How to Rent Out Your House – Tips, Steps, Help Guide, Mistakes to Avoid: Renting out a house is a common practice of owners who want a little extra cash in their pockets. It is not the same as selling your home once and for all. If done right, it brings a periodic investment that can eclipse the value of the property itself! 3D floor plans, 3D exterior design renderings, are also important while you are listing your house or trying to get tenants.
But what does it take to rent out your home and maintain a consistent flow of income? You need to prepare yourself and your home before letting someone else stay there. Here are the necessary steps to take for renting out your home and tips to turn it into a decent source of income.
Rent Out Your House – Tips
1. Place an Accurate Rent Tag
The foremost step of renting out your home is determining the price. The rent amount is different from the house’s market value. As such, you need to figure out a fair amount to draw as house rent.
Setting the rent amount requires a careful and detailed examination of your home. But what if you do not know how much each feature of your home contributes to its value? It is a good idea to consult your Local Housing Authority for the answer to that question. They can help you in two important ways:
- The Local Housing Authority is the place to get accustomed to the laws of home renting. There are legal processes involved in house renting business, such as security deposits. You should know this information before setting a rent amount.
- You can get information regarding your neighborhood to figure out the value of living there. The homes in a single area have a baseline value to them. The worth of your home is above or below this base, depending on its condition. You can take the help of a knowledgeable individual from the housing authority to examine its value.
Once you have the number, you can market your house for tenants.
2. Search and Research Tenants
Marketing your house is simple in the digital age. You can set up an appealing profile of your home and raise it as a rent out prospect for tenants. But simply finding a tenant and have him/her stay in your home is far from the correct way of handling things.
You need information on your possible tenants to comply with the safety laws of house renting. An easy way to do this is with a generic application form that asks for details like:
- The tenant particulars
- Family members and their details
- Contact details of past landlords (if any)
- Current place of employment
- Contact details such as email and phone number
Once you have such information, do a thorough check on the life and character of the tenant through police reports and personal contact.
3. Set up Lease Rights and Insurance
Lease rights are the way to set the obligations between yourself and the tenant in terms of your property. It is the process to protect yourself and your property in future dealings by law. You can take the help of a law firm to set up this lease for you, which includes details such as:
- A leasing term
- Tenant details
- Rent period
- Living policies agreed between you and the tenant
- Security deposit details
- Terms of eviction
You need to set up an insurance policy to go with the lease document. It covers the alterations to the home as a result of the tenant’s actions during their stay.
4. Hire a Rental or Management Company
A rental company is a third party that deals with tenants for you. They do everything for you, from communication with the tenants to timely rent deposits. They also advise you on the rent possibilities of your home and market it to find possible tenants. Rental companies even cover the eviction process in case of violation of the rent terms.
These companies take a percentage of the rent as a cut. You have to watch for this amount when hiring their services.
Rent Out Your House makes a great second source of income. But it takes a consistent effort to maintain it. There are legal requirements as well as safety laws you must follow before you can rent out your home. You should take the help of professionals in the field to properly carry out these processes.
Mistakes to avoid when to Rent Out Your House
Just like any business venture out there, becoming a landlord or putting up a property for rent requires a learning curve. You might initially make a lot of mistakes when starting out because having a footing might take a while.
Luckily, many investors have gone ahead in the game and hàve experienced some of the pitfalls that are associated with renting out a property.
Provided below are some of the mistakes that you should avoid that have been made by most of the first time landlords.
- Placing the wrong rent price.
The price of your rented property must be on point. If your price is too high, there is every possibility your rented space would be vacant for a very long time. Too low price can also attract the wrong tenants and even lose amazing deals and profits.
You can employ the expertise of an experienced real estate agent or utilize similar properties so that your rent price can match recent local trends. You don’t have to dawdle into reducing your asking rent in a situation where your space is not rented for a long time. Reducing your rent by $25 cost lower than one month of a vacancy in the market.
- Improper screening of tenants.
You need to properly screen your tenants because you are entrusting your property to anyone you admit. You definitely don’t want to rush the vetting process in order to prevent another vacant week.
You need to establish an extensive procedure that will be utilized to vet the credit and background of your tenants. Ensure that the details such as employment, previous landlord, and other details provided by your prospective tenant is valid. This is important to make sure your tenant is law-abiding.
- Improper or no documentation.
It’s important to regard your rental property as a business even if it is just progressive passive income. You need to also ensure the same with your accounting practices. Ensure that all records of rental payments, maintenance, repairs and expenses of all of your property are kept properly and don’t forget to save all receipts as well.
You should also have copies of all interactions from emails, text messages, lease documents, addendums, faxes and so on because a legal issue can arise anytime where these documents would be very important.
- No communication with tenants.
As a landlord, it is very important to stay in touch with your tenants. Firstly, it will enable you to monitor the property entrusted to the tenant since it is linked to your personal income. This will also indicate to the tenant that you are active, caring and want them to enjoy the best experience. It will promote a good relationship between the landlord, tenant and the property and even prompt the good ones to remain longer.
- Delaying an eviction process.
As soon as a tenant starts paying late, they should be charged when paying their leasing fees. If the late payment also calls for an eviction, you need to do this as soon as possible. Also, you need to immediately reach out to an attorney or lawyer once issues start arising with your tenant.
- Taking lease terms with levity
If you developed a penalty or charge for late lease payment or the acquisition of pets, you need to endorse it. Once your tenants notice that you are being lax with the guidelines you establish, they will also do the same. You need to establish the standard that should be upheld in your property.
- Not adhering to local and state regulations.
It is your responsibility as a landlord to ensure that the property standards set by local and state codes are met. Neglecting your end during the legal bargains can be a basis for your tenant to violate any legal agreement or even result in your tenant filing a lawsuit that could result in compensation due to an injury or damage as a result of the negligence. Here you can check important landlord-tenant laws.
- Making unlawful inquiries.
You definitely want to avoid the possibility of a potential tenant filing a lawsuit against you for discrimination by making unlawful inquiries. The 1968 Civil Rights Act of Fair Housing states that a tenant’s application cannot be denied due to nationality, religion, sex, race, color, disability, marital or family status.
Above we have shared tips, mistakes to avoid while doing Rent Out Your House.