Are you in the market for your first rental property? Perhaps you’ve recently purchased a second home and aren’t quite sure how to turn it into an income source. Well, you’ve come to the right place, because today’s The Property Management Coach blog touches on a few important points to assist novice property managers.
Know The Differences In Rental Types
A vacation rental is a furnished home, condo, apartment, or townhouse that is typically rented for 14 days or less. If your property is within a few miles of the beach, mountains, or a popular vacation destination, using it as a vacation rental is a smart choice. Renters expect to pay a nightly rate plus the cleaning fee, which varies from around $50-$250 or more. What you can charge depends on the size of the home, location, and amenities.
A residential rental is usually rented based on a signed agreement, which, according to Zillow, is written differently depending on which state you live in. Almost always rented empty, this type of rental puts you squarely in the “landlord” category. You’ll only have to deal with one renter/family at a time, but your earnings are typically locked in for the rental period. Your monthly rental fee is based on similar properties.
Make Changes That Matter
It doesn’t matter which type of property you choose it has to be habitable. This means, for the most part, that it’s safe and clean. However, if you want to get the most out of either rental category, you’ll want to make some improvements that attract the best tenants.
Outdoors, consider contacting a local fencing company to add a fence, which costs around $4500, depending on how many linear feet, the materials, and the type of terrain it’s being installed on. This is a pricey upgrade, so verify that your preferred contractor is licensed and comes with great reviews. Make sure that your contractor is willing to pull permits, check for easements and utilities, and provide you with a written timeline so that you can plan ahead for guests/renters.
Indoors, you can’t go wrong with an upgraded kitchen. Obviously, long-term renters will want a wonderful space to prepare meals. But, many vacationers are also interested in cooking for themselves either to save money or to maintain their healthy lifestyle. Natural stone countertops are a great addition, as they are easy to clean and maintain. Popular Mechanics explains that solid surface, engineered stones, and concrete are also great choices.
There are many differences between a short-term rental and a long-term lease. But, the process is typically the same: purchase, set a price, maintain the property, and collect rent. If you’re looking to diversify your portfolio, adding real estate is a smart move no matter which type of property you choose.
The Property Management Coach can help you create a profitable business so that you can be happy and content in your personal and professional life. Contact Kathleen today to be on your way toward property management success.
Contributing Author – Ted James is a husband, father, dog owner, and rock climber living in the Pacific Northwest who devotes a large chunk of his time helping people get back in the driver’s seat of their finances.