Source Tap Into an Endless Source of Wealth
A rental property can be one of the most lucrative investments you can make. Not only does it bring in cash every month, but you still own a piece of property that can be sold (usually for a profit) should you wish to exit the real estate game. Currently, Americans rent more now than any time since 1965 (36%). Many of those renters need affordable housing, making owning lower-cost rentals a good place to enter the real estate market.
The shortage of rentals that Americans can afford can be a cash cow for you. While owning expensive rentals can be rewarding, owning several lower-cost rental properties can rake in just as much and often more. Not only are self-sufficient folks looking for an affordable rental, there is a long list of people waiting to get into government subsidized housing, often called Section 8. Low-Income Rentals: Profitable and Problematic
There is a stigma attached to Section 8 rentals, one that leads landlords to believe that they will trash or destroy their rental property. The truth is, every landlord has horror stories about how their renters mistreated their real estate. They also have stories about renters that paid rent on time every month and left the rental in pristine condition. Even with stringent background/credit checks, the behavior of your tenants is mostly luck of the draw. If you rent your property long enough, or have multiple properties, there is a 100% chance that you will eventually own one of those horror stories.
While there is no hard data, it is the general consensus of landlords I have spoken to agree that the lower the rent price, the larger the chance of getting a renter that will abuse your property. This scares away many investors from lower priced rentals, and if you chose to own numerous low cost rentals, the odds are much higher that you will experience abusive renters. When they move out or are evicted, you will face an extensive rehab to prep for another renter. Being a Landlord Does Not Have to Be Soul-Sucking
Rehabs can be costly, and the longer it takes to prep a property the less money it makes for you. While you can do little to prevent damage and the subsequent rehabbing from bad renters, you can make the process smoother and easier on your wallet. While either prepping a new rental, or rehabbing between renters, consider these 10 tips to keep your time and cost between renters to a minimum. 1. Ditch the Carpet
Carpet is nasty. It traps dirt and retains stains, and no matter how well you clean it, you will never get all of the nastiness out. Between spilled drinks and food, pet urination, and perhaps pests, count on replacing the carpet between each renter. Nothing makes a property look more run down than stained, nasty carpet.
Consider vinyl flooring instead. It is waterproof, does not stain, is super easy to clean, and after figuring in installation costs, it’s cheaper than carpet. While you would normally need professional installers to lay down carpet, vinyl planks can be tackled with little skill. Even when taken care of, carpet needs to be replaced every 5 years or so. A vinyl floor should last at least 20 years. When rehabbing your rental, a good mopping will usually make your vinyl floors good to go. 2. Remove Ceiling Fans
Nothing beats a nice breeze wafting through the house when it is scorching outside. Ceiling fans can make that happen. But few fixtures are more temperamental than ceiling fans. If renters hang laundry or cat toys from the fan blades, you will be lucky to get off just replacing the blades. After the blads get knocked out of balance, they wobble when rotating and are often the target of kids looking to have some fun. The result is you buying and installing a new fan.
It would be to better remove the ceiling fans and replace it with a lighting fixture that is flush to the ceiling and has nothing to tempt tenants from messing with it. Fill the fixture with long-lasting LED light bulbs and you won’t have to deal with lighting for years. The worst you will face is removing a few dead flies that manage to get into the fixture, or replacing the glass/plastic covering. Install the same type in every room to streamline any maintenance. 3. Remove Screen and Storm Doors
Both screen and storm doors are unnecessary and are often the source of aggravation for landlords. The screens get kicked out or become a victim of cat claws, and storm doors have a pane of glass that can break. They are also great entertainment for small children. Why go to the playground when you can swing on the screen or storm door? Replacing broken hinges is a pain. 4. Do Not Furnish Appliances
Many people mistakenly believe that a rental property must include a stove, refrigerator, dishwasher or washer and dryer. However, in nearly all parts of the country, landlords are under no obligation to provide appliances. If you put appliances in your rental, you are responsible for repairing them when they breakdown. Even if you use a property manager, those repairs can be a hassle and costly. Additionally, you will have to clean those appliances when the tenants move out; provided they do not take them when they leave.
You might be tempted to provide some used appliances to make the rental more attractive. Don’t. Most refrigerators, washers, etc., have a life expectancy of about 10 years. If you put in an 8-year old refrigerator you can count on it breaking down. And guess who will be wanting compensation for the food that spoiled? If you have a stove already, leaving a stove in the unit is probably as far as you should go. There are not a lot of things that can go wrong with a stove, although cleaning them can be a pain. Sure, you will lose some prospective renters by not providing appliances, but the Section 8 waiting list is full of prospective tenants. 5. Use Maintenance-Free Smoke Detectors
If your rental is older, it likely does not have hard-wired smoke detectors. The old adage that you replace the batteries in the detectors every time you change the clock for daylight savings time (twice a year) keeps your smoke detector in top working order. It also means you have to visit the rental twice a year to replace the smoke detectors. That is, if you can find the smoke detectors. Once a smoke detector starts chirping due to a low battery, your tenants will either place it in a drawer where they will never find it again, or smash it and throw it in the garbage. Since smoke detectors are required in rentals, you will have to replace every missing detector when you change tenants.
Consider using a newer type of smoke detecto r that uses an internal lithium battery. You hang it on the wall or ceiling and forget about it for 10 years. Battery technology has come that far. But since smoke detectors need to be replaced every 10 years regardless of condition, you still have a once-in-a decade chore. 6. Get Rid of the Garbage Disposal
If your rental is equipped with a garbage disposal, remove it. Disposals are a high-failure item that tempts renters to put all types of things down the kitchen drain. Disposals are another nice-to-have item that is not required in rental units. Unclogging a drain is fairly simple, but a time-consuming chore, and can cost a king’s ransom if done by a plumber. Remove the disposal and stipulate in your rental agreement that the tenant is responsible for all sink clogs and any associated repair bills. 8. Skip the Air Conditioning
While it may seem a necessity in places like Phoenix to have air conditioning, it’s not a requirement. If your rental has a forced-air cooling system, have it checked out by a professional. If it is on its last leg, remove it. If it is in good condition, consider keeping it until it shows signs of giving up the ghost. At that point, have an AC guy help it limp along until the current tenant moves out and then remove it altogether. AC repairs are very pricey, and a bill your bottom line doesn’t need. If the rental started out with window unit air conditioners, remove those as well. Not only are they a hassle, they tend to disappear. 9. Become Your Own Pest Control
Mice, roaches and other bugs and vermin are not only your responsibility, they are a health hazard. Between renters, set out snap traps (forget the useless glue traps) even if you do not suspect a rodent infestation. If you catch a mouse, set out more; there is never just one. Once your traps have been corpse-free for a week you can declare your rental rodent free.
As far as roaches and other […]
Click here to view original web page at How to Bomb-Proof Your Rental Property From Tenant Wear and Tear