You’ve bought an investment property. That’s great. Have you thought about what comes next? If you believe a lot of the hype surrounding real estate investing, now that you’ve closed the deal, renting out a home is as easy as finding a tenant, collecting rent, and enjoying the passive income and increasing wealth that comes with renting out residential homes.
Is that what you’re expecting?
There’s a bit more to it than that.
Once you’ve bought an investment property, there are a few logistical details that need to be handled before you dive right in. You’ll need to make sure you have the proper insurance, for example.
Here is a look at what comes next and how you can prepare.
Prepare Your Property for the Charlotte Rental Market
If you’ve purchased a property that’s in generally good condition, you won’t have to spend a lot of time on renovations and rehabs. There are likely some cosmetic updates and upgrades that are necessary, otherwise you’re ready to list the home and find a tenant.
Before you do that, take care of any habitability, safety, or maintenance issues that might be lingering and need your attention.
Fix everything before you rent out the property. Some of these things will seem minor. Maybe it doesn’t make much sense to replace that closet door that sticks or the window screen that’s a bit shredded.
But, it does make sense.
The tenants looking for a rental home in Mooresville, Huntersville, and the surrounding areas will notice all imperfections. If they’re well-qualified tenants, they’ll know they have other options, and they won’t bother renting your home.
Make sure that everything is working perfectly. You don’t want to spend the first few weeks of a tenancy responding to multiple maintenance requests because things aren’t the way your tenants expect them to be.
Price Your Property Accurately
Pricing a rental home requires an understanding of the local market and the competing properties within that market. You don’t want to ask too little, otherwise you’re stuck collecting below-market rents for the length of the lease term. Why leave money on the table?
You don’t want to overprice the home, either. The rental market remains pretty hot and well-maintained properties are in high demand. They’re also commanding high rents. But, be sure you’re aligned with what similar properties are renting for in your immediate area.
Here are your most important considerations when you’re pricing your Charlotte-area rental property:
- The rental market dictates your price range
- Location always impacts price
- Pricing is seasonal
You can look at online rental sites for an idea of what homes like yours are renting for. A better idea is to talk with a property manager in the local area, who can give you data that’s more precise and evaluate your home to establish the right price.
Create a Risk Management Plan and Protect Yourself from Liability
You’ve just invested in an asset that’s worth a lot of money. You’ll have to protect it.
Start with a comprehensive insurance plan. Look for a landlord’s policy that will protect you and your rental property. You’ll need coverage for the repair and replacement costs of the physical structure. You’ll also need adequate liability coverage and loss of rent insurance. When you begin looking for tenants and putting together a lease agreement, make sure you require your residents to carry renter’s insurance. This will provide an additional layer of protection and keep you from having to pay out of pocket for potential damage that’s the fault of your tenant.
Once you’re protecting your property with insurance, you need to think about how to protect yourself from common legal mistakes. Educate yourself on the state, local, and federal rental laws that apply to your property. You’ll need to know:
- State and federal fair housing laws
- Security deposit laws
- Requirements around rental increases
- Eviction laws
- Habitability standards
There’s a lot to know, and mistakes get pretty expensive. This is another great reason to work with a property manager; we stay up to date on all the laws and we keep our properties and owners in compliance.
Charlotte Property Management Suppor
Before you launch yourself into marketing your property, screening tenants, and putting together a lease agreement, partner with a property manager.
In fact, we always recommend talking to a property manager before you buy an investment property. It’s a great way to get an idea of how much rent you’ll earn on the property you’re considering and what kind of maintenance expenses you can expect.
If you didn’t get a chance to do that, however, make sure you partner with a good property manager as soon as you can after you invest in a rental property. Choose an experienced management company with a great local reputation. As a new investor, you’ll really benefit from resources and expertise that a property manager can provide. Here’s why you need to get in touch with a management company as soon as you buy your property (if not before):
- You can leverage a great network of vendors and contractors without screening and hiring them yourself.
- You’ll have the expertise and knowledge you need when it comes to pricing, marketing, tenant screening, and preventative repairs.
- You’re protected from the risk and liability that comes with renting out property.
- You’ll have less work to manage yourself and more time to do what you love.
- You’re likely to earn more and spend less on your investment.
Good property management is a huge value to new and experienced investors in and around Charlotte and Mecklenburg County. You’ll earn more, spend less, and have a safer, more profitable rental experience now and in the future.
When you’re ready to find a property management partner, we hope you’ll consider our team. We have experience working with new investors as well as seasoned property owners who are successfully growing their portfolios. Please contact us at Wess Cason Realty. We provide real estate and property management services in Charlotte and the surrounding areas in Mecklenburg, Union, and Cabarrus County.