Before investing in a rental property, it’s a good idea to do some research to learn as much as you can. Renting out a property can be a profitable way of investing, but it’s not for everyone. It’s important that you consider the many aspects that come into play when becoming a landlord, and have a clear idea of how to get the best results when renting out your property
Here are some tips you may like to consider before buying your first rental property:
1. Buy A Property Which You Can Rent Out
If you don't already own a rental property, then naturally the first step would be to buy a rental property. There are many issues you need to consider when choosing rental properties: location, type of property, average neighbourhood rent, mortgage, property taxes, etc. After all, the property you are buying will be the main determinant of how much you as a landlord will make. With regard to the location, ideally, you would like to buy a rental property near your place of residence. This will help you save on transportation costs and allow you to show the property to prospective tenants, regularly inspect the property and take care of some of the necessary repairs. If you are becoming a landlord for the first time and wanting to advertise privately on realestate.com.au, start small and easy with respect to the type of property. Remember, you are buying a property from which to make money, not your ideal home for yourself and your family.
2. Work Out The Money
Then do the math before you rent my house. Make sure that there is money to be made on your local market before you even buy a rental home. Calculate the rate of capitalization. The cap rate calculates the return rate on an investment property based on the expected annual rental income separated by the purchase price. You need to get a more or less precise estimate of the rent you'll be able to receive from your potential investment property to determine this.
The landlord income you receive in the form of rent is going to supplement the monthly mortgage payments; it might even match or exceed what you pay the bank. But don't forget to include other expenses when doing math – which can add up to a lot. You'll need to pay property taxes, so that can be much higher than what you're paying for your house.
Landlord insurance is also higher due to the higher associated risks when you have landlords living in an estate. Maintenance costs can vary greatly depending on whether you want to do maintenance on your own (which can take a lot of time) or to employ a specialist. The good news is that you might be liable for some tax benefits on the cost of owning and maintaining your rental property: depreciation, insurance, mortgage interest, maintenance of land, travel expenses, and others.
3. Learn What The Rules Are In Your Area
Know about landlord-tenant law. First, there are federal laws that you need to be familiar with regarding habitability and anti-discrimination. You can not discriminate against tenants as a landlord on the basis of race, colour, national origin, religion, sex, disability, family status, children, etc. Moreover, most states have more legal protections for landlord tenants. This will take into account a number of issues such as security deposits, level of access to the house, warning that you need to send the tenants before you allow them to leave, etc.
4. Select The Best Tenants
You have to screen potential tenants once you have bought an investment property and are on your way to becoming a landlord. You should do a background check on prospective tenants and a credit check – the time is worth it. While a credit score should not be the sole reason a tenant is accepted or rejected, it is a useful screening tool. Take the time to check the references from employers and past landlords in particular. You should also conduct an interview with potential tenants to ensure you communicate with them in a comfortable manner. Don't forget at all that discrimination against tenants on the basis of the criteria mentioned above is illegal.
5. Write Up A Lease Agreement
The lease can be customized. Online standards types of lease are available which you can use as a guide. You need to change the deal in a way that matches your situation and preferences, though. Be concrete. Do you allow pets, for instance? What kind of guy? How many people? Should dogs be leashed in common areas?
6. Manage and Maintain The Property
Inspect your property for rent regularly. That's why finding a place that's convenient for you is important. To prevent conflicts and misunderstandings with the tenants, state clearly how often in the lease documents you plan to carry out a property inspection. Three months are typically a fair duration which helps the tenants to keep an eye on the property without too much disturbance. Remember to record your rental property's move-in condition by taking photographs to create a baseline. If you encounter any problems during an inspection, issuing a notice and setting another inspection in a week or two is a good idea.
7. Maintain Good Records
Do proper bookkeeping and accounting. Starting from the first day, don't postpone this work until later as you get lost. You must be able to keep accurate records of all revenues and expenses and provide documentary evidence. If you are subject to an IRS audit, you will need these documents to monitor the rental property activities, prepare financial statements, and provide evidence.
8. Decide If You Need An Agent Or Not
Consider whether a property manager is worth the hire. A property manager comes at a premium but can save you a great deal of time and effort. A property manager can usually market your rental property, select tenants, maintain the property, create budgets, and collect the rent. If you want to employ a real estate manager, clearly define his / her duties. It depends on your financial condition, other responsibilities, and personal and technical skills whether you want to go with a property manager or do these tasks on your own.
If you’re wanting to rent out your property and are looking for a tenant, here are some tips and advice to bear in mind.
Have Millennials In Mind
One of the basic concepts to advertise your rental property privately is to correctly identify your target audience, research certain people's attitudes and online activities (what websites they spend most of their time on, what channels or social networks they use and for what purposes), and then "search" your rental properties there.
I can tell from working with thousands of landlords around the country, this smart approach seems to be practiced by just a small percentage. Most landlords continue to do sort of crappy when it comes to online marketing properties. Therefore learning how to market a rental property online is your ability to outsmart most of your rivals. Read that article A to Z and you're not going to be on a losing side.
Defining who will be a perfect fit for your estate
The first and foremost step to take is to determine who will be best suited for your rental property. This method is generally referred to in digital marketing as detecting the buyer's persona. It's more like recognizing a 'renter persona' in our case (hope advertisers won't get upset with me for paraphrasing the official term). The purpose of developing a 'renter persona' is to better understand your potential renters' needs and wants.
