Understanding how to implement and calculate prorated rent in your rental home can help ensure you maintain a positive cash flow between leases.

What is Prorated Rent and How to Calculate it

Understanding how to implement and calculate prorated rent will allow you to lease your rental property to ideal residents and ensure you maintain a positive cash flow between leases. 

Prorated rents allow you to rent your property to a new and existing resident for a period less than your typical lease term of a month. Depending on your unique circumstances, you may have a resident who wants to move in on a day other than the first of the month. Similarly, residents may move out before the end of the month or need a few additional days or weeks before they move out. Prorated rent is rent that is calculated proportionately to the monthly rental amount.  

Prorated rent is equal to the daily rental rate multiplied by the number of days the residents will rent your property outside the current lease terms. 

Prorated rent = Daily rental rate x Number of days

You can calculate the daily rental rate by dividing the monthly or yearly rent by the number of days in the month or year. When you calculate the daily rental rate, there are four methods you can choose from. 

Daily rental rate based on the current month: Calculate the prorated rent by dividing the number of days in the month by the monthly rent and multiplying it by the number of days in the prorated rental period. 

Daily rental rate based on the average month: The average month has 30.42 days. To calculate prorated rent using the average month, divide the monthly rent by 30.42 and multiply it by the dates included in the prorate rent period.    

Daily rental rate based on the banker’s month: To calculate the daily rental rate using a banker’s month, calculate the prorated rent using 30 days in a month. Use 30 days regardless of how many days are in the month you are charging prorated rent. 

Daily rental rate based on the number of days in a year: Instead of calculating based on the days in a month, calculate the daily rental rate using the number of days in the year and the annual lease amount. To do this, multiply the monthly rent by twelve to find the yearly rent amount. Divide the annual rent by the number of days in the year (365 unless it’s a leap year) to find the daily rental rate.

Once you’ve chosen a method and identified the daily rental rate, you can multiply that rate by the days the residents will rent the property to find the prorated rent amount. 

Let’s imagine the monthly rent for your investment property is $2,000, and you have a resident who would like to move in 10 days before the beginning of their new lease. We can calculate the prorated rent amount using the formula above and our chosen method of finding the daily rental rate. Let’s assume that the current month is February, which is not a leap year. 

Prorated rent using the current month’s daily rental rate in February: 

$2,000 monthly rent /29 days = $68.97/day x 10 days = $689.70 

Prorated rent using the average month daily rental rate: 

$2,000 monthly rent /30.42 days = $65.75/day x 10 days = $657.50 

Prorated rent using the banker’s month (30 days) daily rental rate:

$2,000 monthly rent /30 days = $66.67/day x 10 days = $666.70 

Prorated rent calculated based on yearly rent: 

Depending on your method, you can see a slight difference in the prorated rent amount. There’s no wrong way to calculate the daily rental rate, but it is critical to use the same method consistently. This will allow you to answer any questions your residents may have about the prorated rental amount. 

There are two main situations where it is appropriate to use prorated rent. In both cases, prorated rent can aid in creating a smooth rental transition. 

When a resident moves in mid-month, let’s say your last resident moves out, and it takes you several weeks to find a new resident. They may move in on the 18th instead of waiting until the 1st of the following month. In this case, you’ll want to charge prorated rent from the 18th to the end of the month. 

Alternatively, when a resident wants to move out two weeks after the end of their year-long lease, imagine you have a resident who would like to move out on January 14th instead of December 31st. If you agree with their request, you will charge prorated rent from January 1st to January 14th. In this example, you would charge the prorated amount at the beginning of the last month. 

If you offer prorated rent when a resident moves in, consider charging the first month’s rent plus the prorated rent. You can collect this amount before your new resident moves in. Once the next month, charge rent as outlined in the lease agreement. 

Suppose you are charging prorated rent when your resident moves out. In that case, you can charge prorated rent at the same time and in the same manner as you typically collect rent once you’ve calculated the amount. 

Should you include prorated rent in your lease agreements? 

It can be helpful to outline in what situations and how you will charge prorated rent in your lease agreement. Ultimately, the goal is to communicate the process with your residents, so there is no confusion when these situations arise. 

