Any new undertaking is bound to prompt questions, especially when it involves a large sum of money. As you dive into your first investment property, you’re probably wondering how to select a promising property, how to attract future renters, and what your responsibilities will be. Read on as we explore all this in detail!
What Makes for a Promising Property?
There are many things that contribute to how profitable an investment property is. Topping the list is location. For example, when you look at the available data, Virginia offers a profitable rental market, both for short- and long-term rental properties. The vacation rental market and the residential market both reflect a strong history, with the price-to-rent ratio teetering on the top edge favorability for renters. That means residential renters will find it more desirable to rent than buy when they examine their finances.
Beyond the numbers, the property itself should offer desirability to renters. Residential renters will look carefully at things like the suburb, available storage, and neutral decor. Evolve notes vacationers, on the other hand, search for things like a useful kitchen, wifi availability, parking, and pet-friendliness. In both cases, eye appeal will always be important, and better renters will be willing to pay more for an aesthetically pleasing environment.
How Do You Attract Renters?
Once you settle on a property, you’ll want to ensure it both attracts quality renters and is reasonably easy to maintain. For a vacation rental, this might mean including classic and well-made furniture, ample lighting, and a touch of luxury. For both vacation and residential properties, it should include upgrades like refreshed cabinetry, newly painted walls, low-maintenance (but well-maintained) landscaping, and hardwood floors.
Selections like these will spark interest from renters while ensuring your upkeep is minimal. For example, hardwood floors will stand up far better to renter wear and tear than carpet, and they are in high demand these days. Even if renters ding it up, the average cost to refinish hardwood comes in at $3 to $8 per square foot, which is unlikely to be needed very often. On the other hand, carpet would most likely require replacement more frequently, and would look worn as soon as the first grape juice gets spilled. Per Carpet Captain, you can expect the lowest end carpet to run $1 per square foot.
Of course, once your property is all prettied up, you need to get the word out about what a great location it’s in, and how beautiful and comfortable it is. BiggerPockets points out that since everyone is shopping online these days, professional photos are a must for effective property marketing.
Your online listing should include all the pertinent details, such as space, amenities, parking, and pet-friendliness, and you might consider some incentives to draw your initial clientele. A bonus night or free month can make your place all the more tantalizing to prospective renters.
What Are Your Responsibilities?
As a property owner, your responsibilities center around providing a functional and safe living space. That means when things break, it falls to you to ensure they get repaired in a timely manner. The more responsive you are to requests, the better chance you have of getting and keeping quality renters, too. This means late-night calls, bills from repairmen, and so forth.
Some property owners elect to pass the daily grind to a property management company. These professional services can tackle everything from properly screening tenants to hiring maintenance work while you enjoy passive income. Generally speaking, you can expect to pay a property management agency between 8 and 12 percent of the monthly rent.