There are nearly 50 million rental properties in the United States. Almost 50% of those are owned by individual investors. The reason owning rental properties is so popular is because it’s considered to be a stable investment.
That’s understandable when you consider that about 36% of U.S. households rent their homes. As long as those numbers continue to hold, owning rental property will be a good investment. Considering that the population of the U.S. grows by over a million people every year, it’s safe to say that the numbers will hold.
If you own rental property, there are three steps you need to take to ensure that it’s appealing before you post your ads and start looking for tenants. Those steps are thinking like a tenant, solving safety issues, and protecting your investment on paper. Let’s get into what each of those entails.
1. Think Like A Tenant
When you’re preparing a home to rent, you must think like a tenant. You need to consider their needs and desires as you prepare the space, make changes, and write out the lease. Here are a few things that you, and tenants, should consider when renting a home.
- How much are you going to charge for rent, and how much does the average renter’s budget allow for?
- Is the property in an area people will want to move to, and if not what can you offer to offset that?
- Write up a lease that’s clear and answers any questions the tenant may have.
- What can you do to customize the property in a way that will be beneficial to the person who ends up living there? Consider what you would want if you were the one living there.
- How much will the utilities cost and will the average renter be able to afford them?
By thinking like a tenant before you create your listing, you’ll make it easier to find a quality candidate to rent the space. You’ll also increase the likelihood of having a long-term renter move into space, which reduces the amount of time and effort needed to continue making money on the property.
2. Solve Your Safety Issues
As the landlord, you may be held legally liable for any injuries sustained on the property by your tenants, or other property guests. To limit the risk of that, you should handle any safety issues involving the building before it is rented out and perform maintenance regularly once tenants have moved in.
Common issues you should look out for include:
- Lead paint and corroded lead pipes. Exposure to these materials can lead to serious health issues, especially in children.
- Mold problems. Some molds are harmful to health, particularly if the person already has underlying health issues.
- Carbon Monoxide leaks. Low levels can cause mild nausea or headaches and high levels can cause you to lose consciousness, sustain brain damage, or die.
- Steps, porches, or other wooden areas that have become rotted and unsafe.
By locating and fixing these issues before a tenant moves in, you can avoid the possibility of someone becoming sick, or you facing legal action for failing to keep the property safe.
3. Protect Your Investment On Paper
The last step you need to take before renting out your house is to create a leasing agreement that protects you and your property.
Terms need to be set to guarantee that your tenant pays for any unreasonable damages that may occur while they’re renting from you, that you receive security deposits, and that the length of the agreement is clearly defined.
Once these conditions have been agreed to in writing, you’re ready to safely rent out your property and begin collecting from your investment.
If you’re at this step and you’re ready to take on another property investment, you can apply for a fast, simple, and dependable investment property loan to cover the cost of your next investment. Before long, you’ll be a real estate mogul.
By taking these three steps before you post your rental listings, you’ll guarantee a pleasant experience for you and your future tenants.