Make it straightforward for your residents to understand how prorated rent works. Remember that they may not be familiar with prorated rent or know precisely how it works. Simple, proactive communication can have a positive outcome for everyone. 

As always, you should work with an attorney to ensure your lease meets local requirements and effectively communicates expectations to your residents. 

How prorated rent can help you find new residents 

Prorated rent can be a helpful tool in attracting new residents to your rental property. If you can offer potential residents flexibility using prorated rent, you can encourage a high-quality resident to choose your property over another. Similarly, a positive move-in experience which may include prorated rent is a good way to retain excellent, respectful residents.

You don't need to advertise your rental property as a white box with these 4 simple touches that add liveable personality and attract more renters to your home.

4 Easy Ways to Make Any Rental Property Feel Like Home

While it can be tempting to advertise a rental property as a blank canvas for new residents to personalise, there are simple touches you can add to make a space feel like a home, helping renters picture themselves in the space. 

Our homes are often a reflection of who we are as we put our own furnishings and touches on a space. But what about a rental home on the market for new tenants? You want to give them the freedom to make a space their own, but also make it feel inviting – making it easy for potential residents to imagine themselves living there. You want to give them a sense that your home can be their home, to signal that beyond the four white walls there is a soul, a personality. It’s not that hard to accomplish, and here are 4 simple tips from the experts at Belong based on experience with hundreds of homes.

Floating shelves are highly affordable and so easy to install you’d feel embarrassed hiring a Task Rabbit, floating shelves give any room a subtle lived-in quality, while also serving a function. For example, in a kitchen, they can act as a spice rack; in a living room, you can use them as a striking mantle or bookshelf. 

What’s more, their very presence tells any potential residents that this is a place ready to welcome their memories: there’s room for their wedding photos, their favorite books, and even the tchotchkes they inherited from their grandparents.

The meeting place between the wall and ceiling is a place for detail and charm. The data shows that Millennials want older homes with character and authenticity. 

Belong has talked before about how a picture rail can lend any space a little character and old-world charm; it’s a claim we stand by.  What’s more, when your residents hang their pictures on a rail, they don’t have to bang nails into your walls and damage them.  Here’s an example of how cool picture rails can look.

Simple, but tasteful, renovations can also make a home easy to fall in love with.  Is it time to put in a new sink?  Contemplate a pedestal sink: they’re competitively priced, and add a touch of elegance to the space.  Is the carpet getting a little ragged?  Before you replace it, see what’s been hiding beneath all those years.  Sometimes you’ll find the kind of beautifully preserved hardwood that makes interior designers drool, and also appeals to Millennial tastes.

Nothing says home like piles of comforting blankets. Layer soft throws in your living room for quick access and a cozy aesthetic, or keep a pair of moccasins on hand for colder nights. Adding rugs to otherwise sparse rooms can add a bit of warmth, both underfoot and visually. When you are comfortable, and your house doesn’t feel like a museum where nothing can be touched, you feel at home.

There’s something strange about moving into a new house and noticing its unfamiliar smell. If you’re moving into a house that had one previous owner, or has been around for 100 years, you’ll notice that it has a distinctive scent - good or bad. To make your house feel “homey,” start using room sprays or lighting candles with scents that make you feel calm and comfortable. The flickering light of the flame will add another cozy element to your home as well. If you really want to clear out the old and welcome in the new, think about lighting a bundle of sage and walking through your home, letting the fragrant smoke drift up into corners as you chant a clearing mantra. 

Most of these modest but high-impact upgrades require no contractor assistance. For those that do, remember that when you work with Belong, you have access to their a vetted fleet of 10,000+ professional contractors and craftspeople who are ready to help with any installation or upgrade you can imagine!

Belong is simplifying the rental experience and helping more homeowners reach their financial goals through real estate. Visit our homeowner's page to find out more about how our services are helping people to ditch property management in Seattle, Redmond, Oakland, San Francisco, San Diego, Los Angeles, Tampa, Orlando, Jacksonville, Miami and many more.

