Regardless of whether you got a fantastic deal on a property or anticipated a large flow of cash from it, your Return on Investment (ROI) is directly proportional to the quality of your tenants. You should find success as long as the tenants pay their rent on time, take care of the property, and continue renting from you for many years.
But it’s essential to remember that the quality of the renters you attract is directly proportional to the quality of the property you buy.
With that in mind, here are some top features a rental property owner needs to consider to attract the best tenants possible.
Like it or not, the rent being asked for a rental property will likely be the first thing a tenant will look at. Even tenants with steady, good-paying jobs will factor in renting costs. The challenge for rental property owners is determining a rent that meets their needs and balancing that with what their target tenants would be willing to pay. Make the rent too high, and you limit your pool of quality tenants. Make a rent too low, and you may attract too many offers and potential problem tenants.
The 2% rule of thumb is one general principle to follow regarding profitability. It claims you are more likely to produce positive cash flow if your rent is 2% of the purchase price. However, the market determines rental rates, so you’ll need to do your homework to find out what you can rent for in the area.
To help land on a number, compare what you’re charging with similar properties in your area that have the type of tenants you want to attract.
The more work tenants have to put into a new rental, the more they might hesitate before signing that lease. If tenants need to take care of things like painting, cleaning, and seeing to repairs, they may hesitate because of the extra work. And they may feel you don’t share the same level they do about keeping a well-maintained rental property.
Make sure your rental property is as ready as possible upon viewing. It should be clear that, should they wish, tenants could move in the next day with confidence.
This is related to move-in readiness. If tenants have to purchase their own appliances when renting your property, that’s more expense being piled on them. Tenants will be much more impressed if appliances are already in place—especially new, energy-saving appliances that will help keep utility costs down. They will also likely pay a little more for a property with appliances in place.
Ideally, your rental property is in a nice neighborhood. This is one with a low crime rate and reasonable access to shopping, recreation, dining, and public transportation. A community’s quality appreciates significantly when it’s also near amenities such as public parks, nature trails, playgrounds, sports fields, and libraries.
All these add up in a potential renter’s mind as benefits to renting your property.
No one enjoys commuting—particularly in an area with a lot of snow or rain. The more convenient it is to reach a commercial or industrial hub, the more a property appeals to a potential renter. Access to quality schools is also a significant plus if there are children (or will be children).
Ideally, your property should be near both places of employment and good schools, but even just one is better than none.
While old houses can have a lot of charm, they also come with things like ancient plumbing, old wiring, and inefficient HVAC. These systems tend to break down more than new ones, leading to unwelcome inconveniences for you and the tenant. When tenants see an antiquated property, they’re aware it could come with age-related problems, which could work against you.
Investing in upgrades—new heating and air conditioning, updated plumbing, and modern wiring—greatly instills confidence with a potential renter. Add to that granite counters, modern appliances, full baths, and maybe even a bidet, and tenants won’t mind paying a bit extra.
Tenants want to feel secure. The safer you can make your property seem, the better. This means good lighting in parking areas and entrances, modern locks, and possibly security video options. Consider security-gated access to parking areas depending on the size of your rental property.
Safety considerations should start before you invest in a property to begin with. Study crime statistics in the area you’re considering and avoid investing in properties where crime is a problem.
You want to attract the best tenants to keep your rental properties profitable. To do that, you need to offer the features they want. Doing so will mean greater occupancy, less aggravation with problem tenants, and more dependable rental income.
If you need help managing your rental property, be sure to give the Henderson Properties team a call at 704.535.1122.