Rental property ownership can be an excellent source of income, especially if you already own a home that you no longer want to live in. This provides you with an opportunity to become a real estate investor without having to spend money acquiring an asset.
If you’re nervous about entering the rental market and becoming a landlord, don’t be.
Local Visalia property management can take care of the leasing, management, and maintenance of your property. This will allow you to treat your old home as a business and earn money from it without being personally involved in the day-to-day logistics or tenant relations.
The reason you need to treat your home as a business is pretty simple: it’s the best way to maximize what you earn in rent and over the long term.
Let’s take a closer look at what we mean by that.
Adopt a Business Mindset
The most significant mistake you will make when renting out a property that you once lived in is remaining emotionally attached to the home.
Once you move out and allow tenants to move in, it no longer remains your home. Instead, it becomes a business that provides an opportunity to earn income. Running a business requires you to allocate resources to manage and maintain the asset. You should challenge yourself to set goals, make a plan, draw up a budget, and measure your results to achieve the hoped-for objectives.
A Business Requires Consistent Systems
Leasing and managing a rental property can be unnecessarily difficult without a set of systems and processes in place. Things can get quickly disorganized, you can lose track of necessary maintenance, and if you’re not responsive and available to tenants, you could find yourself losing them.
To effectively treat your property like a business and rent it out, you need a procedure for marketing, screening, leasing, inspections, rent collection, lease enforcement, communication, security deposits – the list goes on.
This is where local property management is so valuable. Your property managers already have these processes in place. We will treat your property like a business by implementing business systems that keep it running profitably and smoothly.
A good property manager is always interested in improving those processes as well. We’re reviewing our own systems and policies consistently to make sure they’re still working for you. If they’re not, the necessary adjustments will be made.
Don’t launch into renting out your home without having procedures and systems in place. This is a critical component to treating your property like a business.
Investing in Your Rental Property Business
Even if the home you’re moving out of is fairly new and in excellent condition, you need to keep up with the demands of tenants in the Visalia rental market. Pay attention to what tenants are looking for, and be prepared to meet that demand. This may mean:
- Upgrading to energy-efficient appliances when yours start to deteriorate.
- Installing security systems and video doorbells, which have become very popular with tenants.
- Investing in new paint and flooring
- Improving your landscaping for better curb appeal.
These improvements don’t have to be expensive; you can keep the updates cost-effective and reasonable, but you must ensure your property is competitive on the market. It’s part of doing business and treating the home like a business. A business owner is willing to invest in their business, especially when that investment leads to higher income and returns.
Understand the State and Federal Laws
Running a business comes with liability and risk.
One of the most important ways to reduce that risk is by educating yourself on the laws, rules, and regulations that pertain to renting out a property. As a Visalia landlord, you’ll need to know the fair housing laws, security deposit laws, and restrictions around eviction. You’ll have to stay up to date on habitability standards and requirements around service animals and support animals.
Protect yourself against bad tenants and potential lawsuits. Make sure you have adequate insurance in place and relationships with excellent vendors who can respond to emergency, routine, and preventative maintenance issues.
This will take time and resources. If you cannot remain legally compliant, make sure you can lean on a property management partner.
Insuring Your Business
Insuring your property is crucial. A lot of new investors will quickly get a policy that covers liability and the physical home, but they’ll forget about things like loss of rent coverage. Talk to an insurance agent and make sure you’re getting as much coverage as you can. Buy at least $1 million in liability coverage and make sure you re-evaluate your coverage amounts every year as the cost of materials rises and so does your property value.
When you lived in the home previously, you likely had a homeowner’s insurance policy. Now that you’re running a business, that policy will no longer work for you. It won’t cover you if there’s a claim. Make sure you switch to a landlord policy before you place a tenant. And, you should require your tenant to carry renter’s insurance. This will protect you and your business as well as your tenant.
Work with a Visalia Property Management Company
Anyone who runs a business surrounds themselves with smart, competent partners who can help them succeed. You should do the same. Don’t try to do everything yourself; it’s an excellent way to get frustrated and fail.
Make sure you have a good team of real estate agents, property managers, brokers and lenders, insurance experts, and legal authorities when you’re renting out property. Surround yourself with experts so you know exactly who to contact for help and support.
Treating your former home like a business is essential for its success and profitability. This requires adopting a business mindset, creating and adhering to standard procedures, maintaining your property properly, collecting rent consistently, and seeking professional help when necessary. By taking these steps, you improve your chances of realizing your rental property’s full potential. As a landlord, you have the chance to invest in a profitable asset. Treat it like a business and watch your investments grow.
We’re here to help. Please contact us at The Equity Group for all of your Visalia property management needs.