How much rent should you charge? This guide has all of the rental pricing factors to keep in mind for setting the perfect rent price for your rental property.

12 Rental Pricing Factors 2022: How to Price Your Rental Property

Perhaps you’re a participant in the Great Resignation and are looking to rent your current house as you relocate to a new area. Or maybe you recently decided to acquire a rental property. Regardless of how a home recently came into your possession, you’re wise to be putting it up for rent, as earning passive income from rising rental costs means you’ll have more money in your pocket to spend or reinvest.

But, with acquiring a new property comes the challenge of knowing how to price it. You’ll want to be earning enough to make a decent profit after your monthly expenses, but don’t want to price yourself out of the local real estate rental market. 

In this guide, we’ll give you all of the rental pricing factors to keep in mind for setting the perfect rent price for your rental property.

While hyper-specific variables pertaining to the neighborhood and property at hand will most directly impact your property rent rate, here are the common factors that impact how much residents will pay for renting your property:  

The famous real estate expression goes, “location, location, location,” for a reason! The state, county, township, neighborhood, and even street of your rental property must be considered when deciding on the appropriate rental price. Do some digging on the Internet to look for common trends in your neighborhood and surrounding area. To get you started, we’ve put together some local pricing guides for Seattle, Miami and the Bay Area. 

What do other local rentals look like? How does your property compare? If your property is pretty standard compared to others, you can anticipate charging around the average price for rent. If it’s much nicer, consider charging more than the average rent price.

While you don’t want to price gouge your residents, you’re in the real estate business to make money. Consider your monthly mortgage payments, utilities expenses, HOA fees, and other set expenses to determine how much you’ll need to charge a month in rent to make your property a profitable expenditure. 

Pro Tip: Work with Belong for a look into average monthly utilities expenses and other localized rental data collected from years of managing properties in your neighborhood. 

3. Square footage of home (and # of bedrooms & bathrooms)

How much total space is there? How many bedrooms are there? Bathrooms? These numbers have a direct impact on the amount you can get a month for rent, so you’ll need to tally up these numbers and compare rent prices of local rentals with similar square footage and number of bedrooms and bathrooms. 

Is the property you’re listing brand new construction or is it aged? The answer to these questions will have a major impact on demand and how much people are willing to pay. If it was built recently, be sure to compare rents with other new construction listings. If you notice other rentals appear older than yours, keep in mind that you can probably justify charging more. Working with an appraiser is your best bet for getting an accurate representation about the quality / age of your rental property. 

Pro Tip: Does your rental property look and feel old? Consider putting effort into a facelift and maintenance work now so that you can justify higher rent prices for years to come. Maintenance workers are full-time employees at Belong, meaning if you work with us as your property management team, you can get issues around your rental property addressed 24 / 7, 365. 

Parents obviously want what’s best for their children. That means they want to rent a home in an area known for having a high-quality school system. Put time into researching variables like local standardized test schools, classroom sizes, state rankings etc. via online platforms like Niche and Public School Review to determine how much of an impact local school districts will have on rental pricing. 

Read on for more details on How Your Property’s School District Affects Rental Prices.

6. Are appliances antiquated or modern? 

If you’re willing to splurge on modern appliances, you can leverage them as a justifiable reason to charge more for rent. Most people would much rather have a laundry room at home than have to take their dirty laundry to a laundromat. They’d also like to have a modern oven and stove top in their kitchen. By splurging on new appliances, it will drum up demand as a major selling point and garner you more in monthly rent prices.

Are you not interested in upgrading antiquated appliances? Keep in mind that you might not be able to yield the same rent prices as properties nearby with modern appliances. 

7. Who’s paying for the monthly utilities?

Are you covering the water and electric bills, or passing that cost onto the residents? Determining who’s paying for what will make it easier to dictate what the total cost for monthly rent will look like. 

Common utility costs include electric, water, gas, trash / recycling, Internet and heating / cooling. Decide which you'll be paying for out of pocket vs. passing on to the resident to pay. 

