The decision to reimagine your home as a rental property is one that more and more homeowners in the United States are making. Rental income is a major source of free capital and helps float homeowners through difficult financial times—like the current situation we’re living through with the coronavirus pandemic.
Your home is likely your most valuable asset, but its worth isn’t contained simply to the appraised monetary value assigned to the property or the comfort that you derive from it as its resident. Your home can be leveraged to create additional purchasing power when it comes to real estate transactions or renovation work that you hope to conduct on your home. If you’re considering the option to turn your house into a rental, there are some important factors to consider and a number of key changes to make in order to leverage the property in order to generate a new source of income for the foreseeable future to help buoy you through these tough times. Here are a few tips to help with the process.
Understand the benefits and risks associated with the transformation.
When you list your home on the market as a rental property, there are certain obligations that you must meet as a landlord. Your tenants will expect a high-quality home that doesn’t present any immediate points of danger, such as exposed wiring or a faulty roof, water heater, or kitchen sink. Consulting with a personal injury lawyer Denver, CO is often a great way to understand the obligations that you’ll need to meet as a new landlord entering the industry. An attorney can help guide you through the renovations that must be made in order to safely list the property as well as any obligations that you may be liable for after a lease agreement is signed between you and your renter.
Having legal help during this process is the best way to ensure that you’re covered when it comes to injuries and accidents on the property. You’d hate to think that the environment you’re providing is unsafe for residents or visitors, but what’s worse is the possibility of your culpability in the event of an injury without even being present for the activities involved. Start here in order to ensure your peace of mind against potential legal action or liability in the future. Adding a CPR and first aid certification online to your resume can often be a great way to help mitigate these risks. The coursework can help in your own personal life, but it will also clue you in to any potentially hazardous elements within the confines of your newly outfitted rental home and property. Keeping on the lookout for these liabilities is critical to finding success in the real estate market.
Follow up with high-quality upgrades to attract great tenants.
Making use of the highest quality upgrades available on the home is a great way to improve the rental price that your home can fetch on the open market. Increasing the value of your property will help you boost the rent and the resale value of the home. Eventually, you’ll want to sell the property, and the more you’re able to tack on, the better your bottom line will look!
Adding top-rated storm windows in Florida is a great way to lock in this measure of value in any home. Florida’s weather is a consistent stream of stormy conditions throughout the year. During the summertime, Floridians have to deal with nearly daily thunderstorms in the afternoons, and later in the fall, they batten down the hatches to outlast numerous hurricanes that are blown through and nearby the peninsula. Storm windows are a must-have on any Florida home. New homes are often built with these as a standard inclusion, but older residences may not have yet made the upgrade to this higher level of protection.
The more high-end upgrades you include in the home, the more you can expect to earn on the backend. However, this must obviously be offset against the upfront costs of a string of renovations. Hiring a general contractor to oversee the project and install a number of upgrades all at once is often the best way to lock in great rates on your whole home upgrades. The American renovation industry is worth more than $400 billion a year. Therefore, finding a professional contractor with years of experience managing a team of subcontractors and organizing each component of the work is easier to accomplish than you might think.
Keep your finances in check.
On the subject of payments, maintaining your books to the highest standard is also essential when considering converting your home into a rental property. Leasing your home is a great way to bring in additional cash, but it can be hard to keep track of all your incoming and outgoing expenses associated with the project, especially for new landlords. Utilizing a bank reconciliation solution is the best way to keep track of all these different line items in your books.
Reconciliation software and firms specialize in keeping proper track of the expenses and incoming payments in your bookkeeping. This task can quickly become overwhelming for those new to the industry, and reconciliation is the all-important process of matching expenses and payments with receipts. Traditionally, this can take hours, even for small businesses or single property rental owners. With the help of an outsourced solution to this time-consuming task, you can rest assured that your expenses will always be accounted for and your books correct. Maintaining a tight handle on your finances is critical to understanding whether you’re on target to make a profit or not. Focusing on this essential task early on is critical in creating a winning strategy that will help you break even and then turn a profit faster than ever.
Converting your home into a rental property is a great way to build a new cash infusion into your personal finances. Make sure you understand your obligations as a new landlord, and then enjoy the new influx of capital.