You Bought the Property. Now What?

Wondering what to do, now that you’ve invested in a rental property?

Your first steps are going to focus on logistics and establishing a foundation from which to operate a successful rental business. Then, you’ll market the home, look for tenants, and embark on your new identity as a landlord.

As property management experts in The Piedmont Triad area, we’ve been helping property owners in Winston-Salem and beyond get themselves into the groove of preparing a property, leasing it, managing it, and keeping it well-maintained. We’re here to help, and while the information we’re about to provide is comprehensive and voluminous, nothing compares to having a conversation. Tell us about your unique property, your investment goals, and your reason for renting out a home. We’ll create a customized plan for success. 

Until we have that chat, let’s take a look at your first steps after you buy the property. 

Quick Overview: Take care of logistical and foundational needs like insurance, rekeying the property, turning on the lights, and scheduling services like lawn care and pest control. Choose a property manager if you don’t already have one. Prepare the property for the market with cleaning, repairs, and updates.  Market your rental home with a great listing and responsive showings. Screen tenants. Offer a lease agreement.

First Things First: Logistics and Operations 

Before putting the rental home on the market, a smart investor will take some time to settle into ownership. The first steps are not nearly as exciting as finding a tenant, settling on a rental price, and collecting those rental payments. But when you want to get off on the right foot and be successful, you need to have a good foundation. Here are the immediate steps to take.

Property Insurance Protecting your new investment has to be a priority. Make sure you have comprehensive property insurance. This will protect your investment against risks such as fire, theft, natural disasters, or vandalism. As a rental property owner, you will need a landlord insurance policy, which typically includes: Dwelling Coverage, which covers the physical structure of your property. Liability Coverage, which protects against injuries that might occur on your property. Loss of Rent Coverage, which helps replace rental income if your property becomes uninhabitable due to damage. Shop around for a policy that fits the value of your property and provides adequate coverage. It’s also a good idea to ask your insurer about any additional coverage you might need based on your property’s location or type, such as flood insurance if you’re in a flood zone.	Change the Locks This one might seem a bit obvious, but surprisingly a lot of new rental property owners forget that they’re holding keys that once belonged to someone else.  So, one of the first things you should do after purchasing your property is change the locks. You never know who has keys to the property, whether it’s previous tenants, contractors, or even previous owners. For peace of mind, make sure that only you (and future authorized tenants or property managers) have access. Maybe don’t even bother changing those locks.  Instead, consider upgrading to smart locks or keyless entry systems, which provide a higher level of security and make it easier to manage access for tenants. These systems allow you to change access codes remotely, which can save you time and money in the long run. Additionally, smart locks often come with features that let you track who enters and exits the property.
Set Up Landscaping Services Curb appeal is important, even in the early stages of owning a rental property. While you may not be ready to start investing in major upgrades or renovations, establishing a basic landscaping routine is crucial for property upkeep. If the property has an existing lawn or garden, make sure it’s well-maintained. If it’s neglected, you may need to hire a landscaping service to tidy up and keep things looking presentable. This is not only about aesthetics but also about avoiding potential issues like overgrown vegetation that could hide damage or attract pests. Set up a regular schedule for lawn care, including mowing, trimming, and weed control. You may also need to consider seasonal landscaping tasks like leaf removal or snow clearing in the winter. Having these things on a set schedule removes any disorganization or forgotten services on your end.	Set Up Pest Control Services Another foundational task that shouldn’t be overlooked is pest control. Even if the property seems pest-free when you first take ownership, it’s better to be proactive. Unwanted critters can cause significant damage to a property if left unchecked. Tenants won’t want to move into a home that has bugs. Arrange for an initial pest inspection from a licensed exterminator to check for termites, rodents, cockroaches, ants, or other common issues. If any infestations are detected, immediate action should be taken to mitigate the damage. Once the initial treatment is done, it’s wise to set up a regular pest control schedule, typically every few months, to prevent future issues. Not only will this help protect your property, but it can also provide a more comfortable living environment for your future tenants.
Perform a Detailed Property Inspection Before moving on to any additional work, you’ll want to ensure that your property is in good condition. If you didn’t do a thorough inspection before purchasing, now is the time. Walk through every room, inspect the plumbing, check the electrical systems, test all appliances, and look for signs of water damage or structural issues. This inspection is not just for your own peace of mind; it will also help you identify any immediate repairs that may need to be addressed before tenants move in. If you do discover any issues, prioritize the most urgent repairs, such as plumbing leaks or electrical problems, as these can pose safety hazards.	Set Up Utilities and Service Accounts If utilities aren’t already set up, you’ll need to get the basics in place: water, electricity, gas, internet, and trash collection. It’s your responsibility as the owner to ensure that these services are ready for the tenant to use, or to specify in the lease which utilities the tenant will be responsible for. In many cases, tenants will want to transfer accounts into their names upon move-in, but make sure you’ve established everything for a smooth transition. Additionally, if you’re offering any amenities like internet or cable, you may need to arrange service packages ahead of time.