If a renter considers their pet a part of the family, they’re willing to pay more to secure a place to live for their fur baby. Give consideration to whether or not you’re willing to allow pets in your rental property, and be sure to charge them a monthly fee for having a cat, dog, or other animal,  as damage from pets can be a costly issue to fix for a landlord.

If you decide not to allow pets or the community in which you own doesn’t allow it, you won’t be able to charge as much for rent and will ostracize a large pool of potential residents (as 70% of American households report having at least one pet.)

Read More: 6 Paws-itively Compelling Reasons To Consider Renting To Pet Owners

Besides the square footage of the interior of the house, Americans are obsessed with their lawns. That being said, open yard space for your residents to hangout, soak up the sun, and let their kids and dogs run around will definitely justify a higher rent rate. Will you also be covering lawn maintenance as a utility? Be sure to factor that into your rent price too!

The summer months are a hot time to move (...pun intended,) with recent highschool and college grads venturing into new places to pursue an education or new career and parents of young children moving while public schools are not in session. 

If you’re able to list your rental in the summer when demand is up, you can lock-in a higher year lease than in slower times of year like the winter.

Why is Summer the Best Time to List a Property for Rent? Read on to find out. 

Where is the world economy at? Is the real estate market booming or slowing down? Is the unemployment rate low in the neighborhood at hand? Considering the status of the economy at a macro and micro level will help in determining what people in your area can afford to pay in rent.

Pro Tip: As the summer months cool down and economic indicators suggest we could be entering a recession by 2023, you may want to consider getting your property listed sooner than later to lock in top rental prices. 

Does your property have a pool? Does the HOA offer a community clubhouse? Are there great restaurants and things to do in walking distance? These are all topics that are top of mind for renters looking for an ideal place to live, and they absolutely factor into how much you can justify charging for rent. While timing the market is easier said than done, pay attention to economic forecasts when deciding on the right amount to charge for rent. 

How can Belong assist in setting rental prices? 

When working with an expert to get your property rented, you have the benefit of years of experience and data on the neighborhood at hand to make educated decisions. Rather than spending your precious time researching factors like average local rental prices, nearby school districts, the condition of the property etc., let historical and quantifiable rental data set the tone for the appropriate rental price for your property.

Once a rental price is settled, Belong data and team members will work to get you the best residents possible for your property. Once they’re all settled in, another perk is guaranteed rent, meaning you’ll never have to worry about not receiving your passive income, even if a resident doesn’t pay on time. Onboard with Belong today to get your property rented soon and for a reasonable rate!

This Q&A on rental inspections for your home shows how to manage routine inspections of rental properties and how they can protect your real estate investment.

Rental Inspections: Why You Need Them and What To Do With The Results

Regular rental inspections for your home are a great way to stay connected with your residents and uncover any fixable issues before they become expensive problems. This simple Q&A will cover the ins and outs of inspecting a rental property and what to do when you receive an inspection report for your home. 

Routine inspections of your rental home are essential to protect your investment, by keeping tabs on any wear and tear on the property. It’s also an opportunity to connect with your residents to make sure they’re happy and are sticking to the conditions of the lease agreement. 

During rental inspections, you (or a representative), should be looking for damage, but also for wear-and-tear on the property that has the potential to become an issue if left unattended. 

For example, some damaged roof tiles and cracks in the caulking is not an urgent issue — but if water seeps in and leaks — it is. Identifying basic maintenance work could be the difference between a small patch job and replacing the roof! 

The exterior condition of the home — including gutters and lawn upkeep

The internal condition of the home — such as any mold growth, water damage, or physical damage to walls or windows

Issues with the plumping such as toilet, sinks, or water line

Any malfunctioning appliances that need updating

Anything that creates an uncomfortable environment for your residents

Any violations of the lease agreement (e.g. keeping a pet without permission)

It also gives you an opportunity to spot any changes to the tenancy agreement. For example, if a couple has split and one resident has moved out, or if long-term guests are staying and haven’t yet been screened or approved as a resident. Giving them the opportunity to be screened and added to the lease is another way to protect your investment. 

How often do you need to inspect a rental property?

Generally routine inspections take place anywhere from 1-4 times per year. This could be done annually, seasonally, or quarterly, depending on your lease agreement. 

