So you’ve decided that instead of selling your home you want to turn it into rental property but simply putting a for rent sign in the front yard is not enough. Here are a few items to consider before opening your door to renters. Learn your states landlord/tenant laws. Every state offers protections for both tenant and landlord, it’s vital that you know and understand both sides. Is your area zoned for rental? Of course it’s wise to find out if you can even rent before you go to the trouble of getting anything else done on your list. Your city government, homeowners or condo association or board will have the answers for you. Once you’ve obtained this information you can now begin to focus on the mechanics of getting you home ready to rent. What kind of rent can you get? A rule of thumb is the lower the house appraisal value, the higher percentage of rent-to-value you can expect to get, and vice versa. Another consideration is what similar home rentals in your area are going for. Also take into account your location, rentals near schools, shopping centers and those with easy access to freeways and main streets have proven to be successful. A complete home inspection now, means you sleep better later. Spend the dollars and have a certified home inspector do a thorough inspection of your property. The small things you may not notice will be easily found by an experienced professional and can save you serious problems down the road. Will you be an absentee landlord? If you’re not going to be available in person it essential you have a manager that is reliable, honest and trustworthy. This may be the Boy Scout motto but it can be a lifesaver to you. If you can’t be there you will need someone who can handle problems with the house or the renter and make decisions in an emergency if you cannot be reached. Become a lease expert. Although there is no standard lease, several items should be considered when writing a lease including: - Amount and schedule of rental payments
- Term of lease
- Renewal and termination of the lease
- Required deposits
- Miscellaneous fees
- Utility payments
- Repairs and maintenance
- Restrictions on use of property, including subletting.
- Landlord inspection
- Liability insurance
- Death of landlord or tenant
Again seek the help of a professional; in this case a lawyer, to make sure you’ve covered your legal bases. Are you renting to the tenant from hell? Check your tenants. It’s not obtrusive to ask for references or at a minimum you should call their previous landlords. A background check is wise as is a credit check because the last thing you need is a rent check that you can play basketball with. Make yourself accessible. Even if you are the absentee landlord it’s in your best interest to establish contact with your tenants and leave them contact information should they need to get in touch with you. Of course you’ll want to establish ground rules for contacting you including the chain of command so your property manager is in the loop if an issue arises. Rental property has long been a successful enterprise for those willing to make the effort to provide a safe, comfortable home for their tenants. If you take the time to properly prepare your home, protect yourself legally and screen your tenants you too will enjoy the rewards of being a landlord. Mark Stone writes for FindHomeRentals.com a website that lists houses for rent throughout the United States.
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