Renting out a home you own can provide you with extra income or help you financially during a transitional time in your life. But, being a landlord comes with responsibilities, both legal and practical. Before running an ad and putting up a “for rent” sign, you should think about a few important issues.
What to Think About Before Renting Out Your Home: Determine How Much to Charge
Ideally, the monthly rent should pay your expenses with a good margin of profit. Even if you own the house free and clear, you will have expenses such as taxes, insurance, and maintenance. You’ll want to put some aside in case any major issues come up, such as a broken furnace or leaky roof.
You should also consider the rental market in your area. Find out what similar properties are renting for and evaluate what the demand for rentals might be in your neighborhood. The amenities you offer will also figure in; a house with a garage will rent for more than one without.
As the homeowner, you want to protect your property and yourself from any issues that may occur because of problem tenants. It’s important to determine whether your renters will be able to pay the rent and take care of the home. You also want to avoid any criminal activity on your property.
Creating a screening process is critical for choosing quality tenants. Ask prospective renters to complete an application listing their employment information, previous address, and references. You can run a background check and credit history.
What to Think About Before Renting Out Your Home: Create a Rental Agreement
A rental agreement will inform your renters of your expectations for living in the home. You can specify the rental time period, how many people can occupy the premises, and any financial matters, such as who pays utilities or what happens to the deposit when the tenant moves out.
The rental agreement can also state policies covering pets, changes to the home (like painting or carpeting), yard maintenance, and so on. You can find rental agreement templates online, but if you have specific concerns, you should consult an attorney.
Renting out a home can be an easy way to earn (almost) passive income. However, it can also be a headache if you don’t prepare properly. It’s worth your time and trouble to look for tenants who will pay their rent on time and treat your home as if it’s their own.
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Steelbridge Realty LLC is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.