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Wednesday, June 15, 2011

Feel the fear -- and do it anyway!

Are you considering becoming a landlord?

Have the reduced real estate prices and the lower interest rates made you consider purchasing an investment property?

Are you thinking about upgrading your personal home and turning your current home into a rental?

Is the possibility of an additional stream of income enticing?

The ripple effect from the downturn in the economy and the subsequent turbulence in the real estate market has created a "buyer's market!"

Many homeowners are becoming first time landlords. One thing stops some of them - fear.

Will the tenants pay the rent on time? Will they take care of the property? What would happen if your can't find tenants? A thorough screening process --reference reviews and credit checks--will eliminate some of the anxiety.

For a new landlord, choosing the first tenant is an exciting experience. The completion of the initial Rental Agreement- and the beginning of the income as a landlord--is a "high-five" experience! The more difficult renting comes when you experience a turnover in tenants. At this junction, you will begin the process of preparing for new tenants, only this go around, TIME IS MONEY!

I have been an Interior Decorator for many years, a landlord in Vacaville for two decades, and a Home Stager for the last four years. Last year when a new apartment complex opened locally, the innovative owners, who were familiar with Cozy Chic Design & Home Staging, hired us to "stage" one of their units. They were delighted with the results, and told us, "Everyone who walks through the staged apartment, rents one of them!" While that was probably an exaggeration, they have kept the initial staging in place, showing it as a "sample apartment." Since then I have "staged" my own rental units to ensure only a minimal amount of time is lost in the transition between tenants. What a difference it has made in the ease of renting! As a result, we have added "Staging to Rent" as part of our menu of services.

Here are a few tips to give you confidence that you can keep your rentals full!

Beginning THE DAY notice is given (or you give notice) that the tenants will be moving:

1. Arrange a preliminary walk-through with the tenants. This will enable you to access the condition of the property. If it is apparent that there are things that will be the current tenant's responsibility to fix-- like holes in the wall:) -- the landlord can point those things out and state her/her expectations. This walk-through might also reveal items such as a leaking sink that are your responsibilities, as the landlord. Most of these repairs can be fixed prior to the tenants moving out--which, since, "time is money" will save you some bucks!

2. Create Curb Appeal. As soon as possible, before the moving date, get started on curb appeal.

Sprucing up the yard--trimming, pruning, mulching and mowing can be done ahead of time. Once you start to advertise, people will want to "drive by" to take a look at the property. What they see should entice them to want to see the interior.

3. The contract with the tenant should require that the home be left clean, but if you have any doubt that this will be done, go ahead and hire a professional cleaner for the day after the property becomes vacant. The cost for cleaning can come from the tenant's security deposit. If the tenants leave the home clean, cancel the cleaners.

4. If the interior needs to be painted, hire this to be done the day following the cleaners.

5. Stage the property the day following the cleaners (or painters)

6. Advertise the property. Set up appointments to view the property starting the day following "staging day." Once the property is staged, you will have beautiful photos to add to your advertising.

7. Pre-screen any interested applicants and send a slide show of your staged property to anyone who meets the criteria of a tenant. We provide a slide show for every property we stage. The same slide show can be used EVERY time your property becomes available.

8. Bring an application with you when you show the property. Be prepared to rent it to the first person who qualifies!

What? Stage Rental Property? It's a new concept!

Customarily homes are staged in preparation for them to be sold. Statistics say that only 10% of purchasers can visualize themselves living in a home that is presented "empty." This is also true with renters. Though the use of color, accessories and a few pieces of furniture, a well-staged home creates "emotional connections points" with the prospective buyers--or tenants. Using a vignette style of light staging is cost effective. It not only shows the home to its best advantage, but makes it friendlier. Here are a few more things to consider:

1. Staged properties rent more quickly! A rental property without tenants is losing money daily!

2. Rental staging is affordable. Priced by footage, the initial staging costs are roughly about the same as 10 days rent. If you are able to rent the property quickly, the staging is paid for by the rent that is not lost!

3. When a property is staged for the purpose of selling it, after the initial cost of staging there is a monthly fee for the use of the furniture and accessories. We advise that the home remain staged until close of escrow. Staging rental properties differs in that as soon as the deposit is given by the new tenants, we can "de-stage" the property.

4. The price of staging a rental property is tax deductible!

5. According to the National Association of Realtors, 84% of people search for homes online first before deciding to visit. Photos of beautifully staged rooms stand out among the competition. Unless the property is staged, the only photo opportunities are either with a tenant-occupied home, or an empty one.

The opportunities of the Real Estate market have never been better! If your inclination is to become a landlord--the market is ripe! Yes, it's a bit scary. When I became a first-time landlord, it helped me to remember one of my favorite success motto's

"Feel the fear-- and do it anyway!" I'm glad I did!

Want a free example of a "Staged to Rent Slide show?" Email me at janetdavison47@yahoo.com