house a thorough cleaning, or hire a cleaning service.
If you’re renting the property fully furnished then make sure furniture is in good repair and all appliances are in working order.
Change any missing or burned-out light bulbs in the house.
Have the carpets cleaned.
Remove any evidence of pets. Not only will it keep things smelling fresher, it will avoid allergy problems with any potential renters.
If you are renting a single room, or just a portion of your house, ensure that it is well and securely separated from the rest of the residence.
Advertising your property to potential renters
When you’re ready to put your house up on the market, compile a list of your house’s best features. Consider things like recent renovations, high quality materials like granite or hardwood flooring, new appliances, good views, large outdoor spaces, high ceilings, Jacuzzis and other unique features that will help your house stand out in the market. Either alone or with a real estate agent, use this list of descriptions to write a small text blurb and create a flyer to advertise your home.
Place your blurb in local newsletters and classified sections and post your flyers in community gathering areas, coffee shops, churches, etc.
Choosing the right time of year to rent
Home rentals and home purchases ebb and flow depending on the time of year. Historically, spring and summer are the times when most people are looking to move into or begin renting a new home. You will often have less luck finding renters in the late fall and winter months.
Choosing a competitive and realistic price
This part can be tricky, as you need to set the price high enough to cover your costs but low enough to attract renters. Do some research by looking at other rental houses in your area and seeing how much they’re charging for rent. A real estate agent can help with this part by evaluation your property and choosing a realistic but competitive price.
Choosing tenants
This part often seems simpler than it really is. When choosing someone to rent your property you must create, or find a professional you help you create, a legal and effective screening process for selecting tenants. You will be relying on your tenants, of course, to not only pay the rent on time but also to keep your home in good condition. Running credit history checks, reviewing criminal records and contacting references are just a few essential steps in the screening process, which you can do yourself but which are much simpler when handled by a real estate professional.
Maintaining your property while you’re not living there
This is another area in which hiring professionals might be your best option. As the property owner, it will most likely be up to you to take care of home repairs involved with electrical, plumbing and basic construction issues. If you’re not confident in you electrical, plumbing or construction work skills, you would do well to develop a relationship with local tradesmen who you can trust and rely on to do basic repairs. You should also consider whether you will require your tenants to take care of basic yard work or if you will include the price of basic landscaping in the price of rent.