Turning your house into a long-term rental has several advantages, not least of which is the extra money you can make with a business venture like this. Managing property is a lucrative venture, and the market has a lot of potential for homeowners who aren’t currently looking to sell their house.
Here are some things to consider before putting your house on the market as a long-term rental:
1. Plan ahead
The biggest and most important part of undertaking a venture such as this is to plan. Don’t just jump in feet first — do your research and make sure you have a full understanding of the ins and outs of rental management. You’re here, so you took a great first step!
You will need to determine whether you can rent out your home if you still have a mortgage. Check with local lenders to see if you qualify for a second mortgage if you are planning to move into a new home. There also may be stipulations about how long you will have needed to live in the previous home if you want to rent it.
One thing you should consider is partnering with a property management company like PMI American River to oversee the finer details. Management companies deal with tenants and potential renters, allowing you to spend more time pursuing other goals and less time dealing with the minutiae of collecting rent, overseeing repairs, and other things of that nature.
2. Make renovations
Part of planning ahead is making necessary renovations before doing anything else. Doing cosmetic updates like cleaning the carpet (or removing it!), updating wall paint, or buying new appliances could take that outdated look to the next level and help you attract potential tenants.
Bigger fixes should also be considered. A kitchen renovation, for instance, should be done every 10 to 15 years. An updated kitchen will give your rental a modern look and feel and is one of the most sought-after features when that potential renters look for. The average cost of a remodel will set you back around $22,500 — or more if you want to hire a designer. Bathroom remodels are even more important with an average return on investment of up to 80 percent.
The point here is to take a look around your house and make a note of all the things you will need to fix and change before putting it on the market, then factor these into your plans.
3. Take a look at the market
Before you make the ultimate decision on what to do with your home, be sure to check out your local market and make sure it’s a decision that’s right for you. Monitor the local market and determine how long houses have been for sale or for rent. The COVID-19 pandemic has especially had an impact on the housing market — forbearances, mortgage and rent forgiveness, and more delinquency have contributed to a housing bubble that looks scary from the outside.
All of this is to say: Do your research before you make any decisions about renovations, price points, or long-term investments.
Ready to get started?
Once these to-dos are on your “to-done” list, you’ll be in a better position to make a decision about renting out your home. Turning your house into a rental is a great investment — you just need to plan ahead! And when you’re ready to turn a profit, consult Property Management Inc for the resources and guidance you need to navigate and succeed in this venture. Book a consultation or call (916) 398-2025 now.