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You Bought the Property, Now What?
Lee Blackburn
What are some of the first things you should do once you buy an investment property?
You’ll want to change the locks, check your insurance, and pull together all the paperwork that typically goes with any real estate closing. Once all of those to-do items are off the list, it’s time to start thinking about renting out the property you now own.
Here’s what we suggest you do first, now that you bought the property and you’re looking to get that rent coming in.
Quick Overview:
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Make Your Investment Property Move-In Ready
If you’ve taken any good investment advice before buying, you know that the best thing you can do is to think about your investment property as a business.
This isn’t a home you’re going to live in, so approach every decision as a small business owner. Imagine what tenants will think. Make it attractive before you list it on the rental market.
- Put fresh paint on the walls
- Clean the carpets or install new flooring
- Evaluate the appliances
- Make sure everything is functioning and clean
- Spruce up the curb appeal
The idea here is to ensure it looks welcoming and attractive once you list it on the rental market.
Prepare to Protect Yourself and Your Property
We mentioned an insurance plan, and that’s where risk management starts. There are other important ways to protect yourself once you get started, too.
- First, insurance. Look for a landlord’s policy that will protect you and your rental property. It’s important to be adequately insured. Talk to your insurance agent and make sure you have enough coverage for your property and your liability. You’ll also want to discuss things like loss-of-rent insurance.
- It’s also important to educate yourself on the state, local, and federal rental laws that apply to your property. You’ll need to know what’s required in terms of fair housing compliance. You’ll need to understand security deposit laws and eviction laws.
- Think about your lease agreement. Do you know what’s required in a lease agreement? It has to be both enforceable and compliant in the state of Tennessee.
Landlords can get into a lot of trouble by making mistakes that seem pretty innocent. Fair housing laws are strict. So are security deposit requirements. There’s a lot to know, and mistakes get pretty expensive. Educate yourself or surround yourself with experts who can help you protect yourself from risk and liability.
Price Your Nashville Rental Property
Once you have closed the deal and prepared the property for the rental market, it’s time to decide on a rental value.
This is where a lot of new investors feel challenged, especially if they don’t know the market or they can’t access reliable data that tells them where their rental range is likely to be.
Pricing is important, and here’s what you need to consider.
- Nashville’s rental market. You might have a specific rental amount in mind, but you can’t arbitrarily price your property. Study the market. Get to know what similar homes are renting for.
- Consider the competition. If there are a lot of homes just like yours, you may need to lower your price a bit. If there aren’t a lot of homes like yours available, you can probably ask for and receive more.
- Pricing can be seasonal. Time of year can also impact how much you can earn, and the most popular time for tenants to move is late spring and through the summer.
- Location and property condition are important. Tenants will pay more for the right neighborhood. They’ll also pay more when you offer renovations and upgrades that make the home modern and inviting.
Once you have priced your property accurately, it’s time to market the home.
Attract and Place Well-Qualified Nashville Tenants
Advertise your rental property online. This is where most tenants begin their search for a home.
If you want to attract the largest pool of tenants, use all the popular rental sites, including Zillow, Trulia, HotPads, Rentals.com, and Zumper. Create a listing with a lot of great photos and an accurate and concise description. Consider video. Share your listing on social media sites.
When tenants begin to call and text for more information, you have to be responsive. Schedule showings. Walk your prospective tenants through the property and answer their questions, or set up some self-showing technology that allows them to explore the home on their own. Offer them a chance to apply for the home, and then make sure you know how to screen those applications.
Screening requires that you check:
- Credit score and history
- Eviction history
- Criminal backgrounds
- Income and employment
- Rental history
Make sure that you establish some consistent rental criteria and follow all fair housing laws. Document your screening process so you can demonstrate it is objective.
Once you find a qualified tenant, you’ll need to sign a lease and discuss rules, regulations, and expectations. Collect the security deposit and settle on a move-in date.
Choose a Nashville Property Manager
As you begin to make the preparations that are necessary to lease, manage, and maintain your home, you’ll want to look for excellent property management.
If you don’t already have a management partner you’re working with, now is the time to start looking. Your best bet is to choose an experienced management company with a great reputation. There are so many benefits to good property management as a new investor:
- 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 Nashville. When you’re ready to talk about your investment plans and your needs as a rental property owner, please contact us at Omni Realtors & Property Management. We love working with new rental property owners.