Many people are drawn to the idea of making some extra income from renting out their home or second investment property. While being a landlord can be a great source of income, it can also be very challenging, especially if you don’t have experience screening potential tenants, writing lease agreements, and following rental laws. This week, we’ve outlined everything you need to know before renting out your home.
Have a Good Lease Agreement
Writing a good lease agreement is one of the most important steps you can take to prepare for renting your home. It ensures that both you and any tenants clearly understand all rights and responsibilities associated with the rental. In addition, a good lease should align with local fair housing, tenant, and rental rules and regulations. Almost all lease agreements have due dates for rent, term dates, pet policies, repair responsibilities, and eviction terms. There are many lease templates available online, but make sure whichever one you settle on is reviewed by a lawyer.
Going paperless makes life easier, especially when it comes to important records. Whether for maintenance requests, deposit receipts, or day-to-day communication between you and your tenants, keeping a digital record will help you securely keep your ducks in a row while avoiding the clutter of keeping dozens of piles of paper lying around.
Keeping rent payments online can also make things easier for landlords and tenants. Rather than collecting checks, cashing them, and making sure they don’t bounce, you can make everyone’s life easier by creating an online payment portal for your tenants.
Know The Law
Being knowledgeable about real estate law in your state is essential when you want to become a landlord. There are likely state and local housing laws that you should become very familiar with to avoid legal trouble. For starters, make sure that the law in your municipality allows you to rent out your home. There are essential rules to follow regarding residential tenant’s rights, inspections, collection of rent, and much more. It would also be in your best interest to consult a financial advisor to ensure you comply with any tax codes.
Be Aware of ALL of the Costs
Just because you’re renting out your home doesn’t mean that you can suddenly expect an influx of disposable income. Taxes, insurance, property maintenance, and management are all common expenses associated with renting out your property. Working with an experienced real estate agent will help you get a better picture of the financial gains and costs you can expect with a rental.
Be prepared to be on call to deal with any tenants’ issues or outsource the responsibility to somebody else. A lot can go wrong with a rental property, and proper management will require time, effort, organization, and attention to detail. Hiring a property manager is an excellent option if you’re looking to rent out a home without the hassle. The average property manager takes on the responsibility of keeping your rental habitable, dealing with tenant issues, and collecting rent payments. If you’re concerned about becoming overwhelmed with the responsibilities of being a landlord, hire someone who will do a great job at it for you.
Being a landlord can be stressful and time-consuming. However, If you prepare yourself, it can be a profitable and rewarding investment. Are you looking to take the first step towards renting out your home? Have questions about the responsibilities that come with it? Contact us today! One of our agents would be happy to help.