Real estate is always a solid investment when you have the money for it. Even if you don’t actively use the space, you can profit by renting it out. That’ll afford you a steady treacle of income and a good ROI in the long-term. Here’s how to get started.
As a new landlord, resist the temptation of advertising your property everywhere and anywhere. It might seem a little counterintuitive, but you’re more likely to succeed if you filter a little. First, consider who you want to live in your house or apartment. Put together a prototype tenant profile, as it were.
Are you okay with smokers? Singles, couples, or groups? Children or no children? How about pets? Figure out the yes’s and no’s. Once you have an idea of what kind of people you’re looking for, figure out how to reach them.
See who is moving out of the neighborhood soon and who will come in to replace them. Ask around to learn what makes that particular area attractive to tenants. When you understand the flow of tenants, you’ll have a pretty good idea of where to focus your advertising efforts and find the best people for your property.
This is always a little tricky, but there are a few key factors to consider. First, get some insight into the neighborhood real estate market. Learn the height of rent of the other properties in the area and calculate the average range. You might also discreetly inquire with the tenants if they think the prices are fair.
Next, determine the baseline value of your property (by square foot). Then add the value of all the time, money, and effort you put into design, renovations, repairs, security, and miscellaneous amenities.
Keep in mind that you have to adjust to the market. If your real estate’s total value ends up significantly higher, you’ll need to compromise. Try to find a middle ground between your investment costs and the overall prices in the area.
If you have any flexibility with where to locate the property you want to rent out, you should take time to make a careful selection. Take a page from the book of professional real estate investors. They aim for property in particular states to maximize their ROI and bring in profit on a regular basis. Beginner investors and “regular” homeowners looking to lease out should do the same.
For example, Texas consistently rates highly on lists of states for property rent and purchase. Some of its most attractive locales include Brownsville apartments for rent as well as homes in Midland. Texas is legally friendly to investors as well as offering good advantages to landlords in general. In fact, 2020 data cites it as the second best state to rent in, after California.
People like to judge the book by the cover no matter what anybody says. That’s why you should take high-quality photos for your ads. Take them yourself if you’re confident in your skill and equipment. Otherwise, hire a professional photographer.
Stage the photos strategically to show off the best aspects of the property. Make them look bright and natural. Avoid taking pictures in artificial lighting if you can; daylight will almost always produce more attractive results. Remember that these photos will be the first impression anyone gets of your property.
Once you’ve decided on your location, price range, and ideal type of tenant, you’ll need to put together a rental listing and post it online. You can put it onto dedicated real estate rental sites or your own social media. It would probably be best if you did both.
First, find out which websites are the most popular for finding houses or apartments in the area in which you want to rent out. Start by searching for something along the lines of “[property type] for rent in [location]”. Take a detailed look at the few top results.
Aim to advertise on the most popular sites to expose your ad to the most home-hunters. However, if you notice a website doesn’t feature many ads for your type of property, forgo it even if it’s popular. For example, if you’re renting out a summer house but the site is mostly about apartments, you can expect people who are looking for summer houses to overlook that particular platform.
Renting out a piece of property is a potentially great long-term financial project. Just avoid the common pitfalls, like getting bad tenants or misgauging your rates. Advertise in the right places with quality photos and sensible numbers, and you can enjoy the fruits of being a landlord for many profitable years.