Getting a rental property ready for business takes a lot of work. In addition to the physical aspects of the preparations, you also have to take care of administrative paperwork for legal compliance. A comprehensive checklist for reference can ensure you don't miss a step. Look no further, our team at Wave Property Management has you covered with that very checklist below!
Securing Emergency Funds and Insurance
As a real estate investor, it's important to prioritize the stability of your financial situation, especially since rental income can fluctuate. Remember, managing negative cash flow is crucial, as it helps ensure you can comfortably make your mortgage payments and cover all your important bills.
Insurance, on the other hand, can help you mitigate unexpected expenses. Some of the types you can acquire are landlord insurance and homeowner's insurance. While you can assess which is best for your own property, it’s better to consult with an insurance agent about what fits your rental home.
Landlord Insurance Policy
This type of property insurance is designed for owners who rent out to tenants and do not live on the premises. It covers the building and other structures on the property. Depending on the policy, it can also provide liability coverage for medical and legal costs and "loss of rent" coverage.
Homeowner's Insurance Policy
The insurance is designed for landlords who also live in the rental property. It covers the building itself, as well as legal and medical liability. While the former may cover loss of rent, homeowner's insurance can cover "loss of use," which helps with living expenses when the home becomes uninhabitable.
Property Maintenance and Repairs
If you purchased an old property, you likely have some maintenance issues to address to keep it in the best condition. Fix malfunctioning items like broken light fixtures, leaky faucets, and running toilets, and make sure your locks work to avoid safety concerns.
You should also check all crucial systems, such as HVAC, electrical, and plumbing. Assess potential structural issues for older buildings, such as cracks in the walls or foundation problems. This will not only help with property appreciation but also give you an edge in the rental market.
Deep Cleaning
Thoroughly clean the entire property to prepare it for potential renters and open houses. Go through each room and clean furnishings like couches, tables, chairs, mattresses, bed frames, and appliances. Pay attention to areas more prone to dirt and grime, like kitchens and bathrooms.
Let’s not forget about those often-missed spots like baseboards, light fixtures, and those tricky corners! It’s a great idea to have these areas checked and cleaned. A professional cleaner can handle this for you and will come equipped with all the right tools, including pressure washers for your walkways and wet-dry vacuums for your carpets.
Landscaping
Maintaining your outdoor space is essential for boosting your curb appeal! To keep the exterior looking its best, remember to mow the lawn, trim the bushes, and weed the gardens when necessary. Consider adding some new plants to bring a splash of color to your landscape. And let’s not overlook your walkways; they play a significant role in the overall charm of your rental property!
Research Local Landlord-Tenant Laws
Take the time to learn the local laws and regulations for rental properties in Boise. It’s also a good idea to familiarize yourself with state laws, like the Fair Housing Act, which will guide you in the tenant screening process as you search for new tenants.
Complying with these laws not only prevents legal trouble, but it is also a landlord's responsibility to treat prospective tenants fairly, from accepting their rental application to charging for property damage.
Acquiring Necessary Permits and Licenses
It's a great idea to check with the city about the requirements that come with property ownership. Ensure you gather all the essential licenses and permits for your investment property. If you're a first-time landlord, it’s completely normal to feel a bit overwhelmed by the laws and the necessary documents, but don't worry—you'll get the hang of it in no time.
On the bright side, you can always hire professionals to help. A property management company, for instance, will be knowledgeable about the necessary processes of starting a rental business.
Drafting a Lease Agreement
Before you begin screening tenants, you need to have a rental agreement template ready. This can make tenant management more manageable for you if you choose not to hire a property manager. Some of the lease terms that your lease agreement should have include:
- Monthly Rent Price
- Rent Payment Methods
- Security Deposit Charge
- Maintenance and Upkeep
- Pet Deposit (If applicable)
- Rent Payment Methods
Draft a comprehensive rental agreement to avoid disputes and make property management easier. Be clear about when they should pay rent, their responsibilities for property upkeep, and how market conditions could change your rental rates in the future.
The Next Step: Marketing and Tenant Screening
Marketing
Marketing your rental property is just as important as preparing your rental since it will draw applicants to your listing. You'll need to research the real estate market to determine what the rental demand is like and find what appeals to your target audience.
Furthermore, you must learn how to utilize online platforms for rental ads since most prospective renters choose to find listings online instead of in person. Not having an online presence leaves you at a severe disadvantage.
Tenant Screening
After getting your rental property in order, the next step would be screening potential tenants. This is crucial for your business since finding the right residents will help maintain your property and avoid issues with rental rules. Property management companies tend to use criteria such as:
- Credit Score
- Criminal History
- Rental History
- Debt-to-Income Ratio
- Employment History and Verification
- Calls to Past Landlords
Let Us Help You Build Your Business
A rental business is more than just accepting applicants and collecting rent. It can get more complex, especially if you are overseeing several tenants at once. Companies like Wave Property Management possess the expertise to allow your business to thrive and help landlords through the day-to-day and month-to-month tasks.
Learn more about what we can do for you! You can schedule a free consultation to determine whether we fit your rental business journey!