Your state laws will guide you to what is an excessive number of inspections per lease period. Regardless of where your home is located, all tenancy laws give residents the right to ‘quiet enjoyment’. This means that as the homeowner, you should not be bothering them with more than a few inspections a year.

Who should be conducting routine inspections on my rental home?

Who conducts the inspections of your home depends on how you manage your property. If you self-manage the home, you will need to either do the inspections yourself or hire a representative to do them on your behalf. 

If you use a property management company to look after your rental property, they will also do the inspections. Check the fine print on your management agreement to see how many inspections are included, as many property managers will charge fees per inspection. Particularly if you pay a lower monthly rate, you could be up for ~$150 per inspection and will need to factor this into your budget. 

If your home is on Belong’s residential network, we schedule home visits on your behalf to connect with the residents, assess if anything needs fixing, and ensure there are no lease violations occurring. Inspect reports and information can be delivered directly to your smartphone via the Belong app. And best of all — it’s free. There are no hidden fees when a Belong team member visits your home for an inspection. 

If we identify any maintenance issues or damage, we can connect you to the right professional in our extensive vendor network of over 10,000 contractors. You can even select a finance option to pay the cost of on your own terms. 

Learn More: Discover Belong PRO, the best alternative to Property Management in Seattle, Redmond, Oakland, and many more cities across California, Florida and Washington State.

How much notice do residents need before a rental inspection?

How much prior notice residents need varies depending on state law. For example, if you own a home in Seattle, you need to give residents at least two days’ written notice to enter. In California, it’s “reasonable notice” and 24 - 48 hours notice is presumed to be reasonable for most matters. 

Legal website Nolo has this handy chart of State-based laws for entry into rental properties. 

Of course, no one likes to be sprang upon, so keep in mind that these are legal minimums. It is courteous to allow a week or so to give your residents time to respond or reschedule. If you are providing written notice via the post, you should also allow six days for the mail to be received. 

If your home is on Belong’s residential network, we schedule home visits on your behalf and foster a positive relationship with all of our residents, making the process simple and stress-free. You won’t need to contact your residents because our Member Service Team will ensure both you and your resident have everything needed. 

See why thousands of US homeowners are ditching outdated Property Management in San Francisco,San Diego, Los Angeles, Tampa, Jacksonville, Concord, Berkeley, Orlando and more.

If you (or a representative) suggests a date and time that doesn’t work for the residents in your rental home, they can request an alternative. But they cannot outright refuse to let you or your management team inspect your property if you have followed the laws around notice. 

Is it ok to do a ‘drive-by inspection’ of my home when it’s being rented?

Drive-by (or walking/riding past) inspections are legal if you are truly passing-by to take a quick look at the outer condition of the home. For example, checking if the lawns are being maintained or if the gutters need to be cleaned. 

If you get out and start physically inspecting the home, or if drive-by inspections are being done too frequently — this could be viewed as tenant harassment and in violation of quiet enjoyment. 

What should I do with a rental inspection report?

Take the time to review any inspection reports to ensure there are no surprises. If your property is in good shape and there are no major differences or maintenance issues observed, great! You have the peace of mind that your home is in good hands. It’s a nice gesture to pass on your thanks to the residents to acknowledge and show your appreciation. 

If there are items that need addressing, it’s important not to put them off. You will either need to approve recommended repairs or, if you self-manage the property, start looking for quotes and arrange to have the situation rectified yourself. Be sure to keep the resident in the loop so they know what is happening and you can arrange to send in a contractor to work on the home. 

If a lease violation has been observed, Belong or a property manager may make a recommendation on how to mediate the situation or suggest issuing an eviction notice. State laws vary on how to manage evictions, so be sure to speak to Belong or your property manager on how to take the next steps. 

If you self-manage the property, it’s a good idea to obtain legal advice on how to proceed further and issue any required notices. 

