Becoming a landlord is an exciting, but slightly terrifying experience. The first time you have a property in your possession that you plan on renting out, you can wind up feeling like you have no idea where to begin. We are here to help with these top six tips for getting your new property ready to rent.
Before you tackle step one, take a deep breath, and celebrate that you have made it this far!
1: Start By Cleaning & Inspecting
The first thing you will want to do is visit the property and do a thorough inspection. Be extremely detailed and make note of anything you find that needs repairs, replacement, or simple maintenance. It is much easier to handle these tasks when the property is unoccupied and when you aren’t in the middle of showings.
While you inspect the property, go through and clean the interior and exterior of the unit. Nothing will deter potential tenants quite like a run-down, dirty property. If there are overgrown bushes, trim them and make the yard look appealing. If the home is dusty and in need of a deep clean, either roll up your sleeves and get to work or hire a professional cleaning company to do a thorough job. If there is carpeting in the unit, hire a steam cleaner to give the carpets a fresh look.
2: Schedule Repairs & Maintenance
Take the list you made from the step above and get busy scheduling repairs and maintenance. If you are your own handyman, then plan on blocking out a large chunk of time to handle getting the property ready. If you are new to landlording and you don’t plan on doing your own maintenance and repairs, start building strong relationships with local contractors.
Items you should take care of before renting out a property include:
- HVAC tune-ups
- Changing air filters
- Replacing light bulbs
- Making sure windows operate and have screens in place
- Painting and touch-ups
- Spraying for pests
3: Make Sure You Are Insured Properly
As a landlord, you will need to make sure you have the right insurance policy for your rental property. If you aren’t sure what insurance you need, talk to the insurance company you have a homeowner’s policy through. They can help you update your records and keep you protected through a policy that covers losses due to tenant negligence, fire damage, water damage, and other natural disasters.
4: Draft A Lease & Talk To A Lawyer
Before you are ready to start listing your property and moving tenants in, you will need to draft a solid lease. A lease, or rental agreement, will protect you from misunderstandings with your tenants. It will act as a legal agreement, which binds both you and the tenant to sticking to your written word. Leases cover a huge array of things from move-in dates, to monthly rent prices, to pet policies, to responsibilities of the tenant, and more. When you create your lease, you can use an online program like LawDepot to help, or other resources.
Once you have drafted a lease, it is wise to consult with a local attorney who knows the specific laws and regulations of the city and state you are operating in.
5: Decide On Rent Prices
After your property is in tip-top shape and you have a legally sound lease drafted, it is time to decide on the price you will charge for rent. You can use a program like Rentometer to determine prices in the area. You can also check out similar properties in the same part of town on Craigslist and other listing sites.
While you are deciding on the price for rent, determine what you will charge in deposits. If you will be accepting pets, figure out if you are going to charge a pet fee, pet deposit, or pet rent.
6: Determine How To Manage The Rental Process
After you have prepared the property, put together a lease, and determined your rent prices, you need to build a solid game plan for the rental process. Choosing the right tenant is one of the most important aspects of making your rental investment a success. You want tenants who will be responsible, pay on time, and not cause you the headache of an eviction.
Make sure your plan includes the following:
- How you will list the property
- What rental application process you will use
- How you will screen tenants
- What you will include in the screening process (e.g. credit checks, criminal history, eviction history)
- What criteria you will have for acceptance (this needs to a be a solid plan you stick to or you can find yourself facing a Fair Housing Act violation)
- How you will accept rental payments