How to Make Your Investment Property Pay Off This Spring
Make extra income when you rent out your investment property for spring break.
It’s nearing the end of winter and cabin fever is widespread among the U.S. The good news is that spring break is coming, which means trips to warm weather destinations for many Americans. Now is the time to put your investment property online and rent it out to spring breakers. From college students to families, those looking to get away for a week are no longer just looking at hotel rooms—they’re interested in renting a private home. Treehouses, beach houses, and cabins in the woods—no matter how rustic, eccentric, or luxurious your investment property is, there is a spring breaker who may be willing to pay you to vacation at your place. Check out these six tips for renting out your investment property and see how you could turn a profit this spring.
1. Use a legal lease
Anytime someone is paying you to stay in your house, it’s a good idea to have a written agreement, like a lease. Although documentation seems super formal, it’s necessary to protect you and your property in the event of a problem. Laws regarding temporary tenants can vary depending on where your property is located, so start at the city or state level when drafting a lease for your vacationers. In the lease, you’ll want to include things like the duration of their stay, how much the tenant is agreeing to pay you, and obligations for both parties in the event of an issue, like property damage.
2. Choose your tenants wisely
To help you avoid problematic tenants, conduct interviews with your applicants. As you’re drafting your lease, think about including a References section where applicants can write down the contact information of their previous landlords or roommates. Contacting those references can give you helpful insight as to how the tenant took care of previous rentals. This is where your lease comes in handy. In addition to detailing the terms and conditions of their stay, it can weed out the potentially destructive tenants who don’t want to bother with a lease.
3. Personally inspect the property before you rent it out
Like any apartment complex when you first move in, the landlord or management will ask you to inspect the premises and write down all the problems you find. This tedious inspection actually protects you from being held liable for damages made by the previous tenant. In the same way, you should personally inspect your investment property before (and after) each visitor’s stay. That way, if you find any damage, you’ll know who is responsible and can contact them to discuss how you will negotiate the terms of repair.
4. Install working smoke alarms and fire extinguishers
Emergency-only items like these are often the last things we think about. Bump these up on your priority list and test the smoke alarms and fire extinguishers in your investment property regularly to ensure that you’re keeping your tenants safe—and legally protecting yourself in the event of a fire during their stay.
5. Keep a maintenance checklist
Even if you’re the only one who’s managing your investment property, it’s easy to forget when was the last time you inspected the chimney or replaced the HVAC air filters. In that case, log your maintenance on items such as furnace maintenance, sprinkler system inspection, septic pumping, etc. Be sure to mark the date and keep recurring items on a schedule with labels like biweekly, monthly, and annually. You should also note the date in your maintenance log for non-recurring maintenance too, like a visit from the plumber or a roof repair. Not only will this practice keep you organized and protect you from legal battles with your tenants, but it will give insurance companies no reason to refuse your claims on the grounds of negligence, should it come to that.
6. Advise tenants of safety concerns up front
Right from the start, your tenants should know about any safety concerns that could affect them. An example of this kind of safety concern could be your onsite septic system and the plumbing issues they may experience if certain items are flushed. You may even want to advise them during the application and screening process and include the warning in your lease. Although this information could deter some potential candidates from staying at your place on their vacation, it’s better to provide full disclosure and avoid a lawsuit.
With spring break season upon us, you could turn a pretty profit on your investment property when you rent it out to vacationers. Apply these six tips for maximum profit and minimum risk!