Thinking about renting out your home, but you’re not sure whether you’d be able to attract tenants or charge enough rent?
The market really drives whether your home will be a good rental investment. You’ll need to be in a desirable neighborhood, you’ll need to have a well-maintained home, and you’ll need to provide the amenities and benefits that tenants are looking for in their next rental home.
Talking to a Lakewood property manager is a great way to get a feel for the current rental market and how your property would perform. We can make some estimates on rental value, repair costs, and talk about what might be needed to get your home ready for the rental market.
As you’re deciding whether or not you want to rent out your house, let’s talk about some tell-tale signs that it would be a successful and profitable rental investment.
Location is Everything
You know enough about real estate to know that location matters when you’re buying, selling, or renting out a home. Tenants, like owners, want to live in a neighborhood that’s safe, attractive, and close to everything they need, including schools, shops, restaurants, entertainment, and recreation.
If your house is in a remote location, difficult to find, or outside of great school districts, you might have some trouble finding a tenant quickly. If it’s not near commuter routes, tenants may hesitate to rent it.
This does not mean it’s impossible. There are renters out there who are looking for homes that are out of the way. They may want privacy and space and extra acreage. But, in general, most tenants are going to prefer a rental home that’s close to everything they need in their daily lives. A good location means you have a good rental property.
Space and Square Footage Meet Tenant Demands
Different types of tenants will be looking for different types of homes. You will have residents who need only one or two bedrooms. You will have residents who need four or five bedrooms and a separate bathroom for each. Some tenants will want single-family houses with large yards. Others will prefer a low-maintenance condo or an affordable unit in a multi-family property.
There’s probably a tenant out there for you – no matter what kind of home you have.
But, to earn as much money as possible on your property, you need to appeal to as many tenants as possible. This will help you attract the largest pool of potential renters, prevent you from losing money on long vacancies, and ensure that good tenants are competing for your home, which will drive up your rental value.
Generally, a three-bedroom, two-bathroom home will do very well on the rental market in Littleton, Lakewood, or anywhere in the surrounding areas. If your house has a yard, that will be a tell-tale sign that tenants will want to rent it. When the yard is fenced, you’re in an even stronger position, especially when you’re attracting tenants with dogs and children.
If your house is smaller than 800 square feet or larger than 3,000 square feet, you might spend more time looking for a tenant than you will if your home is around 1,500 or 1,800 square feet.
With more and more tenants remote workers, providing a work-at-home space will be especially attractive on the rental market. Maybe it’s a small den that can be used as an office, an extra bedroom, a finished basement, or some loft space that can accommodate a home office. Even an extra large living area in an open floor plan can be set up with a work space. These are the elements of your floor plan that will stand out. An open floor plan is a tell-tale sign that you’ll easily rent out your home. Closet space is important. Tenants want storage, too. An attached garage is important to renters.
Your Home is Well-Maintained and Upgraded
You won’t earn much in rent if your house is deteriorating and you have no interest in repairing or updating it.
Maintenance will be an ongoing necessity when you rent your home out to tenants. All those minor things that you have been living with will need to be addressed. Habitability and safety must be paramount. But to be a good rental property, you also need to pay attention to aesthetics. You need to be willing to make some improvements so your property is competitive on the market.
Here are some things that will need your attention before you list your home on the rental market:
There must be functional plumbing, including hot water and a safe sewer system.
There must be access to electricity. Outlets have to work.
There must be working appliances. If you provide a washer and dryer, you’ll have to maintain it and replace it when it no longer works. Kitchen appliances should match and be newer models. You don’t have to provide stainless steel, but tenants will be looking for energy efficiency.
Floors have to be in good condition, and that might mean new carpets or hard surface flooring.
New paint will be necessary on the walls and potentially the ceilings, doorways, baseboards, and exterior.
Have a complete inspection before you rent out the home so you know if anything needs to be repaired or replaced. Is the roof in good condition? Are there any sinks that are leaking or toilets that run? All of these issues must be taken care of before tenants move in.
When you’re thinking about renting out your home, you want to earn enough rent to contribute to the mortgage, insurance, taxes, and other expenses associated with your home. There’s also money to be made in the long term, as your home appreciates in value and your rental value increases. You also earn money with tax deductions that are only available to rental property owners.
There’s a lot of opportunity in the current rental market, but you have to provide a house that tenants will want to rent and be willing to pay top dollar for.
To really understand where you’ll land on the rental market, consult with professional property managers. We’d be happy to share our opinion on your property and how it would do as a rental. Please contact us at PURE Property Management, Lakewood property management experts serving residential landlords in West Denver and the surrounding areas, including Littleton, Golden, Wheat Ridge, Arvada, and more.