Measures to Take Before Renting Out Your Property
Many people moving to a different city or to a new home consider renting out their old property instead of selling. Even though renting out your property is a great alternative (and depending on the situation may be a smarter move financially), it can nonetheless be a daunting endeavor.
What do you do? What steps should you take? First thing to remember is that this does not have to be a complicated or overwhelming task. Renting out your property is like opening a business. As long as you do careful research, your due diligence, and get all your ducks in a row, there is no reason why you cannot be a successful landlord.
The second important fact to remember is that becoming a landlord is becoming responsible for the well-being, health and comfort of your tenants. This is not a task which can be taken lightly. At best your tenants will be unhappy and leave, at worst they will take you to court.
Either way, it is not a pleasant scenario.
Before you start the process of renting out your property, ask yourself the following questions:
What are the financial steps that I need to take?
The two key things to do financially are:
- Speak to your bank or mortgage lender and ensure that you are in a position to rent out your property, and that your mortgage allows it.
- Once you have received the go ahead from the bank, change your own (homeowners) insurance to that of rental home insurance. This is extremely important as rental insurance protects the rights of both the tenant and the landlord. Make sure you understand in-depth the differences between the two insurances.
The goal is to not have any unpleasant financial surprises along your landlord journey.
What kind of maintenance is needed to make my home attractive and rentable?
- Update and modernize your home on the inside and outside. You will be surprised at how much you can accomplish with a fresh coat of paint, a thorough clean and some trimming and tidying of the lawns. If you have some spare cash, you can also replace some outdated appliances to give your home a shiny, modernized face-lift. Here are some great ideas on how to give your home that extra oomph.
- Make sure to get your home inspected; is it up to code? Are there any serious health hazards which need to be addressed? A common thing which is often overlooked is the quality of the indoor air and this is where furnace filters come in. It is recommended that filters be changed regularly as they help to provide cleaner, fresher air inside your house; creating a nice and healthy environment. The Health House Program recommends using 3M air filters,
The goal should be to infuse your home with warmth, appeal, cleanliness and good hygiene. Do some research to uncover further details on how to create a healthier environment in your home.
What are my criteria when looking for a tenant and establishing rent?
- Decide on what kind of tenants you are looking for.
- Are you targeting families with children, older couples, students or single people with no pets?
- Are you looking for short-term or long-term tenants?
Look at the laws in your neighborhood or condo association, what are the rules and restrictions (if any)? Once you have these facts, you will be able to establish your criteria accordingly.
- Next, how do you determine how much rent you should charge? You obviously want to make some money but at the same time it should be affordable for your target population.How do you come up with the magic number?
- Look at what your own monthly expenses such as utility bills, maintenance fees for any special amenities such as a pool, cable tv etc. are;
- Weigh the pros and cons of your property and the advantages of your neighborhood, ie. is it close to a highway? A school?
- Do some comparative research on other similar rental properties.
A combination of all these factors should help you settle on an amount.
The end goal here is to have good tenants and enter into a profitable relationship for everyone involved.
Will you be around / have the ability to take care of any problems?
Renting out your property does not end at signing on the dotted line. As the landlord it is your responsibility to ensure that everything is always up to date and any sudden problems such as plumbing or electrical issues get resolved right away. You need to decide if you are handy enough and available enough to tackle any problems that may crop up. If not, you need to look at hiring someone to manage your property.
Renting Out Your Property
This too will require a good deal of research as you want to find someone who is reliable, capable and knowledgeable.
The goal is to treat your tenants the way you would want to be treated. You would not want to go a day without electricity, they should not have to either.
Now that you have answered these questions and have taken steps to address these measures, you are ready to start looking for your perfect tenants.
Happy hunting!
Category: Housing, Real Estate
