Whew! Who knew that owning rental properties, often spoken of as the holy grail of passive income, could be so much work? OK… so I did know it’d be a lot of work up front, but it is taking a bit longer than I had initially expected. Why? I wanted to do everything myself in the beginning to learn the ropes.
Admittedly, doing everything myself the first time around is going to cost me some time (and therefore money) but it will also save me a little bit of money in hiring labor, paying a rental management company and other random expenses I could incur. Unfortunately, the time factor means I have to make the mortgage payments every time the first of the month rolls around.
Things to Keep In Mind When Converting Your Home to a Rental Property
With all of the items below, we made sure to keep a very important factor in mind. Our home will no longer be our home, but a property that someone else is renting for us. Things don’t have to be perfect and all items that aren’t safety related should be approached from a cost/benefit perspective.
If changing a light fixture in a bathroom would make it look awesome, but wouldn’t be a major upgrade from your current one, what’s the point? If it won’t generate additional revenue or help you rent out your place faster, you might be better off leaving it alone!
With that in mind, here is a list of what we’re doing to prepare our townhouse to rent out. Some items were necessary due to the current condition of the item (our yard was a train wreck), while other were just plain ugly and would scare any normal person away (seafoam green bathrooms). Other items were deferred maintenance items that should had been done long ago, but we never got around to them.
How We’re Preparing Our Townhouse
When we moved out of the townhouse we had already lined up a tenant and life was good. Then things fell through. Now we’re realizing we should have started moving a bit faster after we moved out because we had a long list of things we wanted to do before we rented out the property. So what was on that list?
The Laundry List of Tasks
We’re replacing the carpet in the townhouse because when we initially bought it and lived in it we knew it needed to be done. There were big stains in a bunch of places and the carpet was well past its useful life. We’re paying someone to install the carpet and we’re hoping that it can be done next weekend. We didn’t want to use carpet, but due to the close location to the beach, we didn’t have many other options for the second floor bedrooms.
We’re fixing a small roof leak that was caused by rotted vent pipe flashing. Turns out the Florida sun isn’t all fun after all. We’ve got a patch kit and will be installing it next weekend as well. After the roof is repaired, we have to get a roof condition form to satisfy our wonderful state run insurance agency.
We’re repainting the horrid sea foam green bathrooms. What makes the color even worse is our tub/shower is a mauve color and they just plain don’t mix! While we’re talking about painting, we’ve touched up all of the random scuffs and scratches with touch up paint as well.
The Yard Needed a Major Makeover!
We made sure to spray for weeds, re-mulch all of the flower beds and pressure wash some really nasty areas of our fence. We pressure washed our sidewalk and driveway too, because I don’t think anyone had every done it before and it was horrid.
We had to fix a portion of previous owners’ self-made fence and patio deck… they had no clue what they were doing when they built either one!
Oh, we’ll also have to clean everything up and get the townhouse in tip top condition to show to potential renters. We’ll have to prepare an application that is compliant with all laws, run credit and background checks, and choose our very first tenant! We’ll also have to come up with a legal lease that will protect us should things go wrong.
If you can’t tell, we have a lot on our plates! Luckily about half of the above is done already, and the rest shouldn’t be as time intensive as the items we’ve already knocked out of the way. Hopefully the townhouse will be rented out by the beginning of July, or the beginning of August at the latest.
So, does owning a rental property sound like passive income to you? Have you ever rented out a property yourself? Any tips or tricks for us before we get a tenant selected? We’re all ears as new landlords!