There may be a few reasons you are considering renting out your home. Perhaps it was bought as an investment and it’s time to make money off the purchase, or maybe it’s 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:
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. 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.
You want to ensure that the property you are using as a source of income is properly maintained and is being rented to someone who is likely to pay their rent on time. Be sure to verify your renters have a clean background—no prior evictions or breaking their lease, as these can be signs your prospective renter could do the same to you. 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.
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 because of 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 help you understand all 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.
In the event your space does not immediately let, or you have a renter who falls behind on their rent, you will need 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 association fees, property tax, included utilities, or insurance premiums either!
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.
Speak with an independently licensed home insurance agent to discuss all of your questions about home and renters' insurance policies.