What to Remember When Renting Out Your Home
Property rental can be a very lucrative business. Sometimes, it’s better to rent out your home instead of selling it. If you’ve acquired a new property and you’re planning to rent out your current home, there are many things to consider.
Although renting out your home can bring good profit, it can also be complicated. If you don’t handle it well, you’ll have plenty of headaches to deal with. To avoid stressful issues when renting out your home, read on for a few tips!
Understand Your Responsibility
When you rent out your home, you’ll immediately be considered a landlord. As a landlord, you have a responsibility to the property and to your tenants. Before you accept tenancy, you must understand the obligations and weigh your decision well. You should be ready to handle many different obligations.
Renting out your property saves you from issues that come with leaving a property uninhabited, like vandalism. You also get to generate additional income and enjoy tax breaks. However, along with these benefits are the huge responsibilities that you’ll have to face.
For example, you’ll have to repair all damages to the property. Also, you’ll have to handle property maintenance throughout the tenancy contract. If you need funds for repairs before renting out your home, research options for a loan. Try your bank for a home improvement loan, or reach out to an online lender, like Credit Ninja, if that is more convenient.
Set a Reasonable Rental Price
Having understood and accepted your obligations as a landlord, the next thing is to put your rental property online at a reasonable price. Research your target market and know the market price of rental properties in your location.
An appropriate price on your rental property will attract many potential tenants. That way, you’re assured of making profit on your property sooner. Overpricing the property could leave it empty for a long period. That will translate to zero cash entering your pocket… and that can be especially difficult if you are still facing your mortgage payment for the home.
Be Selective of Tenants
Screening your prospective tenants properly will help you avoid future problems in your rental business. Also, it will ensure you get the right tenants who will care for your property. After setting an appropriate rental price, expect many people to show interest.
You can start by advertising your property online and in print to reach a wider market. Also, consider posting it on social media or an online rental market. You can also put an advertisement in a newspaper. Screen interested persons and have them provide basic information such as name, salary, employer, previous address, and others.
Insurance Can Be Handy
You need to protect your property if you plan on renting it out to random strangers. You don’t know how your future tenants will handle the property. Be sure to get a policy that provides protection for you, the property owner. Property insurance comes with different benefits. One of them is that it can cover the cost of most repairs.
Additionally, it would be best if you encouraged your tenants to acquire renter’s insurance. Doing so, you’re absolved of any liability that results from any damage to the tenants’ belongings.
Some landlords face litigation because of damages to the renter’s belongings. Insisting your tenants get insurance will save both parties the hassle of litigation if damage was to occur. Renter’s insurance policies are often affordable, and most tenants don’t mind paying for one.
Get Proper Permits and Documents
Your property rental is considered a business because you profit from it. Since every business must get specific permits and documents to operate, your business will need the same. Do your research or inquire with your local registry on how to go about it.
Laws on property rental differ from state to state. There’s no one-size-fits-all advice regarding the laws of renting. Consider talking to a lawyer or your local government authority for the right information.
It’s also important to prepare a rental agreement that documents the agreed terms between you and the tenant. Your tenant should have a copy of this document, while you also keep a copy. That way, both parties can always refer to the agreed terms. Having your lawyer prepare this document will give you a more robust agreement.
If you have multiple units for rent, consider hiring some professionals to help you along the way.
You might want to start with a lawyer. Your lawyer will be responsible for all the legal aspects of the rental business. The next person you’ll have to hire is a project manager. He or she will oversee the entire operation of your business.
Accountants can also be a good addition to your team. Handling the finances of a business can be a tedious job. It’s a good idea to have a trustworthy professional do it for you. You’ll have more time to focus more on other aspects of the business.
Are you ok with having to DIY all the messy maintenance jobs? Consider hiring someone who can make sure your properties are well taken care of. The maintenance expert will not only clean your properties, but also ensure everything in it is functional. That way, your tenants get to enjoy a great living experience.
Renting out your property isn’t the easiest of jobs. You need to put a lot of things in place to avoid terrible mistakes. Also, you need to ensure the protection of your property, while providing the best home for your tenants. Before you start marketing your new business, it’s important to address considerations discussed above. Doing this will help prepare you for a smooth running of your rental business.