Help! I have purchased my first income property...What do I do next?

So you've just closed on an income property and you’re ready to start making some money! 

But before you list your short-term rental, YOU, the new property owner, have several things to decide and accomplish first.

In this article, I will walk you through everything you need to do to get your property/units ready for your first booking and your guests. Everything from any necessary repairs, security equipment, décor and marketing. We’ve got your covered.

1. Assessing and making necessary repairs

In short, you’ll need to make sure your property is up to current code and safe for guests. This means making sure any potential safety hazards are taken care of, such as fixing any broken stairs or railings, electrical outlets and wiring is up to code.

Ensuring that guests can operate appliances, along with gadgets they’ve brought along can be used safely ensures good reviews and continued bookings.

2. Identify the target market for your property

The #1 reason most short-term rental units aren’t profitable is the target market either hasn’t been identified or it isn’t being marketed effectively. Remember “failure to plan is to plan to fail”.

Merely wanting an income property and buying one doesn’t ensure success. However, partnering with a professional that understands the local marketplace, as well as industry-specific trends (and how to apply them to your property) is the best path to success. Also, allowing time for the marketing plan to take root and produce results is key. This isn’t a get-rich quick scheme.

3. Establish a realistic budget for the project

In my experience working with investors, the #1 reason projects either take longer coming to market or never are completed is due to: unrealistic project budgets. Disclaimer: the following may seem elementary in nature, but I’m often surprised how many investors attempt to omit certain facets of the information below and then are sidelined by unexpected costs/timelines.

The list below indicates the line items that should be considered/addressed when bringing a property to market. Each of these line items should have an amount assessed to it. All line items totaled will become your project’s estimated budget total:

· Acquisition cost of property (purchase price, closing costs, mortgage costs)

· Rehabilitation costs (contractor/labor and material costs)

· Marketing costs (short-term rental listing platforms, guest collateral, etc)

· Décor/staging (furniture & accessory sourcing, staging, inventory stocking)

· Security (keyless door locks, digital thermostat, etc.)

· Cleaning/turnover staff

Note: Keep in mind that the longer it takes to bring your units to market means more carrying costs (mortgage payments, insurance, interest).

Those carrying costs need to be included in your budget and continually updated according to the actual project completion timelines.

Written by DaMar Janssen, Owner/founder

Dwell by Designed Living LLC