If you’re thinking about renting out your property, how can you make this happen efficiently and properly? It’s quite an involved process if you’re going to make a success of it, but it can be done, especially if you follow these tips.
Renovate and improve the place
As a landlord, you’re obligated to offer potential tenants a safe, secure and pleasant home. Your city or state will have minimum standards and regulations and you’ll have to come up to code before you rent for the first time.
It’s not just about the legal side, though. If your home looks great and feels safe, it’s more likely to attract tenants, keep them, and let you charge a worthwhile rental fee. Here are few pointers to get you started:
- A clean home is a popular home – the cleaner it is, the more likely it is someone will want to live in it;
- paint all the rooms;
- remove any valuable paintings, mirrors, light fittings and so on – many people won’t want to move into your home with a young family if they’re worried about smashing your heirlooms;
- fireproof your home as much as possible – make sure the wiring is safe, install smoke detectors and provide plenty of fire extinguishers, as well as signs that explain how to use them;
- insist on a no-smoking policy;
- examine your plumbing and install low-flow faucets, toilets and showerheads to cut down on water costs, and
- clean your chimney if you have one.
Change your status
Call your mortgage provider to let them know you’re no longer living in the property – it may need to grant permission and charge a fee. You also need to change the status with your local authority.
Change your insurance
You must have Landlord Property Insurance for your property. This type of insurance is different – and more expensive – than your regular homeowner policy.
Choose a property manager
Are you going to manage the property by yourself or use a property management service? You’ll save money by doing it yourself, but you’ll spend a lot of time on it, as well as feeling a lot of stress. Most management services charge 10% commission and as they take on everything from repairs to vetting potential tenants, you’ll probably feel it’s worth the fee.
Decide how much the rent is
Whatever you charge for rent, most experienced landlords suggest that you put away 20-25% of the monthly rent for repairs, renovations and void periods when the property is empty. It might be tempting to keep as much as you can for yourself, but if the roof leaks and you can’t afford to fix it, how will you find a new tenant?
One final word
Being a landlord can be very rewarding, financially as well as personally, especially if you get lucky and find great tenants. However, it does come with a certain amount of stress and overhead expenses, even if you go with a property management company, so ask yourself if this is something you can cope with on a long-term basis.