Renting out a house is not a direct process. It involves steps and procedures that must be followed, laws and regulations to understand, and costs to factor in.
Below are the essential things to do before buying investment property of renting out your home:
Find a Great Tenant
Sure, you can advertise on social websites and marketplace exchanges for tenants. But how do you know if they’re great tenants? Or even good tenants? A lot goes into vetting a tenant, including credit reports, past rental history, and employment status.
Decide How Much Rent to Charge
Before renting out your house, you must have determined the amount of money your tenant will pay. Your rent must be comparable to what is obtainable in the market for you to find a tenant. But there is more to factor in besides just covering your mortgage. You need to set aside funds for maintenance and turnover, repairing damages, insurance, and a host of other costs.
Protect Your Rights with a Lease
It is vital that you spell out the rights and obligations of each party through a well-written lease. A good contract will be in agreement with the rental, fair housing, tenant, and insurance laws of your locality. Note that these laws differ across cities, counties, and states.
Protect Your Property with Insurance
If you are renting out your house, an insurance policy is of paramount importance. When renting out your property, the policy differs from the one you need when using the house as your primary residence. This policy covers liability, legal costs, home structure, and loss of rental income.
Hire a Management Company
We know that it is advisable for property owners to hire a property manager. Having a manager allows you to avoid getting emotionally involved with the tenants. A management company handles vetting potential tenants, advertising the property, dealing with maintenance issues, holding the deposit in escrow, turning the property between renters, and a host of other tasks most property owners don’t have the time to deal with.
Are you planning to become a landlord? Talk to us first. Let us give you a fair assessment of the rental value of your property and create a plan to find you a great tenant. Check out what we offer here.