As a property owner, renting out a house is always your number one priority. But, before you get to that point, there are some basic guidelines you should follow. If you are renting your house, do these 7 things first.
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To find quality residents, here are 7 tips to follow:
While many of these considerations may seem like common sense, a lot of the time, common sense is not always common practice. So, as a property owner, you are encouraged to knock these things out before renting your house. If you do this, you should be ready to rent!
The first thing is to make sure you have good landlord insurance. Landlord insurance is a separate form of insurance from typical homeowner’s insurance. This type of insurance will protect you, as a landlord, from certain things that ordinary homeowners wouldn’t.
Landlord insurance will protect you against lawsuits, any kind of liability, or damage that someone could potentially pin on your property. It will also help protect you against any damage caused by the resident.
To make sure you are getting the correct type of insurance specific to your home, reach out to your regular insurance provider. They will be able to help you get landlord insurance and answer particular questions.
You could even suggest that the resident get renters insurance. This way, they will be covered in case of lost property. While not all landlords require renters insurance, it could be an added requirement that is beneficial to them.
The next thing you want to do is you want to find a good accountant. That’s right. Being an owner means you have entered the business world. When you start collecting money and providing a service or a product, which is your house, then you’re in business.
You need to make sure that you are following the proper requirements to report everything to the government. All the income needs to be tracked as well as expenses. If you are not financially minded in that realm, you want to find a CPA. One that can help you and explain to you where numbers are coming from.
If you already have a CPA you work with, maybe for other things, then have that conversation before renting. Ask them if there is anything you need to be aware of and help you get started.
The third thing you’re going to want to do is get an attorney to look over your lease agreement to make sure everything is in line and you have covered all of your bases.
It would be great to get them to take a look at it and give any kind of feedback or suggestions. It is best recommended to find an attorney that deals specifically with real estate law. You mustn’t just go online and grab the first lease agreement you find. You want to make sure that your lease will be specific to your property.
No matter how confident you feel in the lease agreement you have created, it is always a good idea to have an attorney look over your lease agreement, especially any time you make any changes to it.
The next thing you will want to do is establish screening criteria that include specific criteria while also making sure there is no discrimination. It is essential not to break any kind of landlord or resident law.
Now is also an excellent time for you to decide on a rent price. While you might be tempted to set your rent high, you’ll only make the process of finding a resident more difficult for yourself. You want to keep your rent competitive without undervaluing your home. As a rule of thumb, your rent should be a maximum of 2.5% to 3% of the capital value of your home.
Next, you want to get all of your paperwork ready, including what kind of questions you will ask on the application and an example of your application. You should check what you can and cannot ask by looking at resident and landlord laws. Be very careful there. It is easy to miss something that could end up being very important.
You will also have move-in documents, receipts to give the resident when they pay rent, and move-out documents. Essentially, you’ll want to gather any document associated with the resident moving in, living in the property, and moving out.
Once your paperwork is organized, you know that you are ready to list your home for rent. Today, finding a resident has become a quick process. You can quickly and easily list your home on online sites and get hits almost immediately. If you don’t have the time to manage listing yourself, consider working with a real estate agent.
You always want to be mindful in taking care of even the small things in your house. The resident will notice if you pay attention to the details. If you take care of it, you are more likely to have a better relationship with the resident, which can benefit both of you in the long run.
To create your punch list, walk through your house and list all the different things that need to be taken care of before the resident moves in. This list will serve you well because when a resident comes to look at the property and see things that need to be fixed, they will be less likely to rent from you. It will make a strong impression on them if you pay attention to detail.
The last thing you want is for a resident to move in and find several minor issues. You should always perform a walk-through a few days before the resident moves in. Check the small things that some people may not even think about, like the garbage disposal, every light in the house, making sure hot and cold water are coming out of the faucet, and that every toilet flushes properly.
Make sure the carpets are clean and the home is free of any debris. No resident wants to move in and find old boxes sitting around. Have the mindset of showing your home. It should be clean and ready to rent when residents come to view the property.
It will be different if you are showing a home that comes fully furnished. Although, it should still be spotless, and the furniture should be in good shape.
Not only should you pay attention to the interior but also the landscaping. Cutting the grass and pulling the weeds can make a big difference. Remember that the initial impression someone makes when they first drive up to the property is very important.
Renting out a house can be a lengthy process, and a lot of the time, homeowners are looking to fill vacancies quickly. But, it’s crucial to invest the time in finding quality residents. It will pay off in the long run.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.
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