If you’re anything like me, you calculated what your home would rent for before you bought it. There’s no cheaper financing than homeowner mortgages, so why not build your empire through simply keeping old homes as rentals?
But converting your home into a rental property isn’t quite as easy as flipping a switch. Renters aren’t going to treat your baby with the gentle touch that you did, and they won’t be as forgiving as your spouse when something goes wrong.
So what must a soon-to-be-ex-homeowner do when preparing their home for its second life as a rental property?
Jump Through the Bureaucratic Hoops
In many large, hyper-regulated cities, rental properties must be registered, inspected, and levied with fees — sometimes with more than one governing body. In my home city of Baltimore, landlords have a bare minimum of three sets of red tape. They must register all rental units with the City and pay an annual fee (of course). They must register all rental units with the State (the Maryland Department of the Environment), pay another annual fee, and submit lead paint paperwork. This, in itself, is an expensive set of headaches: Every rental unit must be inspected and certified by an approved lead inspector — in between every tenancy.
Check your local laws, and recheck them often, even if you think you know them. Being informed goes a long way in helping you avoid hassles, heartaches, and hurt profits later.
Stock Up on Air Filters
Your next hard-knock landlording lesson: Most tenants won’t do anything for your property unless you make it unbelievably easy for them. Stock up on the right size of air filter, and place them right next to the filter slot. Then, write down the exact filter size, write it on a sticky note, and put it on the refrigerator with the words, “Please remember, every 3 months!” You might go so far as to set a reminder in your smartphone calendar to contact the tenant.
An independent and intelligent person might wonder, “Why do I need to write the filter size in several places and remind the tenant to change it?”
Because otherwise, someone will find a way to mess it up.
Protect Your Hardwood Floors!
If you have hardwood floors, they probably won’t look the same after your first set of tenants moves out.
With that said, there are a few things you can do to try and protect them. First and foremost, write a very explicit clause into your lease agreement requiring renters to put felt pads on all furniture feet before they move in.
But like we just outlined, you need to make it easy on the renters if you want any hope of compliance. Buy a pack of felt pads (with a variety of shapes and sizes), and hand it to the tenant when you sign the lease package. Reiterate verbally the requirement that they put felt pads on all furniture feet, and tell them the first pack is “on the house.”
As importantly, it makes it a lot easier for you to deduct money from the security deposit if they damage your floors. Wrap up that discussion with. “Believe me, I’d much rather have the property back looking like this than keep your deposit.” Friendly, but still a reminder it will cost them if they ruin your gorgeous floors.
When Replacing the Carpets, Think Defensively
Sure, those light Berber carpets might brighten up the room, but the slightest stain stands out like an escaping convict in a prison spotlight.
Consider mid-tone carpet colors, and talk to your carpet company about what they offer that hides wear and stains well.
One other trick is to spring for a plush, thick pad, but install lower-grade carpeting. A plush pad makes even cheap carpeting feel softer and richer, and doesn’t need to be replaced between each tenancy (like carpets often do).
Brainstorm Low-Cost, High-Glamour Touches
If you had $200 in your pocket to spend on boosting your property’s asking rent, how would you spend it?
Think outside the box on this one. You want either uncommon upgrades that you can brag about in the listing or upgrades that add charm, luxury, or a certain je ne sais quoi.
One idea is smart home tech. It’s still uncommon enough to add a luxury flare to a rental listing, and most smart home upgrades cost less than $200. On the downside, it’s one more thing that can break, and older renters may be more irritated than impressed.
I personally like installing quirky, charming hardware on kitchen and bathroom cabinets and drawers. For example, in my old home (which I converted to a rental property), I noticed the powder room sink was seashell-shaped. I decided to go full-kitsch: I installed seashell cabinet knobs, hung small shore-themed decorations, and painted the walls a breezy blue. The stone tiles on the floor were already sand-colored.
It may sound tacky on paper, but it was routinely described as “adorable!” by visiting women. (I think I heard an approving grunt once from a male friend, but I can’t be sure.)
People love little touches and details. Sure, everyone covets the big-ticket items like gleaming marble countertops, but little touches like memorable cabinet knobs go a long way in adding charm. They’re also priced with a single digit, rather than four.
If Repainting, Use Semi-Gloss
Semi-gloss paints cost marginally more, but they scuff less easily. It’s also far easier to wipe spills and other marks off of them, making them more likely to survive multiple tenancies.
All too often, landlords need to repaint in between every tenancy, which can be a profit-killer. Boost the odds that you can paint between every other tenancy, not every single one.
It’s a bitter pill to swallow, but the simple fact is that tenants are interested in their own comfort, not in the long-term care and value of your beloved home. And who can blame them? Rational people behave based on incentives, and tenants just aren’t very incentivized to treat your home with kid gloves.
This is not to say your renters will flagrantly abuse your property; hopefully, they won’t. But landlords need to think defensively and make their home as indestructible as possible. Renters will put some mileage on your once-gleaming home, so fortify it to withstand as much damage as possible.
What tips would you add to this list?
Let me know with a comment!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.