There is a big difference in whether your investment property is rent ready or sell ready. These are two completely different scenarios, and if you want to earn as much profit off either one as possible, it is important to know how to manage each.
Is Your Property Rent Ready?
Because a tenant does not own the property, but they are “borrowing” it from you, they tend to be much rougher on the rental. Let’s face it, a rental needs more upkeep, more maintenance and more repairs. But when it comes time to make those repairs, be careful not to invest too much money or install too high of quality – since it just won’t last.For example, it is common to need to repaint a unit after a tenant moves out. Children with crayons, pets with nails, and grubby tenants take their toll. Because this is a frequent maintenance item, it does not make sense to splurge on high quality paint. Opt for a cheaper and lower grade quality. Trust us, the tenants won’t even notice the difference.The same can be said for carpet replacement. Tenants will move into rentals that have some pretty shabby carpeting. Just because you wouldn’t want to live there doesn’t mean that you cannot rent it out the way it is. Perhaps all it needs is a deep cleaning to fluff it back up.Working to keep maintenance costs low while providing a suitable and safe rental take a little planning. It also requires a landlord to focus on making the property rent ready, not sales ready.
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How to Get Your Rental Sales Ready?
Now, on the other hand, buyers are much pickier than tenants. Dirty worn carpet, dingy walls and a dated kitchen are big turn offs. Not only will it be hard to get a good buyer but the sales price will be lower as well.
Just because you can rent a unit for market rates does not mean that a rental property is sales ready. If an investor wants to get the highest sales price as possible, then opt for higher quality updates right before you decide to list it. Spend a little extra for a mid-grade satin sheen paint. Replace the carpet with a higher quality or better yet opt for laminate, luxury vinyl or wood flooring. All of this will make the home look like new and fetch a higher price.
If You Plan to Sell Within Two Years
If you are planning on selling your investment property within the next two years, please inform your property manager. They will care for the unit differently as they work with you to get your rental sales ready.
In order to save money which can be put towards getting the rental home sales ready in the future, we may opt to wash the walls rather than spend the money to repaint. We may suggest that the owner take a little less rent rather than replace the carpeting. Putting off these bigger ticket repair/maintenance items until it is time to make the property sale ready will be a better use of the owner’s funds and open the door for a higher sales price in the near future.
So, keep in communication with your property manager. Educate them on your portfolio goals and timing. They will help make sure your property is either rent ready or sales ready – because it cannot be both at the same time.