As a property owner, you don’t have to sell your apartment after relocation. More so, if selling it at this point may not get you the right price point. Instead, you can convert your apartment into a rental property while waiting for the market to become feasible enough to sell it at the highest value.

Becoming a landlord can be a lucrative option. You can enjoy an array of benefits, from earning a regular passive income and enjoying rising appreciation rates to bountiful tax deductions.

But there is a catch – you have to do it right! In this blog, B&R Property Management will help you convert your apartment into a rental property successfully!

Hire a Property Manager

Landlording can be a stressful and time-consuming affair. You’ll need to always be ready to respond to a tenant’s inquiries, regardless of the time of day. You will also need to advertise the unit and screen prospective tenants.

Luckily for you, you can hire someone to do everything for you. A good property manager like B&R Property Management can help handle everything on your behalf, saving you the time and frustration that usually comes with dealing with a rental investment and tenants.

Get Another Mortgage

Relocating to another area may mean getting another mortgage. This is something you’ll want to do before moving out of your current apartment. Find out whether you can qualify for a second mortgage first.

Having a good credit score, significant home equity, and a good debt-to-income ratio will certainly help. Your lender may also take into account the potential income that may come with renting out your apartment.

Get a Suitable Insurance Policy

A homeowner’s insurance policy will not be able to cover your rental property. This is because such a policy is only meant to cover personal residences. Once you rent out a property, it ceases to become a personal residence and becomes an investment property. And this comes with heightened risks, which will require more protection.

To adequately protect your rental property from certain perils, you’ll need to take out a landlord’s insurance policy. This can help protect your investment from perils such as structural damages, legal fees in case of disputes, and loss of rent.

Hire a Property Inspector

You may not be able to rent out your apartment as-is. It has to meet certain standards when it comes to the state and local habitability codes. As such, have an inspector carry out a thorough inspection of the premises to determine its suitability first before listing it for rent.

The following are some of the issues that the inspection can help you unearth:

Maintenance Issues

You may be able to identify and address minor issues before they become serious and potentially costly to fix. An example is a water leak, which if left unaddressed, can grow to cause serious water damage.

Safety Hazards

As a landlord, you’ll be required to meet the minimum state- and local safety codes. The inspection can help you identify issues such as unsecured handrails, faulty wiring, or leaking gas pipes.

Legal Issues

As previously mentioned, rental properties are required under state and local laws to meet certain habitability standards. If it doesn’t, you’d be in violation if you still go ahead and rent it out.

Make Your Property Rent-Ready

After fixing the minor issues (hopefully) from the inspection, consider making some upgrades. The goal is to make sure that your property stands out from the competition by making it ‘pop’.

And since it’s an investment, make sure to go for upgrades that promise you high ROI. This is because rental upgrades aren’t created the same. Some provide a better ROI than others, and these are the ones you should aim for.

The following are some examples of high ROI upgrades:

• Renovate the kitchen – If the budget allows, replace old countertops with modern materials like granite or quartz, repaint existing cabinets, and upgrade appliances to energy-efficient ones.
• Upgrade the bathroom – You can do renos like replacing outdated shower heads, lighting fixtures, and faucets, and installing a new vanity with storage spaces.
• Swap out worn-out flooring – Go for durable and affordable options, especially in high-traffic areas like bedrooms and living rooms.

The benefits of making a rental property stand out are usually twofold. 

For one, finding and retaining tenants could become easier. And two, you could charge more rent due to increased desirability.

Determine the Rental Price

This is one of the most important decisions you’ll have to make as a landlord. Your goal should be to avoid two common rookie mistakes – overcharging or undercharging tenants.

Doing either of the two will only impact your ROI negatively. Your goal should be to find the perfect balance between the two. Ideally, hire an expert to help you make the best decision. A good property manager will help you gauge a multitude of factors necessary for proper decision-making.

Draft a Lease Agreement

Would a bank loan money to you without any contractual agreement? Of course, not! As such, avoid roadside handshake deals and require the same from your tenants.

Let them know the rules of engagement, from when and where rent is due, to repair responsibilities, to lease termination details. In other words, let them know what they can and can’t do during the contractual lease period.

Conclusion

If you’ve reached this far, now you have all the expert tips on how to convert your home into a rental property. Ultimately, your success as a landlord will depend on your skillset. But even with zero landlording skills, a property manager can help you handle everything on your behalf.

B&R Property Management can help walk the landlording journey with you! We have been providing apartment rental owners with reliable, professional, and bespoke solutions since 1981. Get in touch with us to learn more!