If you have been shopping around on websites such as DDProperty in search of the perfect house for your new potential business, you must take into account several factors that go into choosing a good candidate for leasing out to tenants. If you do not educate yourself on these matters, you might end up with unruly tenants, unattractive structures, or, worse, a negative balance in your bank account. In this article, we will talk about some of the important steps you should take in order to ensure that you do not wind up with a house that you cannot lease out in good faith, much less live in for yourself.
Do Not Ever Skimp on Home Inspections
While many homes look beautiful on the outside, do not allow yourself to be fooled by any gorgeous façade. What the seller may not be telling you is that there could be all sorts of damages hidden in several parts of the structure, such as broken electrical wiring, termite infestations, moss in certain areas that are hard to see and reach, as well as any cracks within the walls that could lead to a full-blown structural collapse.
While they may cost quite a bit of money upfront, you should definitely look into hiring a professional home inspector so that he or she can check every nook and cranny of the property for you. Again, do not let the initial cost of the inspection frighten you into not having one conducted at all. If anything were to happen to the house or the tenants within it, you would find yourself with potentially thousands if not millions of dollars to pay in legal fees. That is why you should do yourself a favor and consider the payment for an inspection as an investment. The sooner you can identify any minor issues; the less damage you will have to deal with in the future.
Consider How Much It Will Cost to Fix Everything
After you have had a professional take a good look at the property and take note of all the things that need to be fixed, you will have to sit down and make a tally of all the expenses you would have to take out of your own pocket. You might also find yourself itching to upgrade certain aspects of your home since some parts may need repair anyway, but these home improvements may wind up costing you thousands of dollars than if you stuck to what you already have, according to an article by Angela Colley on Money Crashers.
First of all, consider how much the materials you will need will cost you, as well as how much you would need to pay skilled builders to create the structures you want or repair whatever has been damaged. Then, think about how long each upgrade would last during the span of time that you plan to lease the house out for. Given all of that, do you think you will really need to install these things so that your tenants can have the maximum comfort that you think they want to have? While things such as properly functioning heaters and coolers are definitely a plus, aesthetic upgrades such as fancy lights and expensive wall paper do not necessarily hook most renters into sealing the deal with you.
Do Not Do Everything Yourself
While you may be tempted to do everything yourself or ask your friends and family to help you do everything, this may not exactly be the best choice, especially if you have little to no experience with house construction. If any part of the house were made with even the slightest margin of error, you could find yourself in an accident related to structural collapse that you could have avoided by simply investing in the people who have the experience and the skills to pull off the task.
In fact, you may want to consider how much effort you want to put into home improvements, considering the surprising amounts of damage some renters can make, according to an article by Holly Johnson on The Simple Dollar. While you should be able to avoid this type of situation by properly screening your applicants, you may still end up having spent thousands of dollars on repairs and upgrades only to find them ruined within one month of your new tenant moving in.
While we have outlined as much as possible in this article, there are still many more factors to consider whenever you are thinking about purchasing a property to lease out. Take the time to sit back and really think about what matters the most to you before making such a major decision. As long as you make an educated choice, you should be able to avoid most of the pitfalls many first-time potential landlords make.