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Real Estate is the Easiest Path.
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Investing In Real Estate
Leasing Your Property
As in all aspects of Real Estate Investing there are several decisions needed before putting your property in the rental market.
- Professional Rental Agent or Do It Yourself. The first decision to be made is whether you have the desire and ability to handle the process yourself or if you want to find a Professional Rental Agent. To do it yourself you will need to spend time not only taking calls and interviewing potential renters, you will also have to take care of all the little things which pop up such as repairs and exterminating. You will also need at least basic handyman skills. If you decide to hire an agent they usually take care of everything except major repairs and just send you the bills.
- Term. In some areas it can be more profitable to rent according to season. In perfect times this is a really good strategy but it is a lot more time intensive in having to advertise and interview more often. The other alternative is to require a yearly lease. The average time a tenant stays with a yearly lease which is priced with the market is 2 years.
- Setting the right price. Setting the right price can go a long way to alleviating the problem of your property sitting vacant for longer than anticipated. As an example, Albert recently purchased a converted condo in a small 11 unit complex. He set the rent for his unit at $950/m and had a tenant the first month. There are 4 other units also on the market for rent and after 3 months they are still vacant. Each one was at least $150 more a month. According to my figures $950x12=$11,400 vs $1200x9=$10,800; setting the right price is more profitable. By analyzing the market and setting your price right on or just a small amount below, you will be vacant less.
- Deciding on the degree in fixing up the property. It is a definite that the better a property looks the better it rents. At the least you need to have fresh paint and be spotlessly clean. A small amount of money and effort can go a long way in making tenants happy living there. Making the outside and landscaping nice increases the curb appeal and draws more prospects in and also makes the tenants happy.
- Interviewing Prospects. This is also very wise to do. You should always do a credit and employment check to make sure the prospects have the ability to pay you. There is nothing worse than always having to chase down your money. Contacting previous landlords is also a good idea. It takes a lot less effort to check out someone before than have to evict them.
- Complete Lease. It is always a good idea to have a complete lease stating everything each party is expected to do and when. Also if your Strategy states that you will hold a year and sell, make sure to add the ability to show the property into the lease.
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