Investing in real estate is an attractive money move because it provides benefits such as recurring rental income, tax benefits, and an opportunity to build equity in an asset that’s appreciating in value. You’ll also enjoy a pretty reliable hedge against inflation.
You invested in a rental property because you understand the benefits.
So, what do you do now that you’ve closed the deal?
Before you can market your home, move in some tenants, and start collecting rent, you need to make sure you’re taking care of some logistical steps along the way to a successful rental experience.
Here are some of the first steps you need to take once you’ve bought an investment property.
Protect Yourself with Insurance
Landlord insurance is important once you’ve purchased an investment property and you’re planning to rent it out. A traditional homeowner’s insurance policy will not cover a rental, so you’ll need landlord insurance to protect you and your investment.
Some of the most important protections you’ll want to consider when choosing a policy are:
- Structural coverage. Make sure you’ll be able to make any necessary repairs and replacements if there’s a covered loss that damages all or part of your property.
- Liability. Landlords take on a lot of liability, and you’ll need enough coverage to protect you against the possibility of a lawsuit or a claim.
- Loss of rent. You want to make sure you’re covered if your property is somehow uninhabitable and your tenants cannot live there while repairs are being made.
Talk to an insurance agent about what you need to ensure you have full coverage. Las Vegas property managers can often make a referral if you don’t have an agent you’re already working with. Keep in mind that your landlord policy will not cover any of your future tenant’s personal belongings. Requiring renter’s insurance is also a good idea.
Understand the Rental Laws and Requirements
You will need to understand the legal requirements of landlords in Nevada before you rent out your home. When you work with a Las Vegas property management company, they need to have a real estate broker’s license since property management is considered a real estate activity.
If you’re self-managing your own property, you do not need a license unless you’re renting out a home in the short term. All short-term residential rentals must obtain a business license prior to operating.
Once you own an investment property and you prepare to rent it out, take some time to educate yourself on:
- Fair housing laws
- Eviction laws
- Security deposit requirements and regulations
- Habitability standards
- Required disclosures and language in your lease agreement
Making an unintentional legal mistake is easier than you think. Stay up to date on the laws, or lean on a property manager who can help you stay in compliance.
Prepare Your Investment Property for the Rental Market
Ideally, you invested in a property that’s already in good condition. If there are any issues, you’ll want to make repairs before you list the home on the market. Many of these issues will likely seem minor. Loose knobs on cabinets and closet doors that stick don’t seem very urgent. But, your tenants want to move into a home that’s ready for them. Property condition matters.
Make sure that everything is working perfectly. You don’t want to spend the first few weeks of a tenancy responding to multiple maintenance requests because you didn’t fix these things before your residents moved in.
It’s also important to think beyond maintenance.
While your home is hopefully in excellent condition, there are always cosmetic upgrades and updates that will benefit a rental property. Property condition influences rental value and vacancy. Tenants care about living in a home that’s attractive and modern. So once you’ve invested in a rental property and you’re preparing for everything that comes next, think about where you can make some minor updates and improvements.
Making these upgrades can be cost-effective. As long as the home is well-maintained, you don’t have to worry about a total kitchen renovation or a complete rehab. Instead, look for small ways to make your rental home stand out. You’ll increase your rental value and your property value.
Some of the best types of upgrades that we always recommend include:
- Flooring. Get rid of old carpet. Maybe get rid of carpet altogether and consider installing hard surface floors. They don’t have to be expensive hardwoods. Tenants will love them because they’re easier to clean and maintain. There are fewer allergens, odors, and dirt to worry about living in the carpet fibers. You’ll have an easier time during turnovers. And, they look better. You can earn more rent with hard floors versus carpet.
- Lighting. Bright lights are especially essential in the kitchens and bathrooms. Inspect your outdoor lights too, because those are important for tenant safety and security.
- Fixtures. Those knobs on the cupboards and the drawer pulls and even the faucets can get an easy upgrade that isn’t too expensive. They’ll look shiny, modern, and attractive.
- Landscaping. Pay attention to your curb appeal. The first impression you create will impact how quickly you attract tenants and how much they’re willing to pay to live in your property.
Once you know your property is well-maintained and modern, you can confidently list it on the rental market and attract some of the best tenants looking for local rental homes.
Pricing Your Property for the Las Vegas Rental Market
What you need more than anything, when pricing your rental home, is good data. Make sure you have reliable information on what similar homes are renting for in your neighborhood. It doesn’t matter how much you want to earn. It doesn’t matter how much you need to earn. The rental prices are driven by the market, the demand, and the competing properties.
Here are your most important considerations when you’re pricing your Las Vegas property:
- Rental Markets are Always Changing
Study the market. Rents have been rising steadily over the last couple of years, and that’s good news when you’ve invested in a property. However, you don’t want to overprice your property. You still need to follow the rental market. Study the competing properties that are also on the market. Compare your home to those.
When there are a lot of homes similar to yours available for rent, you’ll have to be more competitive with your price. When the market is tight, however, and rental homes are hard to find, you can raise your price a little bit.
- Location Always Drives Price
Location is just as important in the rental market as it is in the sales market. Tenants are going to pay more for a home that’s close to restaurants, shopping, and schools. In a market like ours, they’ll want walkability and access to public transportation. When evaluating how much you can charge for your rental property, always consider location.
- Study Results and Be Flexible
If you’re not getting much of a response to your listing, it may be that your price is too high. If you’re getting plenty of requests for showings but no applications, the problem could be that potential tenants decide that your home is not worth what you’re asking for in rent.
Be willing to adjust your asking price based on the feedback you get from people who see your home.
You can look at online rental sites for an idea of what homes like yours are renting for. A better idea is to talk with a property manager in the local area, who can give you data that’s more precise and evaluate your home to establish the right price.
Las Vegas Property Management Support
One of your immediate next steps after investing in a property is to partner with a property manager.
In fact, we always recommend talking to a property manager before you buy an investment property. We can help you understand what kind of rents you’re likely to pull in and how eager tenants will be to rent the home you’re considering.
If you didn’t get a chance to do that, make sure you partner with a good property manager as soon as you can. As a new investor, you’ll really benefit from resources and expertise that a property manager can provide. Here’s why you need to get in touch with a management company as soon as you buy your property (if not before):
- You can leverage a great network of vendors and contractors without screening and hiring them yourself.
- You’ll have the expertise and knowledge you need when it comes to pricing, marketing, tenant screening, and preventative repairs.
- You’re better protected from the risk and liability that comes with renting out property.
- You’ll have less work to manage yourself and more time to do what you love.
- You’re likely to earn more and spend less on your investment.
Good property management is a huge value to new and experienced investors in and around Las Vegas, Nevada. When you’re ready to find a property management partner, we hope you’ll consider our team. We have experience working with new investors as well as seasoned property owners who are successfully growing their portfolios.
Please contact us at New West Property Management. Our team expertly manages residential rental homes in Las Vegas and throughout Clark County, including Henderson and North Las Vegas.
