After weighing the pros and cons of selling your home or renting it out, you may have decided that renting is the most profitable solution in your situation. If that’s the case, these tips can offer some great suggestions for getting started and what you should consider before renting.
Preparing the Property
Inspect the home for repair and safety issues. Check for plumbing leaks, the condition of the roof, clogged gutters and driveway safety concerns.
Clean the home from top to bottom. Mop floors, shampoo carpeting, clean windows and window treatments.
Make needed repairs throughout the home and replace faulty appliances. Repaint the interior, so the home looks well cared for and is ready for renters.
You’ll need to decide whether you have the time and energy to manage your rental yourself or whether you prefer to hire property management services.
Property management companies are usually responsible for screening tenants, collecting rent, making repairs and dealing with evictions. Services of this type may run anywhere from 4 percent to 12 percent of monthly rental charges.
Keep a list of names and numbers for contractors, plumbers and handymen in the event of problems or emergencies.
• Contact the city and state departments to learn about the requirements for rentals in your city. Some cities may require rental property inspections and licensing.
• Always draw up a written lease to protect your rights as well as tenants.
• Learn how evictions are handled according to your state’s termination statutes.
• Notify your mortgage company that you’re renting your home. Some banks may have specific landlord requirements that must be met.
• Let your insurance agency know that the home is now a rental, and make the necessary coverage changes to landlord insurance.
• Become familiar with landlord-tenant laws in your state, especially when drafting a lease.
Tenant Verification Screening
Screening tenants may be a lengthy process, but the benefits of finding qualified renters out way troublesome renters, skipped rent payments and broken leases.
Make sure potential renters view a copy of the lease with the terms for monthly payments, deposits and the length of the contract before applying. This can save time and eliminate potential renters who wouldn’t qualify or can’t afford the rent.
Have potential renters fill out a copy of your rental application with their full name, Social Security number, current address, date of birth, income, employment history, rental history and a few personal references.
Credit Check on the Tenant Applicant
After verifying the information on the rental application checks out okay, you should run a credit check on the tenant. Contact one or more of the main credit bureaus to request a copy of the applicant’s credit history. Review the history to determine if the applicant pays their bills on time or has a poor credit history.
As part of the tenant verification screening process, if you have doubts about the applicant, you might want to consider paying for a criminal background check on a prospective tenant.
Determining Rental Charges
Use the Internet and classifieds to compare what other similar rental properties in the area are charging. Make sure you take into account your monthly mortgage amount, taxes, insurance and property maintenance costs to get a realistic amount.
Advertising for Tenants
Advertise the rental in the local newspaper, and place rental signs in the yard. Utilize Internet classifieds to advertise and make sure you highlight the best features of the home, rent and location.
Before renting your home, tend to all the legal considerations, and take the time to screen potential renters carefully.