Preparing to Make Your Home a Rental
Preparing to Make Your Home a Rental
There’s a delicate balance to preparing a home to serve as a rental property. You want the residence to be in good condition, but it’s important not to go overboard, as you may not see a huge return on your investment via rents collected.
What to Know Before Making Your House a Rental
Before you can even begin renovations or cosmetic updates, be sure it’s allowed where you live. Some Home Owner’s Associations (HOAs) have restrictions regarding rental properties, so do some research before making the switch. Here’s what else you should know and do before making your house a rental.
Does Your Mortgage Allow It?
Check with your lender to see if there are stipulations in your mortgage regarding living in your home as a primary residence before it can become a rental. Sometimes a mortgage does not permit a property to be used as an investment property, or there is a time period to fulfill before doing so.
There may also be regulations regarding short-term (such as Airbnb or VRBO) rentals versus long-term rentals. Some mortgages allow for one type of use but not the other.
Hopefully, you already have a form of homeowner’s insurance. But did you know you need to change your policy if you’re going to rent your home instead of live in it full-time? Before you make your home a rental, change your insurance policy so you’re covered as a landlord, and your property has the right coverage for renters. You not only want property insurance but liability insurance as well.
Determine Who Will Manage the Property
You can manage the property yourself, or hire it out to a property management company. For both short-term and long-term rentals, it can be nice to have someone act as a go-between when tenants have concerns. Additionally, a property manager can handle the leasing process, screening tenants for approval and collecting rents.
You’re welcome to be more hands-on as a landlord, but it may not be feasible if you have multiple properties or live far away.
What’s the Market Like?
To stay competitive and get the most out of your rental property, do some research regarding the current market. What are renters looking for these days? What types of upgrades are necessary, and which ones are overkill when it comes to setting a rental rate? This research plays an essential role in the next part of the process, which is physically preparing a property to be a rental.
Renovations Worth Doing for a Rental
A home inspector and an appraiser can help you determine what your home is worth to renters, and what improvements you should consider before putting the home on the rental market.
Home Inspector – Someone who inspects the house to identify issues that need to be repaired
Home Appraiser – Someone who determines market value of the home based on its condition and location
With insight from an inspector, appraiser, and perhaps even a realtor, you can start making a list of what renovations you should tackle in your rental. Ultimately, the improvements you make should make the home more marketable, and reduce how much maintenance it will require while it’s being rented.
Before you work your way down your honey-do list, be sure you follow THESE home repair rules from Burbach Companies. For a long-term rental, here are some of the best renovations to consider.
You don’t have to gut a kitchen and completely remodel it to get happy tenants and a profitable rent value. But, even small changes can help draw in renters and limit how many repairs you’ll have to make in the future. Consider updating all the appliances, painting or replacing the cabinets, and installing new countertops. These changes will give new life to your kitchen, even if it’s otherwise straight out of the 90s.
As with the kitchen in your rental, you do not have to rip the bathroom down to the studs and start all over. But, some subtle bathroom upgrades, such as those listed HERE by Smitty’s Quality Glass, can increase your home’s value and transform its look.
A bathroom update can be as simple as a new mirror or shower enclosure, or painting an existing vanity and installing better lighting.
Whether it’s the entire house or just high-traffic areas, investing in quality flooring is a good choice for your rental. Upgrade from carpet that stains and holds on to odor, and install durable floors that can withstand people, pets, and the inevitable messes they make.
According to a survey conducted by Dumpsters.com, 35% of those polled preferred carpeting in the basement, and hardwood flooring upstairs (or elsewhere). Keep that in mind when determining what type of flooring to install in your rental property.
Here’s how the rest of the survey breaks down:
- 32% hardwood
- 28% carpet
- 17% vinyl
- 13% laminate
- 10% ceramic
- 29% hardwood
- 27% ceramic tile
- 24% laminate
- 18% vinyl
- 2% carpet
- 35% carpet
- 22% laminate
- 17% ceramic
- 17% vinyl
- 9% hardwood
- 33% hardwood
- 23% vinyl
- 21% laminate
- 17% ceramic
- 6% carpet
- 53% hardwood
- 18% carpet
- 12% laminate
- 9% vinyl
- 8% ceramic
Make a big impact on a small budget by painting the walls of your home before renting. Neutralizing the walls, ceilings, and trim is a great way to help potential renters see themselves in the space.
Curb appeal is one of the first things a renter notices about your home. Do yourself a favor and ensure your home’s exterior, from siding to the lawn, is sending the right message. Not only will a fresh coat of paint on the exterior give your home a fresh look, but it offers a layer of protection to it as well.
Make sure your sprinkler system is up to par and can easily be controlled by you remotely, or by the tenants in the house. Set up lawn care services if you don’t want to rely on your renters to take care of mowing, weed treatment, or pruning trees and shrubs.
If you’re going to undertake exterior updates, did you know you can recycle some of your materials? Instead of repeatedly filling your curbside trash bin each week until yard debris is cleaned up, look into services like the ones offered by Asphalt Materials in West Jordan, Utah. They accept materials including asphalt, concrete, rocks, and sod for environmentally-friendly disposal.
If you’re not going to renovate specific rooms in your rental, there are some renovations or upgrades you can carry out that will have a positive impact on your bottom line. Many renters look for the following when searching for a place to live, so consider adding them to your property:
- Air Conditioning
- Covered Parking
- Extra Storage (such as a garage or shed)
- Fenced-in Yard
- Washer and Dryer (or at least hookups)
The last step before renting your home is having it professionally cleaned and photographed for the listing. This is, of course, something you can do yourself or hire out to your property management company to save yourself the time and hassle.
After putting in all this work you can see why it’s important to first see if renting your home is even allowed in your area, and why it’s you need to get insurance to protect yourself and your home against damages.