With foreclosure inventories likely to shrink over the upcoming years – or at least level off after the recent historic climb – more and more homebuyers are feeling the urgency to snap up bargain homes and turn them into cash cows by renting them out. It makes perfect sense: Home prices and mortgage rates are at or near the lowest levels in more than a decade.
If you are looking to buy a foreclosure home and turn it into a rental, here are a few things you can do to make your newly purchased house more attractive to future tenants.
Legally Compliant
It is extremely important that your home is compliant with all legal and safety requirements before you have it rented out. If not, you could end up offering your tenant free lodging while simultaneously paying the government a hefty penalty fee. Be sure that you have the right number of smoke detectors installed and have taken other necessary precautions in case of fire and other common emergencies.
Reasonably Priced
Rental prices are always a huge factor for tenants when considering where to live. While many prefer to move into the most affordable homes they can find, there are also a good number of individuals who don’t mind paying a little more than usual if it means having a more secure and comfortable living environment to enjoy. Check rental prices in your area to make sure the price you are asking reflects both the property and local market. You can research prices on RealEstate.com by going to the “Find Homes” tab, entering your location, and selecting rentals from the drop-down menu.
House Rules
No tenant in his or her right mind would want a tyrant for a landlord. Nonetheless, most of them wouldn’t mind having to follow a number of house rules as long as they’re reasonable and explained explicitly prior to having the lease agreement signed. When coming up with a list of house rules for your foreclosed property – for example, no smoking inside – make sure they benefit you and your tenants at the same time.
Wired for Use
Whether it’s for electricity, cable television, the Internet or a phone line, it’s essential that your home is already properly configured and “wired” for immediate use. If you don’t take the time to do this, you may find prospective tenants turned off by the idea of having to wait the necessary number of days or even weeks to have utilities installed.
Safe and Secure
Even if you can’t provide 24/7 manned security for your tenants the way condominiums and gated communities can, you can still make your tenants feel safe and secure by having the best security equipment installed. CCTVs, security alarms and motion sensors are a good start. Sturdy doors and windows with multiple locks are also renter-friendly additions.
Is the Home Comfortable?
You need to consider comfort in every sense of the word. To start with, your property’s heating or air-conditioning system should be in good condition. If possible, have a HVAC technician inspect it for any signs of potential trouble. A nicely mowed yard would also make your home appear more welcoming to future tenants. And if you add chairs, tables and other garden furniture, your tenants will feel even more at home. Lastly, remember the importance of plumbing. Make sure that there are no leaking pipes, broken faucets and/or water pressure problems that could give your tenants a huge headache once they move in.
Overall, when preparing your foreclosure rental home for future tenants, just remember to focus on making it completely ready for immediate occupancy. You will have all those rooms or units leased in no time.
