So, you own a home that isn’t selling, or something else is keeping you from selling it, but you still want to add some extra money to your budget. Renting out is a reasonable option many homeowners who won’t or can’t sell choose. Although renting out your home or a part of your home is a relatively easy way to earn extra cash, not everyone is capable of doing so. There are several things you should take into consideration before putting your home on the market as a rental property.
Determine whether your home is ready to rent
In order to rent out your home and make money out of it, it needs to be appealing to potential tenants. You need to analyze your area and all the other rentals in it. Is the demand in your location low or high? What are the home features tenants are interested in and does your home meet the common criteria? Find an agent who can offer valuable advice on this subject and help you determine whether your property can become a rental.
Know the law before renting out your home
Renting out property has to be done in accordance with the law. If terms like real estate law, tenancy agreement to inspections, terminations and rent collection don’t sound familiar enough, do your homework. Furthermore, you need to do research on the relevant tax codes, federal, state, and local housing laws, as well as real estate investors’ rights and obligations. A professional can help you do everything in a legal manner, so don’t be shy to ask for legal advice before renting out your home.
Calculate the costs associated with renting out a home
First of all, you need to know the costs of real estate investing in your local market. Advertizing, maintenance, taxes and insurance are just some of the costs of investing in rental real estate. A real estate market analysis can help you estimate the costs of investing in your market with accuracy. This type of analysis will also help you determine how much rent to charge. To get an idea of how much other landlords charge, check online resources and local newspapers. The most important thing when setting your rent is to be realistic. Once you calculate how much you can lose and gain in the process, you’ll know whether renting out your home pays off.
How to prepare your home for renting
- First, you need to inspect your home and detect problems that need fixing. Roof leaks and clogged gutters aren’t something potential tenants will ignore for very long. Take safety risks into consideration as well. In case of an accident, the responsibility may be yours.
- Eliminate all personal belongings, such as family photos, before showing your property. This way, renters won’t feel like they’re intruding someone else’s home. You can find reusable packing supplies for your move to save some money.
- Determine whether you want to rent a furnished home or not. Perhaps you want to remove all or some of your furniture.
- Eliminate everything that is broken or unnecessary. De-cluttering will make your home look neat and spacious.
- If you have no other place to put your stuff, use specialized bins for storing your belongings and rent a storage unit nearby.
- Clean up the entire home, including the appliances and furnishings.
How to find tenants before renting out your home
Having good, responsible tenants is the most important factor in succeeding as a landlord. Renting to family and friends is not something we would recommend. Local newspapers and websites, especially social media, can help you find your tenants. Moreover, no matter how much you need that rental income, you should be very patient when choosing your tenants. Consider to whom you are renting out your property, not only when they can move in. Talk to your applicants’ previous landlords (even employers) and check things like their criminal history and credit reports.