Steps to Take Before Renting Out Your Home
With life as it is right now, we could all use a little extra cash on hand. Perhaps, you have a second home that you’re considering renting out, or you’re just interested in entering the rental property game. It may seem like an easy thing to get into, but there are a few essential steps to take to ensure you do this the right way. Keep reading to learn a few of those steps you should know before jumping into the rental property world.
Understand the Responsibility Involved
First and foremost, you have to determine whether being a landlord is an obligation you can handle. Renting out your property brings many benefits, such as the ability to deter vandalisms on an empty home, the ease of tax breaks and the ability to generate an additional income to help cover the bills and turn your property profitable.
All that said, being a landlord requires much more room in your life for the time and responsibility that it takes. You’ll need to stay on top of repairs and maintenance, collect rent, keep an eye on your tenant to avoid wear and tear on your property, and much more.
Prepare Your Property
Similar to potential home buyers, potential tenants are looking for a home that they can enjoy living in. This means that you should focus on fixing up or updating your property before listing it for rent. By doing so, potential tenants will be impressed with the new features your home has to offer and be more likely to rent from you.
Once you have a new tenant, you should prepare your property by thoroughly cleaning it from top to bottom – this step is especially vital during today's life amidst COVID-19. Additionally, you should check that all appliances are working and in good condition to avoid a late-night call from your tenant claiming the dishwasher is broken.
Screen Your Tenants
As a prospective landlord, you should gather certain information about a tenant before offering to rent out your house to a stranger. Your best tool for this is a comprehensive rental application form. Gather past and present employers, along with a list of any former landlords. Request contact information for each of these individuals and let your prospective tenant(s) know that you’ll be reaching out to them. Lastly, pin down the tenants’ income(s) in addition to their credit scores to make sure they have the proper funds to pay for rent and other costs.
Look into a Property Management Company
If life as a landlord sounds a little too daunting, you might want to consider partnering with a professional management company. Management companies can typically charge anywhere from 8-12% of the monthly rent with an average of about 10% for single-family residences. This may seem like a lot to give up but considering that these businesses will do all the work for you, that small percentage could be worth it to avoid the headaches a landlord would endure.
“Most management companies will also conduct periodic property inspections and handle repair issues. They'll deal with companion pets and the law. In fact, they'll be familiar with all the laws that must be followed in your area, as well as with any city fees that must be paid.” – The Balance
Invest in Marketing
Once your home is fixed up and ready to be listed, you’ll need to start marketing it. Have pictures taken and put together a list describing what makes your property so appealing – take note of those commonly desirable features like a washer and dryer, a garage, pool, etc. Once you’re ready to start marketing your property, consider hiring a Points West real estate agent! Our agents are ready to work with you and help find the perfect tenant to rent out your home! Visit our Contact page or give us a call at (817) 717-6036 to learn more.