Things to Know Before Renting Out a House
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Most people rent houses because it allows them to save money before buying their own. If you have ever considered to rent out houses to earn extra income, then you are on the right track. Have you asked yourself, “Should I rent my house out?” Learn about the basics of property management before you dive into it.
Setting Prices
Before you rent out your home, check online listings and offline resources such as rental signs in the neighborhood to get an idea of the amount you need to charge. The rate needs to be similar to the ones available in the market.
Landlords only rent out houses that are in good shape to increase the value of the property. Doing house repairs is one of the things to know before renting out a house or even when selling it, as it can make your property a good choice in the housing market.
Issuing Leases
Abiding by the law is a good practice as you learn how to rent out your house. A written lease will allow you to protect your rights as well as the rights of your potential tenant. Being aware of the rights and obligations of both parties will help you to align your practices to the local laws on housing and rentals.
Refrain from using sample leases that can be downloaded from the internet because the text in these documents may not be suited in your region. The lease needs to indicate the following essentials:
- lease term;
- security deposit;
- due date;
- penalties for the rental;
- repairs, routine, and maintenance responsibilities;
- names of tenants;
- housing rules;
- policies and deposits;
- homeowner association rules and dues;
- arrangements for ocular viewing; and
- eviction terms.
Hiring a Property Manager
By now you may have decided, “Okay, I’ll rent my house out.”
Will you be able to handle all the tasks involved on your own? Planning for house construction isn’t an easy task and the same way goes for property management. Hiring property managers is a great choice as you rent out your home. A property management company or service will primarily cover landlord responsibilities such as finding and screening tenants and managing your property.
Other tasks included in the service are the collection of payments and late dues, repair management, and settlement of issues such as evictions and early vacancies. Check the website of the National Association of Residential Property Managers (NARPM) to look for a licensed property manager in your area. You might also want to check with your real estate agent if property management services are available.
Advertising
Before hiring professional services, you may start the groundwork on how to rent out your house by doing some advertising on your own. Advertising is one of the things to know before renting out a house. Maximize word-of-mouth advertising by sharing your announcement with friends, workmates, and relatives.
Create an application form that potential tenants need to fill in, and ask for social security numbers and a signed authorization letter to allow you to do background checks on credit and criminal records. Reaching out to employers, previous landlords, and other references will be of great use. You can also hire a Better Business Bureau-accredited online agency to do the work on your behalf.
Buying Insurance and Using Legal Services
Your house isn’t just used for primary residence but also for business so having an insurance policy is important before you learn how to rent out a house. After decluttering for a house move, tenants need to consider insurance while renting a house. Recommending tenants to purchase an insurance policy is important to avoid being held liable for their belongings.
When using leases, choose a local lawyer who is knowledgeable in helping you abide by the law, as the laws vary across cities and states. Evicting a tenant also requires the services of an attorney especially when the tenant refuses to vacate the premises.
Avoid moving tenants’ belongings and kicking them out without going to the courts. Evicting tenants who are difficult to talk to can cost you around 300 to 1000 USD for the legal fees. Using legal services can also help you get title insurance when you’re considering buying a foreclosed home.
Now that you are aware of the things to know before renting out a house, it’s time for you to make your house suitable for rental to cater to those people who are on the lookout for renting a house. Knowing how to rent out a house can lead you to good long-term business as well as help tenants save money moving into your property.