If you are lucky enough to own Palm Desert real estate or a property in another desert city as a second home and it sits empty for most of the year, you may want to consider renting it out for additional income. If that sounds like a good option for you, here are some tips for protecting and making the most out of your investment.
1. Get your property in good condition for renting out. Whether you own something in an amazing area, such as Indio or one of the many beautiful homes in La Quinta, you want it to look great and have everything in stellar working condition. However, you may not want to keep expensive items in there that will cost a lot if they get damaged or broken. For example, you may want to avoid expensive furnishings, window treatments, fixtures, chandeliers and appliances.
2. Will you shoot for short or long rental terms? There are many factors to consider when making this decision. When you own property in desirable locations, such as Indian Wells, La Quinta or Palm Desert real estate, you can bring in a significant amount of income with short-term renters and vacationers. However, your risk factor for potential damage increases somewhat, so you may want to use a property management company to handle the day-to-day operations, which cuts into your profits a little bit. Likewise, if you contract a long-term renter, you will only be dealing with them, though you will need to charge less than you would to short-term renters. While equestrian homes can bring in a lot of extra income, long-term may be a better bet, as there typically be a lot more buildings included and animals tend to cause more damage than humans.
3. Determine pricing and deposit amounts. If you’re not working with a property manager to rent out your property, you’ll need to compare your home to other similar properties. For example, if you are looking to rent out real estate in Indio, look at other homes in the area and compare your square footage and features to determine your price points and deposit requirements.
4. Establish policies. Will you allow the renters to sublet the property? Will you allow pets? If so, how much will you increase your deposit?
5. Screen renters. Once you place an ad or determine which property management company you’ll be working with, your next step is to ensure that renters are thoroughly screened. You can use a service or do it yourself by contacting references, previous landlords, running credit checks and confirming employment.