Buying and moving into a new home is one of life’s great experiences, especially if you’re buying your first home. From getting that pre-approval to the “yes!” response on an offer to closing and moving in, every step is exciting. And while the process is engaging and fun, it’s important to prepare for moving day […]
5 Tips for preparing investment properties for renters
Investment property owners are often keen on renting out a home as soon as possible to get a return on their investment. Before they can do that, the home must first be prepared.
Here are five tips investment property owners like yourself need to know to prepare your properties for renters:
1. Get the property inspected
When a property is purchased, a home should be inspected before it is rented out. An inspection will catch environmental and structural hazards such as mold, radon, and roof problems. If a problem is found, repairs will be needed before the house can be rented out. Repairs will ensure a safe space for tenants and protect your investment.
2. Update the property
Renters expect properties to be reasonably up-to-date. That means modern appliances, new carpets, and systems that work. Boost the curb appeal of the property by landscaping and removing weeds. If not, you can expect to be waiting a long time for your home to be occupied or lower the price—meaning lost revenue for you.
Updating the home’s interior and exterior will also go a long way in helping attract renters, especially if you are attempting to rent a stigmatized property. Updates to the property will also increase its overall value.
3. Price it competitively
Don’t just slap a rental price on your investment property and call it a day. Pricing the home competitively will help you afford the property and attract renters in high-rental areas. Take into consideration:
- Condition of the home
- Mortgage payments
- Utility rates
- Nearby amenities
Are you willing to offer monthly fees for utility costs, or do you want the tenant to cover their utility costs? Whatever you choose, remember to factor them into the cost of the rent.
4. Have a lease or rental agreement
Leases and rental agreements are documents that protect the rights of both you and the renter. These documents outline the monthly rental fee, due dates, and more. Consult with a lawyer to draw up a lease or rental agreement, depending on how long you want to rent out the property.
You must also understand the difference between a lease and a rental agreement. A lease is typically for a more extended rental period, generally 6- or 12-months. A rental agreement is very similar to a lease but is shorter and often month-to-month.
5. Know Your Preferences
Who is your preferred tenant? How long will the rental term be?
Figure out if you will allow pets or smoking on the premises, as well as small updates and landscaping. If you agree to pets, a pet fee may be required for cleaning after the renter moves out. Screen all applicants before deciding to rent to them. This will protect your interest in the property and help prevent damage and loss.