Hi everybody. I saved and planned to get into real estate investing for several years as a I watched the boom come and go. I’m glad I waiting and a few months ago I bought my first investment property. I’m pretty excited and I’ve been spending my weekends fixing it up, but had a few questions as I start to turn my attention to getting renters into it.
1.) The property has a lawn that I have to figure out what do with since summer is around the corner. I don’t want to let the lawn die since it would look trashy, kill the curb appeal, and make the neighbors not like me. So, do I get a sprinkler system installed or is there a cheaper way? Also, when the tenants are there, I’ll probably want get a lawn service to maintain it and bill the tenants for it, but what if the tenant says they’ll do it? What are some good (and bad) approaches to tenants and lawn care?
2.) When I get renters, should I have them put utilities in their name or should I get the bill and ask them to pay it with their monthly rent. I don’t want to get into a situation where something like electricity gets turned off because a tenant didn’t pay and then I can’t get it turned back on until they do. How do you do it with your properties and what has worked best?
3.) As I fix this place up, I can’t help but wonder if anybody has some tips and tricks for making an investment property renter-proof. I realize that renters will trash the place every so often, but is there ways to minimize the damage? hardwood floors versus carpet? types of paint? etc.
If there are other posts, websites or books that cover these topics, please just point me in their direction. I looked, but probably just didn’t think of the right search terms to use.
Renter proofing=THOROUGHLY screen your tenants, don’t rent to people that would trash your place. A silly trick I use is while the prospective tenant is looking at the apt, make an excuse to run out to your vehicle and take a peek at their vehicle. If the inside of their car is trashed, its probably a reflection on how they take care of their stuff. Just a thought.
Materials-make sure they’re cost effective! Again, don’t rent to people that will trash your place, and just to be safe, generally stick to cheap building materials-I like to use just below bottom end, because after all you still want to make the place attractive for people to live in. But everyones got their own strategy they use.
Flooring-depends whats in there now, if theres hardwood thats in good shape, refinish it and leave it, it adds cosmetic appeal. If not, throw in some cheap berber carpet in living room/bedrooms, stick to vinyl in bathrooms and kitchens, unless theres something nicer there already. Make sure whatever you do is easily replaceable, even if tenants dont mean to trash your building, accidents do happen. good luck.
Welcome to the board. Congrats on your first purchase.
Lawn sprinkler systems are an unnecessary cost. If you’re that concerned about the lot, buy a $7 sprinkler for a hose and water the yard yourself from time to time until you get someone in there. Don’t worry about paying for lawn care. It should be written in your lease that the resident is responsible for keeping the lawn cut.
All utilities should be in the resident’s name. If your resident gets electric service in their name, doesn’t pay the bill, and the service gets shut off - that’s their problem (unless you reside in a “blue” state with stupid laws). Sometimes you can get put on a landlord program with your local utility providers. For our apartments, we have a program for the electric. When someone moves out, the service stays on and reverts back to our name. This allows us to have the lights on when we show it to potential renters and we don’t have to pay a hook-up fee to have electric if we need to get in there and do some work.
Proper tenant screening should help reduce damage to your place. Check people out so you can keep people out who have previously been evicted, been busted for destroying property, etc. Outside of that, if a place has wood floors that are in decent shape - use them. Don’t carpet over them. The hardwood floors will be virtually indestructable compared to carpet you’ll have to replace. For carpet, consider using commercial grade carpet. It’s generally cheaper than other grades. I like using composite tile in the kitchen/bath/utility rooms. You can cut it with a utility knife and it stays down well when you use the primer base under it. Don’t buy the 40 cent peel and stick tiles. They’ll come up in no time. I use decent quality paint. The few bucks you think you save for cheaper stuff will come back and bite you in needing more of it for coverage and also time lost to paint extra coats.
Don’t over-improve your property. It’s ok to be proud of it, but don’t put a bunch of high-dollar stuff in if you’re not going to see the return. Do a little searching around on here and you’ll see plenty of tips from people. Take notes for easy reference later.
You need to be VERY CAREFUL with this type of electical (or gas) program. Professional (scumbag) tenants will simply have the electric turned off and you’ll be stuck with the bill (for at least the time it takes to evict them). In more socialist areas of the country, you may not even be able to evict them for doing so. Another problem is that if the tenant doesn’t pay their bill, the utility company may switch the utility into your name instead of shutting it off. That happened to one of my friends and cost her several hundred dollars.
As for paint, I use Walmart paint in all my rentals. I have used just about every brand and “quality” of paint, and I call tell you that Walmart’s paint is at least as good as the expensive paints and costs a LOT less.
If the rental has wood floors that are in good shape, use them as-is. If it has wood floors that look bad, paint them with a high-gloss oil based floor paint.
Most importantly, as Justin said, DO NOT OVER-REHAB a rental. This business is about money, not about pride of ownership. Sprinklers for a rental??? NOT A CHANCE!
jgalt,
You’re right. It’s with our local electric company. There is also a program like that in our other market, but they wouldn’t put our properties on there without a $1000 blanket deposit because we don’t have them as a utility service for our personal residence. It’s not my fault our residence is outside of their coverage area. Oh well.
We haven’t had any bad experiences with the program thus far so I can’t speak to any problems like Mike said. Our residents so far have been good. The program sends me emails when the service changes to/from our name.