Things to watch out for when renting out your house
If your house has taken longer than expected to get a buyer, you have the option of renting part of it or the whole house as you wait for the real estate market to turn around. Renting your home not only helps to protect your investment from vandalism, but also gives you the extra cash to cover your mortgage and other expenses.
However, being a landlord comes with a lot of responsibilities that you need to understand to be able to protect your home, and have a good relationship with tenants. We’ve listed some of the most important things here, so read on:
Condition of your property
The first step to take before renting out your property is to check its present condition. You can do so personally, or hire the services of a licensed home inspector to inspect the home professionally. He or she should be able to tell you the things that are working well, and those that need to be repaired or replaced.
Be sure to make the necessary changes required to make your home look well maintained and functional. This may be anything from replacing leaking roofs, repairing faulty hot water heaters, fixing broken windows, or painting the walls. It is also crucial to remove your personal belongings from the property and do a thorough cleaning to make the place look more appealing to potential tenants. Don’t forget to spruce the outdoors as well to boost your property’s curb appeal.
After ensuring that your house is in good condition for occupation, conduct proper research to help you know how similar houses in your area are charged. You can do so by checking the rental signs in your neighborhood, as well as checking online sources and newspapers. Make sure the price you set is competitive bearing in mind the kind of house you have, its present condition, and the amount charged for similar houses in your neighborhood. Remember that a price that’s too high can drive away prospective clients who want cheaper options. A lower rental price, on the other hand, will make you lose a lot of money in the long run.
To avoid having legal problems with your tenants in the future, you need to have a written lease agreement clearly outlining the terms and conditions that the tenants should abide by when living in your property. A lease agreement, which should be signed both by you and by your tenants, helps each party to understand what they can and can’t do. It’s best to work with a local lawyer to help you write a lease that complies with the laws in your region.
Some of the things a lease agreement should cover are the terms under which a tenant can be evicted, lease terms, security deposit, the due date for collecting rent and the penalties charged for late payments, who’s responsible for repairs and routine upkeeps, and policies for pet keeping. It’s equally important to make it clear in the agreement that tenants who want their security deposits back should clean their houses thoroughly if they decide to move out upon the end of their lease. A tenant can opt to clean the house by himself if he has the time and energy or hire the services of a professional cleaning company that offers end of lease cleaning. This is very important to keep your property in good condition for the next tenant, or owner if you plan to sell it in the future.
You also need to notify your current insurance company of your intention to let your property. That will mean changing your homeowner’s insurance to rental home insurance to cover for financial losses related to your rental property. Make sure you give your mortgage company a copy of your new insurance.
There are several things you can do to attract the right tenants. You can start by asking the people you know to spread the word around to potential tenants. In addition, advertise your house on social media and in your local newspaper. Putting a “house to let” sign in front of your property can also help notify neighbors and passersby that you’re renting.
Once you get potential tenants, ask them to provide you with their information to make it easier to screen them. The information to ask should include full names as indicated in the ID, social security number, names and phone numbers of previous landlords, salary as well as the place of work. Use the collected information to check their credit history and criminal history to enable you to find the most suitable tenant.
Lastly, consider working with professionals when renting out your property. A professional real estate management company, for instance, can help to maintain your property, find tenants, and ensure that you receive rent payments on time. You’ll also need to work with a real estate attorney to help you understand local property laws and ensure that your rental house abides by them. Consider working with a professional accountant as well as to help you adhere to the local tax laws.
In general, renting out your property can be a good option for you if it has taken too long to sell in the market. Renting helps to keep your house in good condition as you wait for the economy to improve. You also get extra cash to pay for your mortgage. Being able to understand the responsibilities and obligations of a landlord, enables you to be well prepared to deal with potential problems that may arise and keep your tenants happy.