Selling a house can be a time-consuming process. Depending on the market, it can take some time before you get an interested buyer. A great alternative to selling is to turn your home into an investment property. Sprucing up the place and making some modifications can add value to your home and make it an attractive option for those looking to rent a place. It can also be a great way to earn extra income while remaining noncommittal – you can decide to sell it later, or even keep it if you changed your mind. Here we give you some of our tips to turn your home into a profitable rental property.
The Process of Making a Home an Investment Property
When it comes to real estate, whether it be buying, renting, or selling your home — it is always important to make informed decisions in the process. Making your home an investment property can be a great route, as long as you know the steps and what questions to ask.
1. Know Your Expenses
This is the key first step in deciding whether it is a lucrative option for you to be renting your house. You can estimate this in a few ways. First of all, having an idea of how much you would be renting your home for is a good start. Comparing the average prices of similar homes in your local area can be a way to go. Will your rental income be enough to cover the cost of the mortgage on the home? If you are not going to make a substantial profit, you may want to consider what changes could be made to increase the value of your home, or perhaps just take the time and wait until the market makes it more profitable for you.
2. Make Necessary Repairs
Going along with the first step in the process, knowing what repairs you need or want to make factors into what your expenses will be. Look first at what needs to be done, versus what is more superficial or surface level. For example, repairing the leak in the roof would be the key focus versus changing the type of countertops in the kitchen. It would be wise to have an inspector come and take a look at the place thoroughly prior to listing it on the market so you can be aware of what needs to be done. This way, nothing will come up in the renting process that takes you by surprise.
3. Turn Attention to Design
If there are not a lot of necessary repairs, then you can turn your attention to the aesthetics of your place. Is the kitchen dated? Are the appliances old? Are there places where the layout is awkward and could be modified to allow more of an open floor plan? There are several routes you could go with the design, and it helps to look at the styles popular in your particular region. Not every change has to be a big remodel, either. There are lots of ways to modernize a place without breaking the bank. A paint job goes a long way, as well as clean carpets and floors. Simply changing the knobs on cabinets can give them a fresh feel, as well as the light fixtures around the home. The biggest thing to remember is you want your home to be clean, organized, and appealing.
4. Think About The Future
It’s best when it comes to an investment property to have a long term plan. The idea of renting and having some extra income may seem appealing, but you need to know what your plans are for the future and what you want to gain from the experience. If the mortgage on the property is paid off, for instance, it will be the most lucrative for you since you will not have to cover that expense. Also, something to think about is whether you are going to want to move back into the house a few years down the road. There can be taxes associated with this process, as you will have to define it as a personal residence. Knowing the numbers and fees will help you to factor that in later on down the line.
Get Help Managing Investment Properties with CENTURY 21
If you’ve decided that renting sounds like a good option for you, then it is time to turn to reliable sources for help in the process. CENTURY 21 offers a wide variety of property management services that will ease stress and ensure that everything runs smoothly. From finding tenants and negotiating contracts to working with HOA and city ordinances, CENTURY 21 will take care of it all. There can be a lot to handle when it comes to an investment property, so let us manage it with our experienced team. Contact us today to get a plan started that works for you!