Chapter One

CHAPTER ONE

ALL HOMES SHOULD HAVE THESE FEATURES:

1. MINIMUM OF 3 BEDROOMS

Less than three bedrooms is good only for apartments. There are many advantages to having a third bedroom: Larger families need this space, use for storage, as a bonus room, or use as an office. Many more people are working from home than ever before. This extra room is the reason apartment dwellers move to a home – more space, storage, and added privacy.

2. MINIMUM OF 2 BATHROOMS

Even single couples like having their own bathrooms. Only one bathroom for a cheaper rental is probably okay. However, remember to think “EXIT” when buying.

See EXIT STRATEGIES in Chapter 10.

3. A GARAGE

All garages should have an automatic door opener. Single women arriving home from work in wintertime feel more secure and, face it, everyone hates getting wet in the rain while opening a garage door.

4. STUCCO, BRICK, OR OTHER EXTERIOR SURFACE DEPENDING ON CLIMATE

Wood is very attractive, but is high maintenance. In Atlanta , Georgia , homeowners encountered issues with a certain type of stucco that was not conducive to the humid weather. There are many different siding products available that are low in maintenance.

5. LOCATED WITH SIMILAR PROPERTIES IN A NEIGHBORHOOD

Your house should be located among comparables.

SIDEBAR

Don’t over-improve a property to later flip or rent. We can all renovate a house and have it come out looking like the Taj Mahal, but that will not put the most profit in your pocket. However, you shouldn’t cut corners or hide defects in a house. Avoid allowing the house to look like a rental, or the neighbors may turn on you.

It is best to establish a relationship with the neighbors. Most caring tenants don’t want to rent a house that looks like a rental. At the same time, if you’re renovating a $200,000 house, you do not want to install marble floors, Corian countertops, or other expensive additions. Focus on kitchen and baths. Spend all of your extra rehab money on these rooms, because these are the rooms that will sell your house; either as a rental or residence.

Cleaning and painting can produce amazing results to change the appearance of a house. Remember, make it nice and put out a quality product, but at the same time, keep in mind that you are not going to live there. The people who buy the house are most likely going to make changes anyway.

Some rehab ideas being done are tile floors or simulated wood floors avoiding carpet in high traffic areas. Renters as a rule don’t maintain carpet the way they should. It costs more up front, but is cheaper in the long run avoiding replacement more often than normal carpet life.

REMEMBER THIS RULE:

IMPROVE A HOUSE TO THE STANDARDS OF THE NEIGHBORING HOUSES. DON’T OVER-IMPROVE AS YOUR VALUE WILL BE INFLUENCED MORE BY THE NEIGHBORS’ HOME VALUES THAN YOUR IMPROVEMENTS.

6. A GREAT ROOM OR LIVING ROOM AND FAMILY ROOM/DEN

Having only a living room is probably okay for a cheaper rental.

7. LAUNDRY ROOM AND STORAGE AREAS (closets)

8. A MINIMUM OR 1200 SQ FT for a rental - 1500 SQ FT WOULD BE BETTER FOR A RESIDENCE – AVOID ANYTHING 1000 FT OR LESS FOR A RENTAL ( IF A THREE BEDROOM); OTHERWISE THE BEDROOMS BECOME THE SIZE OF CLOSETS. Your focus should be in the medium price range –avoid low end properties and high end properties for both rentals and entry level residences.

9. TILE ROOFS

For a residence and rentals tile roofs are preferable; however a composition roof is okay for a rental. Avoid wood shake roofs – these have to be replaced and the process is expensive.

10. OUTDOOR SPACE SHOULD INCLUDE PATIO/DECK OR BBQ AREA AND SOME LANDSCAPING

SIDEBAR

Avoid wood decks. (High Maintenance) There are simulated wood products for decks; also consider brick, stone or a concrete slab.

You may be thinking, “Why all the rules?” The answer to this question is that rentals must be treated as a business. Lacking this attitude is a failing of many owners. You will be competing with hundreds of rentals. Only the best product at the best price is going to succeed. Renters think differently than buyers. They usually don’t care about granite countertops or stainless steel appliances. Their “wants” are in this order:

1. RENT AMOUNT

2. BEDROOMS

3. SQUARE FOOTAGE

4. LOCATION schools, close to work

4. SAFE NEIGHBORHOODS

5. PETS OKAY

Buyers want some of these things too, but their list of “wants” includes more high-end features and upgrades.

SEE CHAPTER FIVE – COMPETING WITH APARTMENTS

11. CLOSE TO SCHOOLS AND PARKS

However, not next to them because parks at night may attract illegal activity. Read about Schools in Chapter Two paragraph 5.

12. SINGLE STORY

Should consider single story as older people don't like climbing stairs.

13. RV- BOAT PARKING

Not absolutely necessary, but adds additional prospects for those that have these vehicles.

14. SPRINKLER SYSTEM

Consider a sprinkler system. Don't depend on tenants to water the lawn and especially during vacancies. The yard goes to seed if not maintained. This is a critical time to maintain the landscaping to attract rental prospects.