Getting started as a landlord may seem overwhelming. Once you have a rental business up and running, however, it can be a very rewarding investment.
After you’ve purchased or inherited a property, it’s time to start the process of getting it ready for tenants.
In this article, we’ll be covering how to set up your new rental property.
Preparing the Property
You need to get your property in the best condition possible before thinking about renting to tenants.
First, you must get the property inspected. A professional home inspector will be able to ensure that your property complies with the legal standards of habitability. They’ll look at structural integrity, electrical wiring, water quality, sanitation, and more.
After getting your property inspected, you’ll need to make repairs and renovations. Start with basic repairs such as replacing hinges/locks, fixing dents in the wall, and servicing faulty appliances. You should also give your walls a fresh coat of paint. Finally, you may want to consider taking on larger renovation projects, such as installing hardwood flooring or smart technology, as this will boost your property’s value.
Lastly, don’t forget about curb appeal. Your property’s exterior is the first impression prospective tenants will have, so make to stay on top of landscaping, power washing, painting, etc.
Determining Rent Rate
It’s crucial that you get your rent rate right. A rent rate that’s too low won’t get you the revenue you ought to have, whereas a rent rate that’s too high will leave you sitting on a vacancy for an extended period of time, bringing in no revenue.
The best way to decide on a good rent rate is to research similar properties in your area. Visiting listing sites and networking with other landlords can help you land on a rent rate that’s competitive and fair. Don’t only look at square footage. The features and amenities your property offers play a role in determining its value.
Marketing the Property
Unless you’re buying rental property with existing tenants, you’re going to have to market your property to find tenants.
The first thing you must do is create a solid property listing. This is comprised of three major components:
- The Headline – A single attention-grabbing line that contains key information such as your unit’s price, location, and number of beds/baths
- Photos – High-quality pictures of your apartment, showcasing the most important rooms first
- The description – More detailed information about your property, such as dimensions, amenities, and rental policies
Next, you must know how to advertise a rental property listing. The best place to market listings today is online, specifically on listing sites such as Zillow and Apartmens.com. These sites are reasonably priced (oftentimes free), and they consistently receive a high volume of renters every day.
Choosing a Tenant
Your business depends on having a high-quality tenant who consistently pays rent on time and doesn’t damage your property. To help avoid bad tenants, you must perform thorough tenant screening.
First things first, make a good rental application. This will allow you to gain basic information about tenants, such as their previous residences, employment history, and proof of income. Next, you must run a credit report, criminal history check, and eviction history check. All of this information will help you determine if a tenant is likely to pay rent on time and not cause you problems. Be sure to adhere to a tenant scoring system and familiarize yourself with fair housing laws.
Managing the Property
After you’ve found a great tenant, it’s time to set your policies, draft a lease agreement, start collecting rent, and perform the other property management duties.
Oftentimes, landlords will hire individual resident managers or rental property management companies to help manage their units. In this day and age, one of the best options for landlords is to use property management software. Through a cloud-based application that provides you with a plethora of tools, you can easily stay on top of your landlord responsibilities yourself without having to spend a ton of money.
Setting up a property to rent out to tenants consists of several crucial components. Now that you know how to get started with a new rental property, you’ll be on your way to running a successful real estate business in no time.
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