Are you considering dipping your toes in the rental home pool? Here are some things you should consider before diving in.
- Understanding the responsibility that is involved- The benefits of owning a rental home can be many. Such as offsetting monthly expenses, tax benefits and building equity in your home. However, Becoming a landlord is another responsibility you will need to fit into your life, and regardless of how well you plan, things may not always run smoothly. You will need to collect rent, make sure that your tenant is treating your home with care, stay on top of repairs, fill vacancies and anything else that may come up.
- Preparing your home for rental- you will need to make sure your home is in tip top shape to attract the best tenants. Trying to rent your home as is can be a huge mistake. Make sure that the home is painted (neutral colors a plus), flooring is in great shape, all appliances are running smoothly and that the landscaping is well maintained. The more appealing you make your home, the better chances of getting a long term, responsible tenant.
- Marketing your home- Make sure you have high quality pictures for your advertisement. People are visual and poor pictures will lessen the amount of showings that you receive. Be sure to list all of the positives of your home. Keywords such as “granite”, “state of the art”, “stainless steel appliances”, “backs up to open space” if applicable will help you get more tenant leads. Also, make sure you include any amenities associated with the property, such as access to a community pool or tennis courts. Make sure to price your home comparable to what is currently on the market. Studying similar rentals on Zillow, Craigslist and Rentals.com is helpful to achieve this.
- Screening your tenants- This will be the most important aspect of renting your home. A bad tenant can make your life miserable. Never take anyone at face value no matter how well they present themselves. Make sure you perform extensive background checks, check previous rental history and verify employment and income.
- Consider hiring a professional-renting your home may seem like it will be easy but there are many laws that you will need to follow locally and federally. A property manager will be familiar with the ordinances and will have an extensive lease that will help protect you and your home. They are also experienced with screening tenants and setting appropriate rental prices and security deposits.
The bottom line-renting your home can be lucrative but only if you are very careful to address the potential pitfalls that can arise. A pound of prevention is better than any cure. Good luck!