There may be a few reasons why you are considering renting out your home. Perhaps it was bought as an investment and its time to start making money off the purchase, or maybe its time for your family to expand and you are looking for some more space to make that happen. Whatever may be prompting you to list your home for rent, consider these tips first:
- Understand what it takes to be someone’s landlord. You will be taking on a large responsibility when you rent out your property. You will essentially be responsible for many aspects of the home without actually living in it, like repairs to major appliances. Make sure you have the time to dedicate yourself to the maintenance of a second property. Repairs need to be handled quickly so that minimal interruption occurs to your renter’s. There also may come a time when you will need to ask a tenant to leave because they are not fulfilling their end of the agreement, be sure you are ready to take on an authoritative role and that you have the time to follow through accordingly.
- Tennant Research and Verification. You want to ensure that the property you are using for a source of income is properly maintained. Be sure to verify your renters have a clean background – no prior evictions or breaking their lease. You can also put yourself at ease, and neighbors, by checking for a criminal background as well. Meet with any potential renters and make sure you think they will be a good fit for your home and easy for you to communicate with should you ever need to.
- Know Your Rights. Renter horror stories are out there, and you don’t want to fall victim to one of those situations, like having a tenant who won’t leave the property due to non-payment. Eviction and other landlord-tenant laws can vary from state to state, so it is important to check with an attorney who is familiar with that area of the law to know and understand all of your rights and obligations as a landlord. It can also be beneficial to make sure you are using the correct legal documents for rental agreements.
- Budget for Two. In the event your space does not immediately let, or you have a renter who falls behind on their rent – you will need to be able to cover the payments to the bank in order to keep the rental property. That’s a payment in addition to the costs associated with your primary residence. Don’t forget any homeowner’s associate fees, property tax, included utilities, or insurance premiums either!
- Protect Yourself and Your Renters with Insurance. Check with your independent insurance agent at Magruder to see what type of coverage may be included in your homeowner’s policy for a property you are renting out. You may need to expand coverage or add landlord’s insurance coverage to fully protect yourself against tenant liability. You should also decide if renter’s insurance will be a requirement before a tenant moves in.