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Renting out an apartment has long been an excellent way to generate a steady income. With the recent price increase and inflation, you may consider this approach.
Multiple states and regions across the US are considered landlord-friendly. One of the many that often is mentioned is Michigan.
Whether you already have a property or are planning to purchase one, renting it isn't as simple as you think. This guide outlines multiple things to consider before making that decision.
Legal Side of Renting
The first thing you should consider even before you start the renting process are the laws and regulations. Every state and city has them, and they're not the same across the US, meaning you should double-check with the local authorities about the details.
For this part of the renting process, you have two options. You can take on the task yourself, get the information, make contracts, get permissions, etc. Or, if you want to avoid the hassle, you can contact an attorney or a property manager to do everything for you. Keep in mind that there will be a fee, so make sure to consider it when calculating your budget.
Permits and contracts are one thing, and taxes are the second legal side of renting. To avoid tax evasion, it is recommended that you get acquainted with the laws. Like before, you can ask for help from a professional or do things yourself.
Preparing the Property
Renting isn't just about listing the property and waiting for people to call; you need to prepare it first. If the home is new, you probably won't have a lot of work except to ensure it's clean, safe, and everything is working. On the other hand, older homes need a bit more attention.
Michigan is full of areas with older houses, with Grand Rapids being a relatively popular place. Renting this kind of property can be profitable as older houses are becoming a popular option these days. It's essential to have it prepared and, in some cases, renovated to make it as attractive as possible.
You should consider some structural and visual aspects. Even though Michigan is not prone to hurricanes or heavy rainfalls, a healthy roof is essential to ensure it doesn't leak at the first drizzle. Plenty of roofers in Grand Rapids will examine your roof and let you know if any work is required.
On the visual side, you may need to touch up the house's exterior or the yard. The idea is to have a house that's attractive at first sight but remains functional. This also means you should check the doors and windows and ensure they work and seal well.
The interior is an equally crucial aspect that shouldn't be ignored. Depending on the home's condition, you may need to do a complete renovation, or if it's a home that's already been through the process, you may need to touch up a few things.
All of this depends on your preference and how you want to advertise the property. You can choose a modern interior with an old-style exterior or a complete retro package. Again, the budget will also play a massive role here.
Depending on what needs to be done, you may be able to take on some projects yourself. If you have the skills, this is a good way to save money. Hiring professionals to ensure a perfectly completed project is recommended for larger projects.
Set the Price
With everything prepared, it's time to consider how much you plan to charge for the property. Compared with other states, Michigan's average rent is on the lower end of the spectrum. According to statistics, tenants pay less than $900 on average per month, about half the price of states like Hawaii or the District of Columbia.
Setting the price can be tedious because there are multiple aspects to consider. The condition and size of the property are only one side of the story. You should also consider the location, amenities, and any additional features you can offer.
The best way to get a rough estimate is to research neighboring rental properties and find some similar ones. You won't find the same, but the prices you'll see should give you a rough idea.
If you're hurrying to find tenants as soon as possible, you may want to consider lowering the price a bit. Just ensure you don't increase the rent overnight once the property becomes popular. With the soaring prices in recent years, people will probably be happy to find a more affordable place, and yours might be the case.
When setting the price, you should consider whether it suits you. After all, you are renting the property for additional income. The goal is to cover the expenses of everything you invested and have something extra remaining.
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