Is renting out your home something you’ve ever considered? Whether it is because of a great deal, inheritance, or downsizing, people often find themselves in a situation where renting is a viable option. But how does the process work? Renting a home isn’t something many people are familiar with unless they’ve done it themselves. Here are seven tips and considerations to keep in mind before renting out a property.
Consider a Property Manager
You’ll need to decide if you’re going to hire a property manager. It may be better for you and your tenants if someone else manages the rental of your home, especially if you are already busy dealing with other responsibilities.
A good property manager will help with all aspects of renting out your house or apartment, from finding new tenants and negotiating deals with them to making sure everything goes smoothly when they move in. They can also help out with minor repairs while they’re there, ensuring there are no major issues that need fixing during their stay.
Decide What Kind of Tenants You Want
Consider the type of tenant you want before listing your property. There is a wide range of people to choose from, including families, couples, young people, elderly people, and singles. Additionally, businesspeople might be interested in your home if their staff are visiting clients in town and need a place to stay.
You may also consider allowing pets, or allowing multiple tenants to split the rent, which is common among college students. As the owner of the house, you have a lot of control over the kind of people you let live there.
Set a Reasonable Price
The most important factor to consider when setting the rent is the property’s market value. It’s also important to stay reasonable because, if you set your rent too high, you’ll have difficulty finding tenants and will end up with a property that sits empty for long periods of time.
Rent should be based on what similar rentals are renting for in your area. You can use websites like Zillow or Trulia to get an idea of comparable homes in your area and what they’re renting for currently. If you want to guarantee tenants, charge slightly below the going rate. You will find that most renters aren’t very picky if they are getting a great deal.
Prepare the Home
If you’re planning to rent out your home, you’ll want to make sure the house is in good condition. This means making sure it’s clean, in good repair, and well-lit. If you have any concerns about the home’s condition or if there are any repairs that need to be made before tenants move in, schedule a time with a contractor or handyman beforehand so you can make sure the tenants are happy once they move in.
Advertise the Home
When you’re advertising your home, use a professional-looking website. Make sure it’s easy to access and has all the features that potential renters are looking for in an advertisement. Use a contact form on your website so that people can reach out directly with questions or comments about your property. If possible, create a landing page where potential renters can see pictures of the interior of your house as well as information about things like utilities and fees associated with renting before deciding whether or not it’s right for them.
Screen Potential Renters
Before you begin to screen potential renters, it’s important to make sure that they meet your needs. Be sure to check references. Ask tenants’ previous landlords or employers for information about how well they’ve performed in the past. Be sure to check the applicant’s credit history and income as well; a high debt load could indicate that someone doesn’t have enough money saved up before moving into your house.
Create a Lease Agreement
In order to rent out your home, you must have a lease agreement. In it, the terms and conditions of the tenancy are outlined, including:
- Amount of rent to be paid every month
- Length of time the tenant will stay in the property
- Who pays for utilities (whether you will pay them or your tenant)
- Maintenance responsibilities
During this step, remember that you own the home, meaning you have the power to make decisions. Deals can be negotiated, but the final decision is yours.
If you follow all of these tips, you will be ready to rent out your property and create a second income stream.
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This content is made possible by Larry Alton.
Photo credit: Shutterstock
