As a homeowner, you may eventually decide to rent out your property instead of selling it. Alternatively, you may own an investment property that you plan to rent out. If so, there are several steps you need to take to prepare your property for the rental market.
First, you need to calculate the numbers to ensure that renting out your property is profitable. This includes determining a competitive monthly rent and calculating the gross monthly rental income. Many landlords follow the 1% rule, which suggests that the rent should be 1% or more of the property’s purchase price after repairs.
Next, consider whether you want to take on the day-to-day demands of managing your property. If not, you can hire a property management company to handle your landlord responsibilities. However, keep in mind that property manager
fees typically range from 6% to 12% of monthly rent and can eat into your profits.
To make your property more appealing to potential renters, you may need to spruce it up. This could involve making improvements, such as adding a fresh coat of paint or modernizing the kitchen or bathroom. Additionally, consider staging the property and hiring a professional photographer to take high-quality images.
Marketing your rental is also important. You may want to hire a real estate agent, especially if you’re new to the area. They can help you showcase your vacancy and provide valuable expertise.
When it comes to screening potential tenants, look for those who are gainfully employed or have a cosigner to guarantee payment. Make sure they have a history of paying rent on time and that they meet your lifestyle requirements. Conduct a background check and watch out for red flags such as poor credit scores, criminal records, and an unwillingness to provide references.
Finally, draft a lease agreement once you’ve chosen a tenant. The lease should include details such as the names of occupants, property description, duration of the tenancy, rent and security deposit amounts, and maintenance policies. Make sure to research California’s landlord-tenant laws and anti-discrimination laws to ensure you’re following all legal requirements. San Francisco has a complicated landlord-tenant law. Hiring a professional property manager who is knowledgeable about the law and can implement it is recommended to prevent potential issues down the line.
Overall, preparing your home to rent is a time-consuming process that requires careful consideration and planning. However, if done correctly, it can be a profitable and rewarding investment. Keeping real estate is a great way to passive income and generational wealth. Remember to strive for open communication with your tenants and be accessible and respectful when issues arise.
TheSFPropertyManagement is a full-service property management company that specializes in residential single-family and multi-family properties in the San Francisco Bay Area. If you are a tenant searching for an apartment, please contact TheSFPropertyManagement today at 415-712-0507 to discover the available options that best suit your needs. Similarly, if you are a homeowner seeking a property management company to take care of your property, kindly contact us for assistance.
