If you’re stepping into a new phase of your life and relocating, chances are you’ll be leaving behind your old home. If it’s currently a buyer’s market, then it might be a good idea to shelve the sale of your property in the meantime. Have you thought about transforming your old home into a rental property?
If you’re passively waiting over an empty property, as well as continuously spending on property maintenance, try generating income instead. Here are ways you can convert an old home into an attractive rental space:
Take time to review and update your insurance policy.
Residential home insurance can differ from a rental home. Focus on acquiring the right kind. You need to obtain a landlord’s insurance. This policy shields you from liability and also offers property protection.
Consider the following scenarios:
- Calamities such as fire/ flooding – Your furniture and furnishing can be heavily damaged, so having an insurance policy would be beneficial.
- Structural damage in your home or heavy repairs – You’ll likely experience a rental income loss, so in that case, you can utilize the landlord insurance.
- Accidents/tenant injuries – These are often unforeseen, but can cost a lot. The landlord insurance will spare you from spending heavily on medical treatments.
Assess the property conditions and conduct necessary property improvements.
As a new landlord, you need to consider the perspective of a tenant. Evaluate the state of your home. Ask yourself the right questions.
Where do you need to upgrade and perform massive repairs? Are there furnishings that need to be replaced and added? Is the place tidy and attractive?
Check your rental unit for the following:
- Curb appeal – Your property will be judged based on how attractive the front area is. You may want to trim weeds, add plants and repaint the unit to make it look brighter and inviting. You can hire a landscaper to do it for you. Don’t forget to enhance the appearance of your entryway.
- Cleanliness – Decide whether your rental home needs to be deep cleaned. If so, hire professional cleaners to make the space immaculate and attractive. During property showings, you’ll be confident to face interested prospects. It also sends a message to new tenants that you value your rental property.
- HVAC systems and appliances – Check whether heaters, ventilation and air conditioning units are functioning properly. Do you need to replace them with more energy-efficient models? You must weigh the cost of frequent repair versus newer, better-performing systems.
Build your landlord skills.
A landlord takes on several roles. You can be coordinating with licensed contractors one day and meeting prospective renters the next. You’ll never know what each day brings.
One day you’re facing an emergency, and the following day, you’re dealing with a tenant complaint. In short, being a landlord requires a great degree of flexibility.
Review these essential skills:
- Communication skills – When dealing with different personalities, one has to be a clear and objective communicator. You must know how to interact professionally, even if there’s a conflict. You also need effective listening skills since you’re coordinating with vendors and contractors, as well as your tenants.
- Knowledge of landlord-tenant responsibilities – Landlord rights, duties and disclosures are things you need to be mindful about. Moreover, be aware of tenant rights and duties, as well as their state law protection. As a landlord, you’re required to adhere to state laws and regulations, so legal knowledge is crucial.
- Marketing and tenant screening skills – To attract the right tenants, you should know how to implement marketing strategies. To spot a potential tenant’s red flags, you should be able to perform a detailed tenant screening. On top of this, you must be aware of the Fair Housing Act to avoid violations.
Hire a property manager.
If you’re relocating to somewhere far or even another state, managing a rental home can take a toll. You’ll be spending on transportation expenses and dedicating plenty of time and energy shuttling back and forth.
In this case, it may be wiser to engage the services of a property manager. They have efficient systems in place and long-term experience. Their expertise lies in making your rental home more profitable.
Here are other things property managers can do:
- Set the right rental rate – As experienced professionals, property managers can conduct accurate rental analysis. They’ll be able to assign the optimal rental rate given your property features and similar properties in your neighborhood. It will neither be too low nor too high.
- Find high-quality tenants – Since property managers have been screening tenants for a long time, they’re able to evaluate the right tenant fit for your property. They can access rental background histories, check credit scores and verify financial records. This is done in record time, as they have ample resources available at their disposal.
- Collect rent promptly – Property managers use advanced technology to monitor tenant payments. They also offer multiple payment channels so your tenants can conveniently pay. If a tenant fails to pay, property managers are also in charge of eviction procedures.
- Keep financial records – Property managers set up efficient systems considering that they manage several rental units. You can take advantage of their online portals for convenient monitoring of the state of your rental business. This is useful, especially for a property owner who lives far away.
Being a landlord can be an exciting endeavor, especially if you have the time and energy. However, it’s not for everyone. Some would prefer to be stress-free and enjoy the consistent returns deposited in their accounts without the worries. Others don’t have the extra time to build on the required landlord skills.
However, there’s always a way to enjoy the rewards of owning a rental unit while simultaneously maintaining peace of mind. You can turn to professional property management experts who are dedicated and reliable.