REALTOR® Alex Munoz’s 3 Steps to Buying a Property & Turning it Into a Profitable Rental
While many people are interested in investing in a rental property, it can be a daunting endeavor if you’ve never done it before. REALTOR® Alex Munoz shares his tips for buying a home and transforming it into a cash-flowing, profitable rental property:
1. Improve the aesthetic appeal and the maintenance potential of the property.
The first thing Alex does with any property is to reduce the property’s maintenance, and to improve it cosmetically so it stands out: “For example, on this last project, I removed most shrubs, bushes, flowers, and any sort of yard maintenance. For each rental I always paint the exterior right away and use quality paint so it will last. A rental that requires maintenance and time only affects your pockets. Keep it simple and fix all systems so they will last. Remember time is of the essence. Holding costs begin the day you close.”
2. Prepare the property for advertising and prospecting.
All too often, Alex sees property owners take photos with their cellphone cameras that show clutter throughout the house. He recommends using a professional photographer: “I take pride in making my rentals stand out and I hire a professional photographer to take photos. Remember you can keep the same photos for every time you have to find new tenants down the road. The property gets staged before photos as well (remember to mention the unit is not rented furnished if that is not your intention).”
3. Find the right applicants.
After you’ve completed the first two steps, you’ll be ready to get your rental out there! “With those two previous steps completed you will have a rental that stands out from the rest which hopefully is bringing in the most amount of rent to the most qualified applicants. I post my rentals on www.postlets.com (Zillow owned) and do not post my phone number because of the amount of calls. Email inquiries only.”
Alex also has some great tips for the interview process, as well: “It is a first-come, first-served basis with a phone interview, after receiving their inquiry, and then a meeting at the property. The three things I pay [the most attention to are] previous rental history, job history (income), and their desire to stay at the property for a good amount of time.”
With Alex’s tips, he says that you should be able to begin receiving rent within a month of purchasing the property. “[This] will keep your costs down and [send you] well on your way to buying the next one.”