You have a property that you aren’t quite ready to sell, and you want to turn it into an investment for you. Renting out the property is a fantastic idea, as long as you are willing to understand what it takes to become a landlord, and you know where to find the right help when needed. If you are thinking of becoming a landlord and renting out your property, the information that follows can help to put you on the right path, so you have the best chance for success.
When you are renting out a property, it is not a hobby or something that you are able to do on the side when you fell like it. You need to treat your rentals as you would any business venture. You need to take things seriously during every step – from getting the property ready, marketing, finding renters, signing leases, collecting rent and taking care of issues on the property.
As a part of running your rental like a business, you need to set your business hours. These are the hours when your tenant can contact you, or your regular office hours. However, if there is an emergency, make sure they have a way to get in touch, so you can take care of things.
Ideally, you will have an attorney draw up the lease for you. However, if you utilize one of the online leases that are available, it is still a good idea to have an attorney look it over to make sure it is legal, and that it has provisions in place to protect you, your property, and the tenants. Once you have a proper lease in place, you can then begin to market your property and look for tenants.
One of the great things about renting a property is that you will often have no shortage of potential renters, as long as you have made sure the property is in good shape and you are charging a fair rent – more on this later. However, just because you have a lot of tenants who are interested in the property does not mean they are all a good fit for you. It is essential that you screen the tenants, or hire someone to do the screening for you.
You want to have a background check and a credit check run on the tenants, and you want to make sure they have an income that is at least three times the cost of the rent each month. The more you know about the tenants the better. However, this does not mean you should rent to family and friends. When you rent to people you know, they may expect preferential treatment, which you cannot give. Remember, you have to treat this like a business.
One of the biggest questions you will have to answer as a landlord is how much you are going to charge for rent. It is one of the first things people want to know when they are checking out a property, and you will need to include the rent in your marketing and listings. You can’t simply come up with a figure off the top of your head, and you can’t base it off the mortgage you are paying.
The reason you can’t base if off the mortgage is because the going rate for rent for comparable properties in the area might be different from what you are paying for your mortgage. For example, if the rent were $1,200 for other similar homes in the area, and you try to charge $1,600 for rent, you are going to have a very hard time finding people who are willing to pay that amount. They know that the going rate is less.
Of course, the opposite is true, as well. If the going rate is $1,200, but you are only paying $1,000 for the mortgage, you would be missing out if you only charged $1,000. Take the time to look up the comparable properties in the area to see what the going rate is and then try to make your rent as close as possible to that number.
You need to make sure the property is ready to accept tenants, as well. This means making sure everything is in proper working order, the lights are working, the plumbing is in good shape and there is nothing that will give the tenants a nasty surprise once they move into the place. If there are issues, take care of them.
You need to have the property professionally cleaned and at the point where you can accept renters. While you can clean the home on your own, you might find it faster and easier to have the professionals take care of this for you.
While you might like the idea of being a landlord and collecting rent, you might not have enough time to take care of all of the issues involved with this endeavor. Fortunately, you do not have to do things alone. You can always work with a professional property management company.
They charge a fee for their services, but most who use property management companies believe the price is well worth it. They can take care of finding and screening tenants, dealing with problem tenants, getting the property ready, and all of the other things you do not want to do.
As you can see, being a landlord takes quite a bit of work, but it is certainly possible for just about anyone to do, especially when you have a property management company helping. If you aren’t ready to sell your home and you want to see how it could work as an investment, seriously consider becoming a landlord.
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