According to Census data in the US, over 19.95 million rental properties exist in the country, and these, in total, have around 48.2 million units. No wonder investment properties can be a great way to make some extra cash flow. However, there are a few things you need to do before you get started. This blog post will outline some of the most important things you need in order to rent your property.
1. Do your research
You can’t just buy any old property and expect to make money from it — you need to do your research first. Consider the location, the condition of the property, who your target market would be, what rent you could realistically charge, and how much work would need to be done to the property before it was ready to be rented out.
It’s also essential to have a realistic idea of your return on investment (ROI) — don’t expect to make a fortune overnight because it’s unlikely to happen! For example, if you spend $100,000 on a property and plan to charge $1,200 per month in rent, it will take you around 10 years to break even (not including any maintenance costs).
In addition, remember that you’ll be responsible for paying property taxes, insurance, and any necessary repairs or renovations — so factor these costs into your calculations too.
2. Get adequate insurance
Once you’ve bought your property, you’ll need to make sure it’s adequately insured. This is important in case anything happens to the property while it’s being rented out, such as damage caused by tenants or theft. It’s also worth considering landlord liability insurance, which will cover you if a tenant is injured while on the property (for example, if they trip and fall down the stairs).
Make sure you understand the different types of insurance available and choose a policy that meets your needs. You may also want to consider getting a rider on your policy for any valuable items on the property, such as jewelry or art.
Regardless of whether or not you have insurance, though, it’s always a good idea to keep up with routine maintenance on the property to prevent any accidents from happening in the first place.
3. Secure an EPC
A property energy performance certificate (EPC) is required by law if you want to rent out your property in the UK. The certificate assesses the property’s energy efficiency and provides potential tenants with information about the property’s running costs.
You can get an EPC from a registered assessor — it will cost you around £120 for a standard assessment, although the price may be higher if your property is large or complex. Once you have the certificate, it’s valid for 10 years.
If you don’t get an EPC before renting out your property, you could be fined up to £5,000. Therefore, it’s definitely worth getting one!
4. Have realistic expectations
When it comes to renting out properties, things won’t always go smoothly — there will be times when tenants don’t pay their rent on time or cause damage to the property. It’s important to have realistic expectations and not get too attached to your property, as it’s more likely that you’ll end up with problem tenants at some point during your tenure as a landlord!
Of course, you can take steps to avoid problem tenants, such as conducting thorough background checks and reference checks. However, even if you do everything right, there’s always a chance that things will go wrong.
In addition, you might face other potential problems as a landlord, such as legal issues or complex repairs. It’s important to be prepared for these eventualities and have a plan for how you’ll deal with them if they occur.
5. Communicate with your tenants
Communication is critical when you’re renting out a property — you need to be clear about what your expectations are, and tenants need to feel like they can come to you with any problems they have. Make sure you set up an efficient system for collecting rent payments (such as using an online service like PayPal) and give tenants a way to contact you if there are any issues with the property (such as repairing a broken appliance).
This is important because if tenants feel like they can’t communicate with you, they may be less likely to take care of the property or pay their rent on time. In addition, good communication will help to build a good relationship with your tenants, which is vital for maintaining a positive rental experience for both parties.
6. Stay up-to-date on legislation
Finally, it’s crucial to stay up-to-date on rental property legislation– everything from safety regulations to anti-discrimination laws. Not only will this help you avoid any legal problems down the line, but it will also show tenants that you take their safety and well-being seriously.
You can use several resources to stay up-to-date on rental property legislation, such as government websites, legal publications, and trade associations. In addition, you can always consult with a lawyer if you have any specific questions about the law.
If you’re thinking about renting out a property, there are a few things you need to do first in order to prepare yourself (and the property!). This blog post has outlined six of the most important factors to consider before getting started in the world of rental properties. By doing your research, getting adequate insurance, securing an EPC, having realistic expectations, communicating effectively with your tenants, and staying up-to-date on relevant legislation, you’ll be well on your way to being a successful landlord!