Terri Ramsey Beavers Renting out your home can be a lucrative venture, providing you with a consistent income stream and other potential long-term financial benefits. Believe it or not, you can expect to earn between 5%-10% of your home’s purchase price every year as rental income. That’s because there’s still a high demand for rental properties, especially in modern locations. You can tap into this opportunity by making your unused space or home available. But before you dive head-first into this venture, you need to know what steps to take first. The following tips can guide you.
1. Research your local market
You need to know all you can about your local market before deciding whether you want to rent out your space. So, conduct thorough research about rental costs, expenses, and expected revenue or income you can make. Take the time to look into rental rates for properties similar to yours in the area. It also helps to know the vacancy rates and demand for rental homes where you live. That is important as it will determine if you’ll have enough offers for your property when you put it out for rent. The last thing you want is for your space to remain bare for too long while you spend money maintaining the place.
Also, the higher the demand for rental properties in your area, the more you can expect to earn, as you’ll likely receive more offers for your space. Your research will also help you to set a competitive price and determine whether renting your home is financially viable.
2. Prepare your property
So, you’ve conducted your research and are convinced you can earn enough from your space. The next thing you want to do is prepare your property. Your home or building should be in excellent (or at least good) condition to rent. At the barest minimum, you should meet all safety and legal standards required by local authorities for landlords. That means fixing all wiring and electrical issues, ensuring fire safety, conducting the necessary repairs, painting the walls, and ensuring the space is presentable under local regulations and renting laws. You can invite experts to conduct a property appraisal to be sure it’s fit for renting.
Preparing your property also means beautifying it to attract the best. The more attractive your property is, the more offers you’ll likely receive. Take the time to spruce up the interior with the right decor, but it shouldn’t end there. Invest in boosting curb appeal. For example, you can cover bare exterior areas with artificial turf grass from companies like North Texas Luxury Lawns. That will bring life to your property while increasing its rental value.
3. Research local landlord-tenant laws
After preparing your property, there’s even more research to do before you get your first tenant. Acquaint yourself with local laws regulating the relationship between landlords and tenants in your area and what responsibilities are expected from both parties.
This step is necessary because such laws dictate your rights as a landlord and your duties to your tenant. They also cover issues about discrimination when screening potential tenants.
The last thing you want to do is break any of the rental laws, as that could mean attracting some legal penalties.
4. Advertise your space
After satisfying yourself that your space is ready for its first tenant, it’s time to put it on the market. Thankfully, you can find several online platforms dedicated to advertising rental spaces. Find one best suited to your location and learn how to market your space.
You want results as soon as possible, so put your best foot forward. Start by determining what features of your rental property to highlight to attract the best offers. For example, if your building has a well-designed outdoor living area, spacious storage solutions, and a pool, you want to highlight them in your ads. That also means taking excellent and clear pictures of those sides of the property. But don’t forget about social media platforms and word-of-mouth when putting your property out there.
5. Create an extra emergency fund
Finally, treat your rental property like a business, and businesses come with expected costs. Create an emergency fund dedicated to handling unexpected expenses arising from a rental property. For instance, a refrigerator might break down, the plumbing system leak, and your tenant might miss a month or two of rental payments.
It would be best to have available cash to handle such unexpected costs and financially cover yourself. That’s where your emergency fund will come in handy. Please note that this is separate from your regular or personal emergency fund.