In Arizona, the rental market is hotter than ever. This may be an opportune time to become a landlord. If you’re wondering how to become a landlord in Arizona, this post will illustrate this. We will explain how to boost your rent to information about landlord insurance.
Knowing how to buy a home in Arizona starts with understanding the area, the average rent, and the amenities renters are looking for. From updates to creating a budget, here’s our go-to guide on becoming a landlord.
Getting Your Financials Together
You need to have your financials in order before buying rental property in Arizona. Before you buy a rental home or multi-family property, it’s helpful to look at your income, assets, and expenses. Even if you’re buying a home with cash, you’ll likely want to plan for additional expenses such as landlord insurance, homeowner’s association fees, and taxes.
If you’re buying your rental home with a mortgage, you should gather some documents. You’ll need your income taxes from the past year, maybe even back further years. You’ll also need to verify your employment, income, and assets through pay stubs, rent from other properties, and bank statements.
Doing a little homework beforehand can help the mortgage process go smoothly. This information is also helpful when you’re setting your budget and determining your rental income.
Choosing a Location
Once you have your financials in order, it’s time to start looking for property. The location of your rental home or apartment will play a significant role in how much you can charge for rent. Being near major cities such as Phoenix or Scottsdale, for example, means you can charge a higher rent.
Do some research and enlist the help of a professional realtor to learn more about the housing markets in different areas. A realtor can help you look at the occupancy rates of nearby rentals, what the average rent is, and what the nearby amenities are.
Having a home near great schools, major intersections, and shopping districts provide tenants with conveniences they’ll be willing to pay for. Your community search will also help you determine what type of home you’re looking for.
In a more population-dense area with new multi-family buildings, you may want to purchase a building with more than one unit. In a family-friendly, residential area, a single-family home may be a better option. According to a recent study, Phoenix, Scottsdale, Tuscon, Tempe, and Prescott are the hottest markets in Arizona this year.
Setting Your Budget
Whether you’re paying for the home in cash or obtaining a mortgage, you’ll want to set some budget parameters. This will also give you an idea of what you can collect for rent. There are several different mortgage options available for landlords and homeowners with investment properties.
Keep in mind, in addition to a mortgage, you’ll also pay for landlord insurance, taxes, and community fees if you have them. With the high rental rates in the market today, your rent may cover your operating expenses.
Amenities Can Increase Your Rent
If the apartment or home you’re purchasing comes with amenities, you’ll likely be able to charge more for rent. For example, homes with a pool in Arizona have a considerable advantage.
You’ll be able to increase your rent if your apartment building includes parking, community amenities, and a gym. You may also be able to charge a separate fee for parking and pets if the building is pet-friendly.
Being near local amenities also increases your property value and therefore rent. Renters will pay more if they can get to a shopping area, restaurants, and nightlife quickly. Areas near walking and hiking trails are also great property boosters. Look for amenities you’d want as a renter. People pay a premium for luxuries.
Landlord Insurance in Arizona
If you’re renting a home in Arizona, landlord insurance is well worth the investment. Although it’s not required, landlord insurance can give you some much-needed peace of mind. Our coverage includes natural disasters, water damage, fire damage, and tenant injury.
Unfortunately, many of these expenses come unexpectedly. For example, if a water pipe bursts, this can be an expensive emergency if you aren’t insured. Destruction of property due to fire or a storm can also be costly. It’s always better to be prepared for the worst by having insurance.
Tips for Earning More Rental Income with Property Updates
A property that’s updated and fully renovated will command more rent. Not only can you charge more per month, but your property value will also increase. This will boost your overall net worth.
Before you buy your rental property, consider the condition of the home and the area around it. If your home isn’t as updated as the rest of the block, making some small updates can help boost your rent.
Not all updates need to cost thousands of dollars. There are many minor updates you can do to attract more renters and increase your rental income. To start, consider giving everything a fresh coat of paint. New flooring in a durable material like a vinyl plank will give your home an updated look and a floor that can stand up to high traffic.
In kitchens and bathrooms, you can stain cabinets, update countertops and tile to give your home an entirely fresh look. Small changes such as new faucets and new cabinet pulls will make a big difference. Updating light fixtures and hardware is another inexpensive update that makes a significant impact.
Don’t Forget Outdoor Space and Curb Appeal
Outdoor space is essential in Arizona. Renters want to be able to take advantage of year-round indoor-outdoor living. Give your landscaping and outdoor spaces a little refresh before you list your home for rent.
Consider outsourcing someone to maintain the lawn, landscaping, and pool if you have one. This will give you peace of mind that the pool and grounds are being well taken care of. This small investment can save you a lot of money down the road.
Make Necessary Repairs
Being a landlord also means you’re responsible for someone else’s living conditions. You want to make sure anything that isn’t up to code is repaired. Anything that is unsafe or isn’t working properly should be addressed.
Making minor repairs and getting professional help will ensure everyone living in your apartment or home is safe. This also shows well for future tenants. A professional maintenance company or property manager can help ensure everything is taken care of when you aren’t there.
Short-Term Rental Tips to Boost Your Bookings
If you’re looking to buy a home that’s used for short-term rentals, there are a few things you can do to earn more rent. To start, offer the house fully furnished. Whether it’s a vacation property or a home people can rent out for short periods, renters will appreciate the convenience.
In a vacation property, having portable cribs, pool toys, and bottled water will go a long way to show renters they are taken care of. These small touches will also make them more likely to come back and refer your property to friends.
Making minor updates to these properties is also a great idea. You’ll not only boost the value of your home, but you’ll also be able to charge more for rent. People on vacation want to relax; they don’t want to worry about a broken sink.
Think of all the little luxuries you look for in a hotel or home rental when you’re traveling. If your home is located near a resort area, including information about local golf courses, hiking trails, and spas can be helpful. These small touches will help you stay occupied and boost your rental income.
Becoming a Landlord, Landlord Insurance, and More
Becoming a landlord is an exciting way to earn an income and grow your real estate portfolio. If you’re ready to cash in on the tremendous rental market in Arizona, we’re here to help. Fill out the contact form here to learn more about our landlord insurance options. You can get a quote in just a few minutes. Protect your dream of rental property ownership!