5 Things to Do Before You Rent Out Your Home

It’s difficult to predict the housing market. If you’ve had your home listed for sale for several months and it’s not selling, perhaps the best solution is to rent it out. If this is the case, there are several things you need to do before you rent out your home.

These tips will help protect your property from a number of issues that could potentially arise when you put it for lease:

 

  1. Find Out How Much You Can Reasonably Charge

How much is your mortgage? Whatever that amount is, you’ll hopefully be able to make a profit—but within reason of what similar places are renting for in the area. So you’ll have to do some homework and check the going rent rates (you can observe online resources, newspapers or even speak to a realtor).

 

  1. Do Thorough Background Checks When Selecting a Tenant

Finding a good tenant can be quite a grueling process if you aren’t careful. After all, your home is being publically advertised across multiple channels. Nearly anyone can come view the property and leave an application (this is why it’s a good reason to have a home security system in place).

Don’t pick just any tenant—do your homework and do a background check. After they have provided their basic information (such as name, employment/salary info, references, social security number, etc.), get their credit report, check to see if they have a criminal history and contact their provided references.

 

  1. Get Rental Home Insurance

You have to protect your property, which is why it’s essential to purchase rental home insurance. It covers structural damage done by tenants, legal costs and medical expenses.

You can advise your tenant to purchase renter’s insurance, since their physical possessions won’t be covered by your rental home insurance. They’ll need their own policy if they want to be insured.

 

  1. Get a Management Company to Manage Your Property

The good thing about having a rental property is that you don’t HAVE to do everything yourself. You can hire a management company to do things such as collect the rent and handle repairs. If things go south with the tenant, the management company can charge them late fees on their rent payments and even give eviction notices.

 

  1. Make Sure Your Lease Is Thorough and Reviewed By a Lawyer

You don’t want any surprises, which is why you need to directly state all expectations clearly and plainly on the lease. Include things such as what the tenant is responsible for, whether pets are permitted, how many people are allowed to live in the rental, what is prohibited, what the designated areas for parking are, etc. These are essential in creating the terms of the lease. Have a lawyer review it to make sure it’s ironclad.

Leave a Reply

Your email address will not be published. Required fields are marked *