Becoming a landlord is a serious decision; however, you may have no choice. If you are forced to move due to life circumstances or a career opportunity and have had no luck selling your home, renting it could be the only viable financial move.
Follow the Law
The first step is to find out if it is legal to rent your home. If you are in a deed-restricted neighborhood, check with your homeowner’s association. Also check municipal laws, because renting may be forbidden in certain areas, or there may be strict rules you need to follow.
Make All Necessary Repairs
You are taking on a landlord’s responsibility for providing a healthy, safe structure for your tenants. Plumbing and electrical must be in good working condition, and the roof must have no leaks. Have your heating and air conditioning serviced, and have a pest inspection. Most states require smoke detectors and a fire extinguisher for the kitchen and upstairs. To be on the safe side, also install a CO2 detector.
Clean and Freshen the Home
Cleanliness is essential to attract the best renters. All rooms should be freshly painted. The outside must be clean and the yard tidy. If you have lingering odors from smoking or pets, have a professional cleaning company deodorize your home. If you are providing window blinds or appliances, have them clean and in good working orders.
Remove Any Valuables
If you have valuable fixtures in your home, it’s best to replace them with standard units. Even if you are renting the home furnished, it’s best to remove anything you don’t want damaged, such as antique furniture or expensive rugs. Never leave personal items or paperwork, even in a safe.
Determine the Rent
This can be a tricky calculation. First, research rents for comparable properties in your area. Overcharging will scare off renters, but undercharging may leave you without enough money for expenses. In addition to charging enough to cover mortgage, insurance and taxes, you need to add 25 percent to set aside for repairs and maintenance. If all of this puts the rent above fair market value, you may have to resign yourself to covering part of your mortgage payment until the house can be sold.
Decide Who Will Manage the Property
If you can afford it, it’s sometimes best to let a professional handle your property, especially if you are moving out of state. For about 10 percent of the monthly rent, you can save yourself time, which can translate into money. At the very least, you will not have the hassle of dealing with repairs, maintenance or a difficult tenant. This is also recommended if you think you would be too soft on removing non-paying tenants.
Renting your home can be a good move and you may even earn a small profit. Doing your research is first and foremost in deciding if becoming a landlord is right for you. If it all seems like too much to handle, it may be wise to hire a professional rental management company.