Running a rental property business can be a great way to earn extra income or cover your mortgage after moving somewhere new. But, like with any investment, success isn’t guaranteed. If you can’t find great tenants who are willing to pay your rental rates, you could wind up losing money on your real estate venture.
As you prepare your property for rent, consider the features that tenants want to see. A few simple upgrades can help you charge more for rent and minimize vacancies. Whether you’re about to purchase an investment property or make improvements on one you already own, here are some features recommended by We Heave Ho that will help ensure your rental is a success.
What to Consider Before Buying
If you haven’t yet started your property investment business, part of setting it up is getting it legally established and filing your Articles of Organization. We recommend filing the paperwork for a New York LLC since it’s flexible and offers great legal protection. The next step is getting your FEIN and setting up a business bank account to separate your personal and business finances. After that, you should search for a realtor who can help you find great rental properties that can turn a profit for your business. Keep in mind that your competitors will be charging various rates for rent, and you should keep up with what they’re charging and determine which prices are competitive so you can gain a greater ROI. When looking at neighborhoods, you’ll also want to consider important location factors like the local crime rate and job market, the quality of nearby schools, and the potential for future developments in the area.
Making it Move-In Ready
Unless you own a brand-new home, there’s a good chance your property needs a few repairs and upgrades to make it move-in ready. Tackle some renovation projects that will make your home appear more modern and inviting to future tenants. For example, you may want to paint the walls, replace the flooring, update the kitchen, or install some new plumbing fixtures in the bathroom. And, of course, you'll want to make sure the property is neat and organized before advertising it to renters. Don’t hesitate to call a professional if you’re feeling overwhelmed.
If you’re going to be making upgrades to the home, you’ll have to secure your funding first. Many homeowners turn to cash-out refinancing to pay for renovation projects. Cash-out refinancing involves replacing your mortgage with a new, larger loan and receiving the difference between the two loans in cash.
Safety and Security
Renters want to feel safe in the place they call home, so security should be one of your top priorities. To start, The Balance recommends improving the lighting around your property to deter potential intruders from lurking around. You should also pay special attention to door and window security. Heavy-duty doors, deadbolt locks, peepholes, and window locks can do a lot to secure the property and help your tenants feel safe. For an added level of security, consider installing a home security system and placing security cameras around the front entrance and common areas of your property.
You want your home to attract the best possible tenants— tenants who will pay rent on time, respect your property, and stick around for a while. To do this, make sure your home provides all of the amenities that high-quality tenants are looking for. For example, many tenants are willing to pay more for rent if their unit includes a washer and dryer. Some other desirable features to look out for include covered parking, a fenced-in yard, extra storage space, and modern appliances.
Becoming a landlord and owning a rental property business can be an attractive idea, but renting out a property requires a lot of planning and preparation. Don’t rush things by looking for tenants before your property is ready! Making a few repairs and improvements can go a long way to protect your investment and ensure you get the returns you’re looking for.
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