How to Prepare Your Home for Renting Out
If you want to increase cash flow or make good use of your property while you’re not living in it, renting it out can be a smart solution.
Before you add your property to the “for rent” section of the newspaper, it’s important to know how to rent out your home the right way.
Read on for some helpful tips about how to make your home rent ready for a new tenant.
Start with Your Finances
Before you can rent out your home to a tenant, know that the mortgage on your property must be current. Some lenders have specific rules about renting your home out. Homeowners with an FHA loan must live in the home for at least a year before renting, for example.
If you plan to purchase a home just for the purposes of renting it out, you should notify your lender of your intentions. In addition to the mortgage being paid up to date and current, there are some other things to keep in mind.
Potential landlords should have at least three months’ worth of expenses in savings. These savings should include all of your expenses and not just the mortgage payment. Be sure to allocate money for utility bills and a set amount for maintenance, too.
It’s crucial to have all of your finance in order before you rent out your home. Having money set aside will protect you in the case of nonpayment or if something breaks later and you need to repair it for your tenant.
In addition to your emergency savings, you may need to prepare a budget for marketing the property, and for small upgrades. Take a look at where you stand before you rent out the home so you feel confident and ready when the time comes.
How to Rent Out Your Home: Preparation
As a new landlord, it’s your responsibility to provide your tenant with a livable space. Start by decluttering your home and removing all of the furniture, artwork, and personal belongings.
Thoroughly clean the floors and carpets, and consider hiring a professional company to help. Many offer same day appointments so you can get this part of the prep process done quickly.
If needed, apply a fresh coat of paint to the walls (and don’t forget the bathroom). This simple step can do wonders for making the property look and feel clean and new.
Check your HVAC system to ensure that it’s working the way it should. Replace the air filter as needed and if you can, provide an extra filter or two for the new tenant.
Clean all of the windows, doors, and door handles. If anything is broken (a kitchen cabinet, for example), get it repaired before the tenant moves in. You should also verify that all of the appliances are in good working order and clean.
Finally, it’s always a good idea to spray for pests, even if you don’t think you have any. Taking small, preventative measures now could save you a lot of money later on pest control services.
Find a Great Tenant
Now that your finances and your property are prepped, it’s time to start looking for a tenant. If you can, consider hiring a professional property management company that can do most of the legwork for you.
In a perfect world, your tenant will always pay on time and never cause any damage to your home. It’s important to note that preventing 100% of damage is next to impossible so be prepared for a few minor issues here and there.
If you want to know how to rent out your home to a great tenant, start by vetting them. This means confirming the important things that make a renter reliable.
Start by performing a job verification to ensure they have steady employment, and ask for a copy of recent pay stubs to confirm. You should also ask about their rental history and get at least three past rental references whenever possible.
It’s not mandatory to perform a background check, but it’s definitely recommended. You should also inform the potential new tenant that you’ll need to run an official credit check.
The key to finding a good tenant is to market to people in your community. Spread the word by posting signs, placing ads in the local paper, and of course by posting the property information online.
Even with a beautiful rental and a wonderful tenant, your property isn’t ready to be rented without a good lease. Talk to a property management company in your area that understands your local tenant laws.
A typical lease should include the terms of the rental period, the amount of the deposit, the monthly rent amount, and when the rent is due. You should also include a clause about pets and whether a deposit will be required.
Make sure you add a detailed list of the utilities the tenant will be responsible for, too. Determine how many people are allowed to be on the lease and how many are allowed to live in the home by law.
You should also include information about doing maintenance checks and whether you’ll allowed access unannounced. When in doubt, talk to a real estate agent or property lawyer so that all of your legal bases are covered.
New Rental, New Income
Once you know how to rent out your home, you can experience the perks of being a landlord. With the right preparation and a great tenant, renting your home can be a wonderful way to get extra monthly income.
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