3 Tips for First Time Landlord Renting Out 1st Home (& Moving to 2nd Property)
Your second property is ready for your family to move in anytime soon. At this point, you are thinking if you should leave some furniture behind in your first property for your future tenants or whether to renovate the place. Below are 3 tips for first time landlord
Table of Content
- Remove What You Need
- Don’t Attempt Major Renovations
- Taxes & Expenses
📌1. Remove What You Need
- I have seen couples fretting over whether they should leave behind the sofa or beds for their future tenants.
- My advice is: Remove whatever you like to your second property.
- As long as the items are in working conditions, then it is ok to leave them behind if you do not need them in your new home.
- At this point, we are not sure whether the tenants want a fully furnished or unfurnished unit
- However, do discard the old mouldy furniture or unsightly appliances that are expected to break down anytime soon.
- The overall impression of your home will affect your take-up speed and rental offers.
- Unlike selling a property, rental is all about speed.
- Every day your unit is left empty without a tenant is income loss to you
📌2. Renovations, Repairs & Tenant’s Requests
- Do not attempt major renovations unless the place is very run down.
- Your tenants may not like what is done to the house.
- However, it will be good to conduct minor repairs, like oiling the squeaky window hinges and changing the faulty bulbs.
- Different tenants will have different requirements.
- I will generally categorize their needs into: General and Specific-to-Tenants.
- General items include: Beds, Sofa, Tables which are essential for living.
- These are usually fair requests and your next tenants after this tenancy may also need them.
- Specific-to-Tenants items are: Dish Washer, window grills for children safety.
- These items may become a storage problem for you if your next tenants do not want them.
- I will propose tenants to install these items at their own cost with Landlord’s permission and they will have to re-instate them when the tenancy ends
📌3. Tax & Expenses
- For first time landlords, note that rental income is taxable & property tax rates are higher than owner-occupied properties.
- You can refer to iras website for details.
- If you have engaged a property agent, the standard commission rate is 0.5 month rental for a 1-year lease and 1 month rental for a 2-year lease.
- Remember that Wear-and-Tear Repairs or replacement of faulty appliances are inevitable during the lease period.
- Set aside a portion of your monthly rental income for such repair costs, so you will not feel the pain when it is time to repair or replace the faulty appliances
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