People choose to rent their homes for a variety of reasons. Maybe they were temporarily relocated by their employer or their relocation was so fast, they didn’t have time to sell. When the housing market crashed, a new wave of landlords emerged. Many people found themselves upside down in their homes, but needed to move anyways. Instead of taking a loss, they rented their homes to wait for the market to rebound.
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If you think that renting is as easy as sticking a “For Rent” sign in the front yard, you’re wrong. Many new landlords choose to have a realtor or property management company handle these tasks for them, but there are many who choose to do it on their own. For those of you who want to rent out your property, we have a few tips that will help you along the way:
Know The Rules & Ask Questions
Go to your town and see what rules and regulations you need to obey by as a landlord. Check to see if you need to have a business license or if the zoning officer needs to complete an inspection to make sure that your property is up to code. Speak with your insurance company to switch your policy to a landlord policy. Contact your mortgage company to see if there are any stipulations if you have tenants. Also, speak with an accountant to see how you should run your rental. You can have it structured as a business or count the rental income as personal income.
Check Your Renter
Are you doing background checking on your tenants? Are you gathering references with their application? All renters should be prescreened. Check references for past apartments or rental houses to see if they had any issues or damaged their property in any way.
Get it in Writing
Some people think that renting to friends or family is the ideal situation. Even if you know or trust your renters, you should still be using a rental contract. A rental contract protects you and the renter. Make sure that you have everything in writing before they move in. Specify who pays what and what maintenance they are responsible for (like mowing the grass). You must have set procedures in place if they have to break the lease or if you would sell the property while they are renting.
Check in From Time to Time
Most renters will take good care of your property; however, it doesn’t hurt to check in with your tenants to see if anything needs repair. Drive by (or have someone else) to make sure that your property is being properly maintained from the outside. Some property management can even hold yearly (or quarterly) inspections for you for a fee.
Keep Your Receipts
Anything money you spend on your rental property should be documented. Did you know that repairs, taxes, mortgage interest and insurances are tax deductible? Contact your tax professional to see exactly what expenses you can write off.
A rental property can be a great source of income or a total nightmare. You can protect your property and yourself by making sure that you have good tenants from the start. By taking time and following the tips above, you can have a successful rental property. Have you ever thought about renting your home or have some tips for us? Share it below!
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