Find out how Belong is making renting lovable 

If you like the sound of free inspections, wait until you see what else Belong has to offer. Belong is not a property management company, but a residential network offering unique services to both homeowners and their residents. From not charging fees for the essentials (marketing, inspections, pricing analysis, lease renewals and more) to guaranteeing rent, Belong will partner with you to achieve financial freedom. And you'll never need to lift a finger. Learn more and find out if your home is eligible at belong.com/homeowners.

How do you price a Miami rental property in 2022? By ditching the property management model for a modern alternative designed for the real world and true value.

The Realistic Way To Price a Miami Rental Home When The Market is Mad

Forget basketball and even the weather, when people mention the Miami heat lately it’s more likely to be real estate talk. But when the market is hot, how much rent is too much? How do you price a Miami rental property in 2022? By ditching the property management model for a real-world alternative.

While reports vary, they all tell a similar story: Miami rents hit an all-time high in 2022. The NY Post blames an exodus from NYC, LA and SF for Miami apartment rents increasing by as much as 57%. In February, CNBC ranked Miami as the fifth most expensive U.S. rental market for a one-bedroom apartment.

But with these sharp increases are warnings that the Florida market is overpriced.

While 2020 was the year of the pandemic, 2022 is shaping up to be the year inflation went mad. Owners and buyers of investment homes in Miami are looking at how much rent to charge to cover mounting costs and interest rate rises. Of course, residents will also be redoing their rent budgets keep a roof over their heads.

How to price your Miami rental property with realistic, real-time rent valuations

The take away from all this madness is that this isn’t the same rental market of years gone. Property values have changed too much, we’re all playing a different game now. Yet, it seems this is news to the property management industry, who are still using a handful of comps to price Miami homes in this complex rental market.

Belong addresses complexities by taking a modern approach to pricing homes on the rental market. In fact, Belong has ditched the property management model to offer a completely approach to the rental market.

When helping homeowners in Florida, Belong uses technology to blend live market data with an all-important metric: real demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. And because we extend our services to renters as part of our community, we attract the best of the best to place in your rental property.

Belong averages 66% less vacancy than property managers

Once your Miami home is listed on Belong, we get a true measure of the home (not just the market benchmarks). Our proprietary tech examines impressions, tour sign-ups and how many people have started rental applications. With all that data at our fingertips, we can work with homeowners to react quickly and maximize rental value, while minimizing vacancy.

As a result, we trump the property management industry with 66% less vacancy. And our residents want to stay too. 71% of Belong residents renew their 1-year lease (and unlike property management companies, this is done at no cost to homeowners).

Regardless of how your Miami rental home is valued, if you already have a tenant in place,  you can’t just decide to play catch-up and throw a massive rental increase at your residents.

In May 2022, Miami-Dade County passed their first Tenants Bill of Rights, which governs rental hikes. Owners need to provide their residents with 60-days notice for any rent increases of more than 5%. So if you feel your home is undervalued, be respectful and keep an open dialogue with your residents to ensure your price increase is fair and lawful.

If you switch your rental home to Belong’s residential network, we can assist with this process. Plus, we will be on hand 24/7 to assist your residents, freeing you up to focus on other things in your life.

Goldilocks rental pricing that is just right, for right now

With a unique approach and live insights from the Florida rental market, Belong knows exactly what high-quality, long-term residents are looking for and what they are ready to pay, right now.

The result is fewer vacancies, great people caring for your home, profitable rental income, and no tricks or compromises that could put you at legal risk or devalue your home as a rental investment.

Find out how Belong would value your Miami rental at https://belonghome.com/homeowners/miami. Got a Florida home for rent outside of Miami? Check out our homeowner guides for Orlando and Tampa.

More than just paying rent on time, great tenants will care for your home like their own. Here’s 10 steps to attracting the perfect tenants to your rental home 

10 Steps to Attracting the Best Rental Property Residents

Attracting great rental property residents is so much more than a business transaction. 

Of course, you want to find residents you can trust to pay rent on time. But you’ll also be sharing your home with them, and entrusting them to take good care of it while they live there. 

That can feel like an overwhelming task, especially if it’s your first time renting out property, or you have a deep personal connection to your home. You want to find residents who are just the right fit and who will love your home as much as you do. 

