Pew Research Center data show that renters head over one-third of households in the United States. This strong market makes investing in rental properties attractive to many individuals. Before getting started, it’s important to keep in mind that the rental market is competitive. This means that landlords have to work hard to ensure their property is appealing to tenants. The following are three ways to improve your chances of success.
Purchase the Right Property
There are several elements that determine a property’s suitability as an investment for the purposes of renting out, notes Auction.com. The home should be in a desirable area. This doesn’t mean it needs to be in the fanciest part of town. The home should be located in a safe neighborhood where individuals and families won’t mind staying for a while. The layout should be practical, something common that tenants seek out.
Pay attention to the structural qualities of the home. Hire a reputable inspector or two to look for major issues. If a problem is detected, find out how much it will cost to fix.
If you are new to the landlord business or simply want extra guidance, find a real estate agent with experience in investment properties. He or she can help you understand the local rental market and find the right property for your goals.
Prepare the Residence
First, make sure to address any problems. The home should be structurally sound and free of mold and pests. The plumbing and electrical systems, as well as all appliances, should be in proper working order.
Once functional issues have been addressed, you can make strategic upgrades to increase the property’s appeal. Storage capacity is important to many renters, so do what you can to increase it. Add additional shelving and cabinetry. Consider closet organizer systems and well-placed hooks. Choose neutral paint to appeal to the widest variety of renters. If the property has old windows, update them to improve insulation and noise control.
Upgraded kitchens and bathrooms provide major appeal. Look at new construction homes and watch renovation shows to determine what is popular but stay away from fleeting trends. Choose durable, low-maintenance materials that don’t require specialized cleaning products. You want tenants to be able to keep the property clean without much hassle.
Understand Legal Obligations and Business Structures
Even the most appealing property won’t stay occupied for long if the landlord is unreliable or unprofessional. Research tenant rights in your state to make sure you understand your legal obligations. Determine if you need to hire a property management company to help you meet these obligations. A dedicated property manager will handle rent collection, maintenance requests, and other duties.
The business structure you choose may not seem like a pressing issue, but this decision impacts your taxation and liability status. Many property investors choose to form an LLC for liability protection. To streamline the process, consider hiring a formation service. These companies are generally less expensive than lawyers. Make sure to read reviews and compare prices when selecting a service. When you research the best LLC services, be sure to factor in affordability, customer service, and what sort of services are offered on an ongoing basis.
There are many decisions, from forming an LLC to remodeling a bathroom, to be made when preparing a home for rent. Some choices matter more than others, but they all have an effect. Take your time to make the best choices for your business.
Real Property Management Fairmate supports franchisees with innovative systems and processes, professional marketing, volume purchasing power, comprehensive training, and a passionate support team. Contact us today to learn more!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.