Get Comfortable with Documentation

Once all these logistical tasks are in place, it’s a good idea to take comprehensive photos or videos of the property’s condition before any tenants move in. This can protect you in case of damage disputes when the tenant moves out.

Consider using a digital tool or app specifically designed for rental property documentation, which can help you keep track of repairs, inspections, and other essential maintenance records.

It’s Time to Talk about Property Management

As a new real estate investor, managing the day-to-day operations of your rental property may feel overwhelming. If you’re not experienced in property management or simply don’t have the time to devote to it, hiring an experienced property manager can be a great solution.

A professional property management company like ours at Capstone Realty Consultants will handle many of the tasks associated with running a rental, including:

• Screening tenants
• Collecting rent
• Handling maintenance requests
• Conducting property inspections
• Managing tenant disputes

When purchasing a rental property for the first time, a property management partner can be invaluable. We offer expertise and resources as well as protection and risk management. We have the property management technology you probably don’t want to invest in yourself. 

Our experience allows us to market your property effectively, reducing vacancy rates. It’s not just help we provide when you first buy the property. Over the lifespan of your investment, we provide ongoing support, adapting to market changes and handling unexpected issues. This partnership frees you from the day-to-day stresses of property management, allowing you to focus on growing your portfolio while ensuring consistent returns on your investment.

Preparing to Lease Your New Rental Home: Immediate Steps

Now that you have the property and you’re prepared to rent it out, it’s go-time. Here are the first steps you’ll take in putting it on the market and finding a good tenant. 

• Choose the Right Rental Value

One of the most important decisions you’ll make when renting out a home is determining the right rental price. Set the rent too high, and you will lose potential tenants. Set it too low, and you may not make a sufficient return on your investment. 

To determine the right rental price:

• Research Comparable Properties. Start by looking at similar properties in your neighborhood. Pay attention to factors such as square footage, number of bedrooms and bathrooms, and any special features (e.g., a pool, updated kitchen). Websites like Zillow, Rent.com, or Realtor.com can help you get a sense of current market rates.
• Consider Your Property’s Unique Features. If your home has amenities that stand out, such as modern appliances, a large backyard, or proximity to schools or public transportation, these can justify a higher rent.
• Factor in Additional Costs. Measure your rental price against your property-related expenses, such as mortgage payments, property taxes, maintenance, insurance, and property management fees (if applicable). Your rental income should ideally cover these costs and leave room for profit. This will not always be possible, depending on market factors. But, understanding the monthly costs will help you do the math that leads to understanding what you’ll earn every month, and whether it’s enough.

Seek professional help from local property managers. If you’re unsure how to price your rental property, consider consulting with us. We can provide valuable insights into the local rental market and help you set a competitive price.

• Prepare the Property for The Piedmont Triad Rental Market 

Before you list your rental home, it’s essential to prepare it for potential tenants. A well-maintained property is more attractive to renters and can help you rent it faster, and at a higher rent.