The answer is to show residents that you’re committed to providing a wonderful living space, and that you care about what kind of life they can build there. Here’s a step-by-step guide to attracting the perfect tenants to your rental property. 

Before you start looking for residents, ask yourself if this is a home you’d be happy to live in yourself. Look around for broken, worn-out, or dated fixtures and appliances, and replace or repair them to get your home up to date. 

The best residents aren’t just looking to move into whatever home will accept them — they want the best place they can possibly afford. That means you need to offer them a modern, livable, and comfortable space. 

There’s no need to spring for a luxury, high-end renovation. In fact, doing so could be harmful if you end up pricing your home out of market rents in your area. As long as you’re offering tenants an updated home in good working order, you’ll get plenty of great applications to choose from. 

Renting out your home isn’t a matter of just charging whatever you want. Set your rent too high and you’ll hardly get any applications, while if you set it too low, you’re leaving money on the table. 

Research market rent in your area using sites like Zillow and Craigslist, then decide on a fair price for your area, the size of your home, and how up-to-date it is. 

If market rent is below what you need to cover your mortgage, property taxes, and maintenance, that could mean renting is not the right option for you. 

Read More: 12 Rental Pricing Factors 2022: How to Price Your Rental Property

Now that your home’s updated, the logical next step is to show it off at its best. That means deep cleaning and light staging, ideally including a fresh coat of paint. 

Pay attention to details! If you want residents who will take good care of your home, you need to show them that you take good care of it, too. Those extra touches, like fresh flowers and throw pillows arranged just so, can go a long way toward showing that you take pride in your space. 

Don’t forget about the outside of your home, either. Before every showing, rake up stray leaves, pick up trash, and mow your lawn if you have one. That will help you make a good first impression before potential residents even walk through your door. 

Every neighborhood is different, and best-suited to a certain type of person. Get to know what makes your area special, such as the parks, schools, grocery stores and other amenities around your home. 

Are you in a hip district that would be great for a young person, or a quiet, residential area right by a preschool? By sharing plenty of information about your neighborhood — including its shortcomings — you’ll be able to help people make a good decision and assess if it's the best fit for them. 

Remember, you want to attract the right person, not convince people to move in no matter what. 

Read More: How Your Property's School District Affects Rental Pricing

Who’s your perfect tenant? If you think about what you’re looking for beforehand, it will be much easier to pick out a great application when you see one. All the work you’ve done to assess your neighborhood, market, and improve your home itself will come in handy here. 

Before you start accepting applications, try coming up with an ‘ideal resident profile.’ This can include both non-negotiables, like non-smoking or no pets, and nice-to-haves, like “works a 9-5 job” or “doesn’t mind traffic noise.” 

By considering these factors, you can start to piece together what your perfect resident might look like. Maybe your home is great for a single person who works remotely, or a young family who loves the outdoors. 

A great listing makes your house seem as appealing as possible. The goal is to get people excited to come and see it!

Be as descriptive as you can when crafting your listing. Include plenty of detail about the home, the terms of your rental agreement, and the location, plus multiple photos or videos. The more information you give people, the more likely you are to attract the right tenants. 

You should also give your listing a warm, human touch. This is your potential resident’s chance to get to know you, as well as the home itself. Show them that you’re a good communicator who puts effort into running a rental property, and that you care about their needs. 

Read More: How to Market Your Rental Property and Find a Great Resident, Fast

7. Try individual showings, not a mass open house 

Seek quality, not quantity. Instead of a single, chaotic open-house, set up individual showings with only the residents you’re most interested in. 

This gives you a chance to get to know them better and shows them that you’re conscientious, considerate, and looking to build a respectful long-term business relationship. 

Demonstrate to applicants that you care about their needs by fitting in showings around their schedule. If there are residents in your home currently, be prepared to work around their availability, too. 

8. Prepare handouts to make resident’s lives easier

To generate interest in their properties, many real estate agents prepare one-page documents or brochures to hand out at viewings. Why not take a page from their book, and wow applicants with your dedication to customer service? 

Assemble a one-page document with important details about the home, its area, and the terms of your agreement, like lease duration and smoking restrictions. If you really want to go the extra mile, flex your graphic design skills and create an appealing, colorful brochure.

