Data cited by Comfy Living indicate that the majority of millennials plan on being renters for life. This suggests that becoming a landlord is a fairly safe investment. However, there are a few things to keep in mind as you get started. Today, we outline three of the most important aspects of owning a rental property.
1. Understand the Legalities
Before you get started, it is important to understand all rental laws and potential tax ramifications, as well as the laws that pertain to your particular state and locality. You’ll also need to choose a business structure, based on which is the best fit for your company.
If all this seems a little overwhelming, you might want to check out exactly how to start an LLC. A formation company can walk you through many of the processes, from funding to choosing a location to drafting an all-important business plan to help your new venture hit the ground running.
2. Prepare the Property
In order to attract the best tenant you can, it’s wise to assess the local housing market. You want to compare your rental to other properties available in the area to ensure that yours is priced competitively and that you’re getting good value. Comparing features to home’s in the market will also help you determine if you should adjust your price.
In most cases, you will have to prepare the property for the new tenant. This can be as simple as deep cleaning the home or as complex as doing major renovations. Read reviews and ask for recommendations. Meet with the contractor in person to make sure you feel comfortable allowing them on the property. Always be very clear about your expectations, and make sure you understand the contractor’s plans and prices.
Choose durable materials that are simple to maintain. If something requires specialized care or expensive cleaning materials, your tenants may be unable to properly maintain it themselves. Rentce suggests that when choosing paint colors, go for neutrals. This allows tenants to bring in their own furnishings and accessories without worrying about the wall color clashing. Use a primer and high-quality paint, so the paint stays in good condition throughout the tenancy.
Don’t forget that the outside of the property should look as good as the inside. This is potential tenants’ first impression of the home, and you want it to be positive. Make sure the lawn is trimmed and all plants and trees are neat and healthy, for example. You should also upgrade the house number. You can use these metal letters for signs. Look for companies that use high-quality metal, like brass, copper, aluminum, and steel, to create attractive and classic signage for your home.
3. Be a Good Landlord
Perhaps the most important aspect of preparing to rent your property is understanding how to be a good landlord. Always be respectful and professional. Take your tenants’ concerns seriously and address them promptly. Follow all the laws regarding fair and safe housing. Show compassion, but don’t allow yourself to be taken advantage of.
Try Your Hand at Real Estate Investments
It is possible for rental properties to generate significant income, but you need to do some preparing before diving into the real estate market. To get the most out of your investment, understand all the laws, take care of the property and take care of your tenants. If you prove to be a good landlord, then you will likely have a positive – and hopefully lucrative – experience.
Article written by Christopher Haymon for America’s Loan Company.
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