Get Your Denver Property Rented in 8 Steps
Renting is big business in real estate with many investors getting their start in the business by renting out their primary residence after the mortgage collapse. There are also a number of investors who turn to renting after putting a rehab property on the market, and it makes sense because a solid rental property can be an excellent addition to any real estate investment portfolio. Just putting a “for rent” sign in the front yard isn’t going to bring checks rolling in, there is a lot of work that goes into renting a Denver property and this work should be completed in the proper sequence. Below, check out eight steps to get your Denver property rented.
Research Your Local Rental Rules and Guidelines
If you are considering renting Denver property, the first thing you need to do is conduct thorough research on your area’s rental rules and guidelines. Often, there are very specific rules governing renting based upon the town the property is located in and you don’t want to invest time and money into finding tenants only to find out that you can’t rent your Denver property. Before you get too far into the rental process, you want to be sure you know what you can and can’t do with your Denver property.
Check out Market Rents
The rental market is highly contingent upon local rental prices. Once you have determined what you can and can’t do regarding renting your property, you need to take a look at every rental property on the Denver market within a five mile radius of your property. When looking at rentals, the closer the property is to yours, the more reliable of a comparison it is. Look for things like size, room count, square footage, parking and other amenities because they are most important in terms of comparison. If you’ve recently made upgrades to your Denver property, it can be tempting to price higher than comps, but it’s important to resist the urge to do so. Let the numbers guide you as to what kind of rent you can realistically expect to get.
Understand the Expenses
Every property owner is aware of monthly principal, interest, tax and insurance payments, but there are hidden expenses that can reduce your potential cash flow. Snow removal, lawn maintenance, water bills and sewer bills are some of the expenses that you might not initially consider. Additionally, you will need to decide how you plan on managing the Denver property. Hiring a property manager will certainly make your life easier, but you can expect to receive about 10 percent less in rent every month. Make sure you are aware of all the expenses before you rent your property so you can ensure a positive cash flow.
Advertise
Once you’ve run the numbers and decided to rent, you need to spend some time advertising and getting the word get out. With more rental listings than ever before, you need to spread the word as widely as possible. Social media is a great place to start and you can also use sites like Craigslist or other rental sites to list your property. The more people that know about your property, the higher your chances of finding a tenant quickly.
Schedule Showings
Just because you have an interested prospective tenant doesn’t mean you have a done deal. With every showing that you do, you want to present your property in the best light possible. Always make sure your property is spotless, clutter-free, odor-free and move-in ready when you are taking prospective tenants through.
Screening Tenants
One of the most common mistakes that new landlords make is to offer the space to the first person to show interest. While you want to find a tenant, you also want to find the right tenant, which means that you need to spend time screening interested tenants. Give each one an application, run a credit check and follow up with any references listed. Take your time to screen tenants because a bad tenant will make your life a nightmare.
Review the Lease
It takes only minutes to find a generic lease online and while this is easy and inexpensive, it can be a bad idea. You want to make sure you will be protected should any unforeseen issues come up, so it’s best to spend the money for an attorney to draft your lease. Once you are happy with the lease, sit down with your tenant to review it and be sure to point out any items of particular note, such as pet and smoking policies.
Final Walkthrough
After both you and your tenant have signed the lease and you have collected the security deposit, it’s time to take your tenant on a final walkthrough. On move-in day, meet your tenant at the property and be prepared to provide specific information about the property and hand over the keys. To protect yourself, you should also document the condition of the Denver property with photos and video to make things easier for you once the lease is over.
Even if you follow these steps to the letter, leases rarely ever occur without any problems. Remember to take things as they come and be ready for anything; plan for the best but prepare for the worst. Use these eight steps as a guide to help set you up for a successful rental experience.