Say, you own a trendy loft in the city centre. In this case, it could be a great choice for a young bachelor, and a poor one for a two-child family. If your rental property is a single-family home in a quiet neighbourhood, the focus should be on families with children or renters over 30. If you have a spacious studio near a college or university in a vibrant community, bet on the students.
As soon as you know what kind of people your rental property will most likely be interested in, you get a huge competitive edge. You can predict what websites and social networks this person is likely to use when you know who your ideal 'renter persona' is. As a result, you can focus only on these particular channels, saving a lot of time and effort on yourself.
Write a Catchy Title and Property Description
Title and pictures are, in almost all situations, two first things people see when looking at listings of rental properties. And, as the old adage goes, you never get the first impression a second time. It should be enough for that single reason to take this move seriously.
But what does a catchy title/description mean to write, you ask. Great issue. As experience confirms, everything is about being informative and accurate. A house to rent? Make sure you mention it in your description. Do you have a garden and a big swimming pool at your property? Let your prospects learn from the start.
Catchy title and description make the game when you do additional marketing efforts for your property as well.
Connect quality pictures showcasing your rental benefits
I can't stress the importance of that point enough. It will surprise you but rental property quality pictures can generate 139 percent more clicks on your listing. And you should make sure that your rentals page is illustrated with HD and eye-pleasing images. Needless to hire a professional photographer to shoot stuff for you. You will be able to make beautiful pictures yourself, armed with some simple tips and tricks.
Get the right equipment: a good ISO performance camera, 10-22 lenses for cropped sensor cameras and 16-35 mm for full-frame ones, a tripod, and a flash for bad light shooting.
Make sure all important parts of your property are captured. This includes a living room, a bedroom(s) and a bathroom(s), a dining area kitchen, and an exterior.
Retouch images that pay special attention to vertical correction, crop, HDR, and white balance.
Creating a Virtual Tour (or 360-Degree Photograph)
I might tell it's the latest black property video tour but I got a better idea. The latest open house is a proprietary video tour. This is particularly true for people searching outside of their home state and city for long term rental properties. The greatest pressure point for them could be attending an open house. And by making a professional video tour you can easily fix that.
It will not only make your rental property listing stand out among many others, but it will also help you target specific groups of prospects – people who are unable to attend an open house due to living in another state of busy schedules.
So you shouldn't be afraid of new things: arm yourself with a GoPro or any other camera and shoot a video featuring your rental property's perks. Take advantage of some video retouching once you're done, upload your video to YouTube, and attach the link to your listing. The payoffs are enormous.
Consider taking some 360-degree pictures when you advertise on domain.com.au in case video shooting isn't your biggest talent. It is much easier, and it takes less time. What's more, there is no need for special equipment and skills. Take your iPhone, download an app like Cycloramic (this one flips your camera around and shoots 360-degree video pictures), spend five minutes and you're done.
Syndicated property listing
Let's find out what lists syndication for the starters. In general, it is a distribution of the listing of properties through all related websites. Its primary objective is to increase the exposure and lower vacancy rates, making it a great digital marketing tool for landlords.
While you can manually add your listing to all the rental websites you know, there is a way to follow a better approach. Advertise your rental property, click on the 'syndication' button and you will immediately get your listing published on 9 largest rental websites. As our experience indicates, one of the most powerful promotional ideas for the rental property is the automated listing syndication.
Looking for Tenants
Another great way to get tenants is by visiting websites that they use to find answers to their moving, renting, and the like questions. Rent street is one of the most popular websites. Here's your one-sentence intro, if you've never heard of it before: Rent street is a popular Q&A website where questions are asked, answered, and organized by topics.
Rent street users often ask questions about a given city's best or safest neighbourhoods. They inquire about long-term rental rates in a specific state/city/borough, about the best websites to use for hunting rental properties, about the best places to raise children. All of these questions are your opportunity to get in touch with prospective tenants before they contact you.
Register on Rent street, make sure you state that your areas of interest are real estate, housing, long-term rent, and property management, and get all relevant questions delivered right into your email box. As soon as you come upon questions from people searching for a rental house, put your best marketing foot forward and tell them that for a decent price you have a great vacancy pad.
Using the strength of social media
There's plenty of marketing ideas for rental property, but this one is chief among them. Social networks are king when it comes to advertising the property you rent. In related Facebook Groups, you can share your property listing, add the listing to your feed and ask friends to share it with their audiences. You can use paid advertisement tool and aim your listing for Facebook users living in a specific area. You may outsource those marketing tasks if you lack the appropriate experience. Companies like PropertySpark offer comprehensive solutions to social networking campaigns.
The good news is that video content ranks better than still images due to one of Facebook's recent updates to the algorithms. So if you've got a video tour featuring your property 's benefits, post it on Facebook along with property description, share it with relevant groups, and enjoy the results. Chances are high, you'll rent out your property before you even know it.
Now for landlords, you are well versed in digital marketing, and that means at least three positive things. Your vacancy rates will go down first and foremost. Second, you 're going to be able to choose the highest quality tenants. Second, the demand for your rental property will increase (meaning you 're going to get a chance to earn more). It's time to enjoy the advantages online marketing can bring to your leasing company. Go for it, you 're going to be glad to have done so.