Becoming a landlord and renting out your house is a good investment. Many people want to do this because it yields extra income. But it takes some time to educate oneself about the process of renting out your house. Many have this question about the risks of owning rental property and how to eliminate them. Here are some steps that will guide you to successfully rent your house:
1. Plan financially:
Many people who decide to rent out their houses need to do a lot of planning especially financially. There may be many expenses to be kept in mind. Some money must be kept aside for mortgage payment, regular maintenance, insurance, property taxes, repairs, and upgrades. There may be some profit every month while renting out but one has to look into the local housing market to check whether it’s worth it.
2. Deciding the rental rate:
Before deciding on the rent, it is important to engage in some research. One can go around the neighborhood and contact the numbers on the signs that are mentioned: “For Rent”. Research can also be done online by searching for local apartment listings on many websites available to collect data regarding the rent. Hence by comparing the quality of the housing and amenities available, rent can be determined. One should also have in mind that the rent should not be high because there may be difficulty in finding tenants and there will also be competitors. To know the current rental scenario, get in touch with realtors Lincoln.
3. Repairs and upgrades:
To make your rental home more attractive to the tenants, make sure it is in a good condition. Fixing the places that need to be repaired or upgraded is very important. The rental should be safe and everything must be in working condition. Also, make sure that the rental is not over-personalized and it must be neutral. Only then the tenants will be able to customize it according to their choice.
4. Look into the landlord-tenant law:
The relationship between landlord and tenant is protected by the state and the country. These laws state issues like access to the property, security deposits, and notice periods for lease ends. There are also Acts to be noted while dealing with rentals. The most important Acts are the Fair Housing Act which is about the prevention of discrimination and the Fair Credit Reporting Act which is about complaining to the agencies about tenants regarding rent. Some of the laws that operate are Federal Housing Law and Federal Anti-discrimination law. Hence while researching these Laws and Acts, the landlords can get hold of their local housing authority and get to know how it works.
5. Property management plan:
There are property management companies that take care of all sorts of repairs and other maintenance of the house. These companies handle maintenance calls 24/7. Issues like a pipe leak or even a clogged toilet will be addressed by these people. It is just that payment has to be done to the company and this may be something extra for the landlord. Get in touch with a good home real estate Lincoln.
6. Setting rental policies and lease:
After researching the legal part of renting, the landlord can decide about the policies. Some of the important issues to addressing while framing a policy are as follows:
- Late rent: what will happen if there is a delay in rent payments and what will be the penalty for that?
- Breaking of lease: what is the process involved when the tenant wants to break the lease and wants to move out early.
- Pets: Should there be pets or no pets? Should there be a pet deposit?
- Common Area maintenance: Who will take care of the mowing or shoveling off the lawn?
- Illegal behaviors: The prohibition of certain illegal behavior like drug use. What will be the penalty for engaging in such prohibited behavior?
7. Finding applicants:
While searching for applicants, the house owners can list the house in online listing portals, websites, and yard signs. High-quality pictures can be taken and uploaded along with them. All the details of the rental home can be communicated to potential renters through this platform.
8. Screening of potential tenants:
The renters who are interested in the house will want to visit it and have a look at it. This is also a chance for the landlords to meet the renters. First, the renters are required to fill out an application form for which the application fee can be charged. Usually, some details from the applicants are asked. It includes the number of occupants, social security number to run a credit check, at least three references, confirmation of the renter’s employment.
9. Documenting the rental home before the renters move-in:
It is very important to take detailed photographs of the house before handing over the house to the renters. This is because once the lease is over, with the help of these photos, any damage done to the house can be identified. Later deductions can be done from the security deposits that the renters had given.
10. Safeguard the safety deposit:
The safety deposit given by the renters must be safeguarded and always must be kept available. So it can be put in a separate account where the interest can be earned. Some amount can be spent on any repairs. The records of the money and the interests must be documented properly.