This kind of attention to detail shows preparedness and an investment in your residents’ experience. Show them that you take renting out your property seriously for what it is — a job! 

Once you’ve attracted some amazing potential tenants, make it as easy as possible for them to apply. Hand out complete application packages at every showing, including your lease application and request forms for any other information you need, like references and employment information. To create helpful all-in-one packages, you can bundle these together with the handouts you prepared in step 8. 

You can also consider accepting applications online. Removing as much friction as possible from the process will ensure you get plenty of great responses. 

10. Vet prospective residents thoroughly 

If you’ve followed these steps, you should have a large pool of residents to choose from. That gives you the opportunity to be very selective, and carefully vet your new tenants to make sure they’re trustworthy and responsible. 

If you're in the market for investment property, learn about financing, credit scores, and how to choose the best mortgage lender for an investment property.

How to Choose a Lender When You Want to Buy an Investment Property

In preparation for choosing a lender for your investment property, you’ll need to familiarize yourself with loan qualifications and underwriting requirements and decide which factors to consider when choosing a lender. With some preparation, you can position yourself as an ideal candidate for lenders and be prepared to present the best offer when you find your investment property of choice.

What to know about financing an investment property 

If you are financing a rental property investment for the first time, it’s critical to understand that it will be more challenging to qualify for an investment property loan. Lenders consider real estate investment loans to be higher risk than loans for primary residents.

If you want to make the qualifying process more manageable, familiarize yourself with the underwriting standards used for investment property financing. In general, you’ll need to show that you can afford your existing mortgage and the monthly loan payments on an investment property. Underwriters will also consider your down payment amount, credit scores, and debt-to-income ratio and evaluate your current savings.  

Down payments for investment properties 

Real estate investors should expect to make a larger down payment than they might have with their primary residence. When purchasing a primary home, you may have qualified for a loan with as low as zero to 3% down. In contrast, you should expect lenders to ask for a larger down payment, often between 20% and 35%. A larger down payment will also help you secure better terms for your loan. 

As with a residential mortgage, lenders will use your credit score as a determining factor in the loan pre-approval and underwriting process. While everyone’s circumstances are different, lenders typically like to see a minimum credit score of 680. If you have a credit score at or above 740, you can expect better interest rates for your investment property loan. 

The loan underwriter for your investment property lender will use DTI to evaluate your future ability to repay your loan. DTI is calculated by measuring the percent of your monthly income that goes toward paying off debt. If you currently have a mortgage, car payment, or student loan, those debt payments will limit the amount of money your lender will be willing to offer you for an investment property loan. 

Ideally, you want a DTI that falls between 36% and 45% to qualify for a rental property mortgage. Remember that future rental income is not factored into the debt-to-income (DTI) calculations. 

In addition to reviewing your down payment, credit score, and DTI, underwriters will look to see if you have enough money in savings to cover 3-6 months of mortgage payments. Mortgage payments include the loan principal, interest, taxes, and insurance. The more savings you have access to, the more likely a lender will approve your investment property loan.

Additional underwriting requirements for real estate investment financing

In some cases, loan underwriters will ask for additional documentation for investment property financing. 

Additional underwriting requirements for investment properties can include:

Documentation that you are buying the property for business or investment purposes

Operating agreement for your business entity, if applicable 

Lease agreement (if the property already has a tenant in place)

We encourage you to discuss these requirements with your real estate agent and potential lenders. Understanding what you need for underwriting can help you be more prepared and quickly act on opportunities. 

How to Compare Mortgage Lenders for an Investment Property 

Once you have a clear idea of what factors will influence the pre-approval and underwriting process, you can begin to compare potential lenders. Finding the right lender will help eliminate headaches as you progress through the process and can ensure you make financially sound and advantageous decisions. 

Types of investment property loans a lender underwrites

As you begin your research into potential lenders, you’ll need to ensure that any potential lenders will underwrite your chosen type of loan. Not every lender will underwrite every kind of loan. Carefully research each lender's loan options, terms, and rates before moving forward. 

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