Thinking About Renting Out Your Home Instead of Selling It? Read This First
Converting your current home into a long-term rental can be a good decision for several reasons. For instance, if you’ve inherited an extra home that you love, you’re having trouble selling your current home, or you’re itching to be a landlord, renting out your home might be the right thing to do. Nonetheless, it comes with plenty of challenges, which is why it’s so important to know what you’re getting into and to prepare the best you can. Below we will discuss a number of factors involved in turning a home into a successful long-term rental in 2020.
The Local Market
Whether you’ve had your home on the market for a while or you’re thinking about putting it on the market, it’s essential to know what’s going on in your local housing market. Keeping up with how other homes in your area are doing will help you to determine whether you need to make adjustments or start with a certain approach for selling your home.
For example, recently the average home in Oklahoma City is selling for 1.6% below the list price ($199,000), and it’s spent 24 days on the market. If you wish to sell, and you can offer competitive terms to prospective buyers, then maybe selling is a more practical option. In recent days there has been lower inventory and in many cases homes are selling above the list price. However, if your home would need a considerable amount of work before you can compete, then making limited improvements and renting it out might be the better option.
Necessary Major Improvements
When renting out your home, you’ll probably need to make improvements that boost appeal and value. For instance, if you have a lot of carpet in the home, consider replacing it with hardwood or laminate floors. If you have a garage, consider putting in new garage doors. If your roof is getting on in years, consider doing a full roof replacement. Projects like these will come with significant costs, but they tend to yield a good return on investment as well.
Staging the Home
Along with making major improvements, it’s also important to stage your home so that it will appeal to renters. You’ll want to tackle basic projects like decluttering, depersonalizing, and deep cleaning each space. While replacing or adding furniture that compliments the space—even if it’s temporary—can help attract buyers, rental homes are often shown with no furnishings.
Another project to consider is painting the walls, trim, and doors; neutral colors like white, gray, and cream are hard to beat when it comes to appealing to renters. Also, if you see any areas that could use a quick and easy improvement (e.g., cabinet hardware, light fixtures, appliances, etc.), addressing those issues could help your efforts.
The COVID-19 Factor
Finally, there’s no use in pretending that the real estate market is the same as it has always been. The COVID-19 pandemic—and the stay-at-home orders and social distancing guidelines that have resulted—has transformed how homes are rented. Your best bet is to utilize technology as much as you can. For example, Zoom, Skype, or other video-meeting software will allow you to show your home and interview potential tenants without violating any orders or guidelines. Also, taking quality real estate photos of your home to post online can help attract prospects.
If you feel more comfortable with showing your home and interviewing in person, then be sure to take extra precautions. This might include things like practicing social distancing and providing disinfectant wipes when prospects come to see the home.
Renting out your home can be a smart decision if you plan and approach it thoughtfully. Remember to research your local housing market, make any necessary improvements, and stage your home appropriately. Lastly, consider the COVID-19 guidelines during your interactions with potential tenants.
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NextHome Central Real Estate