• Clean Thoroughly. Make sure the property is spotless. Hire a cleaner to attend to the carpets, wash windows, scrub bathrooms, and wipe down all surfaces. A clean home will make a lasting impression on prospective tenants.
• Complete Necessary Repairs. Take the time to fix any lingering issues in the home. This might include patching up holes in the walls, repairing leaky faucets, replacing broken light fixtures, or fixing damaged flooring. If there are any major repairs, such as a broken HVAC system or roof leaks, get those sorted out before listing the property.
• Upgrade Where Needed. While not essential, certain upgrades can make your property more appealing. Fresh paint, updated appliances, or modernized lighting can create a more attractive and comfortable environment for tenants. Implementing smart home tech or energy-efficient features will get their attention.
• Consider Curb Appeal. The exterior of your property is the first thing potential tenants will see, so make sure it looks well-maintained. Trim the lawn, clear away debris, and ensure the front entrance is inviting. A small investment in landscaping or a new front door can make a big difference.

Once you know your property will stand out in a crowded online rental marketplace, it’s time to let everyone know you have a home for rent.

• Create a Listing and Market your Property

A rental listing serves as your property’s advertisement, so it’s essential to present it in the best light possible. Write a catchy, informative title that highlights your property’s best features. In the listing description, be clear and detailed about the property’s features, including the number of bedrooms and bathrooms, square footage, amenities, and special features like a garage, backyard, or newly renovated kitchen. 

Good photos are essential. Make sure to include clear, well-lit images of each room, as well as any special features. Consider hiring a professional photographer if possible, because good photos can attract more interest and higher-quality tenants. They’re going to look at the photos before they read the description. 

Don’t forget your contact information. You’ll want to provide a clear way for potential tenants to contact you, whether that’s by phone, email, or through a rental platform.

Once your listing is live, it’s time to market your rental property. In today’s digital age, most renters start their search online, so it’s important to leverage online marketing strategies. You’ll want to list your property on all the popular rental platforms, for example. Social media can be beneficial, too. 

As attention builds, you’ll likely receive inquiries from prospective tenants. Respond to these requests promptly and professionally. Schedule showings and collect applications. 

• Screening Potential Tenants 

Tenant screening is one of the most important steps in renting out your property, and once you get to this point, you’ll feel less like a beginner and more like a landlord. If you’re working with a property manager, you can leave the screening to them. We have the automated tools and technology to screen tenants thoroughly and consistently, within the restraints of all fair housing and rental laws. 

If you’re screening on your own, make sure you understand those fair housing laws and document your screening process to show that it’s consistent and objective. 

Be detailed. Set up qualifying rental criteria. A thorough screening process can help ensure you’re selecting reliable, responsible tenants who will take care of your property and pay rent on time.

• Check credit. A credit check will help you gauge the applicant’s financial responsibility. Look for applicants with a history of paying bills on time and avoiding excessive debt.
• Do a Full Background Check. A criminal background check is essential to ensure safety and security for both you and your future tenants. Ensure you’re abiding by fair housing laws and not discriminating based on race, religion, or other protected characteristics.
• Explore Rental History. A solid rental history is a good indicator that the applicant is responsible and reliable. Speak with former landlords to confirm the applicant’s tenancy history, including any issues with late payments, property damage, or violations of the lease agreement. Look for previous evictions.
• Income Verification. The general rule of thumb is that tenants should earn at least three times the monthly rent. If their income is too low, they may struggle to make payments consistently.

Offering a Lease Agreement

Once you’ve chosen your tenant, it’s time to finalize the rental arrangement with a lease agreement. The lease serves as a legally binding document that outlines the terms and conditions of the rental.

You’ll need some help from your property management partner to ensure that your lease agreement is both compliant with the laws of North Carolina and enforceable in a court of law in North Carolina. We always caution new rental property owners against downloading any template that’s found on the internet. 

These are the most immediate steps that you’ll want to take when you’ve bought the property and you’re preparing to rent it out. We’re here to help and support. Contact us at Capstone Realty Consultants.