Renting out your house is always a great idea to make an income. There can be several reasons for turning your house into a rental property. You might want to move to a new place or sell it, but market rates are not reasonable, so in such cases renting out the house is a better option instead of giving it out at a low price. Here we have mentioned a guide about how you can turn your home into a rental property.
Check Homeowner Association
Two crucial factors to consider before shifting to another place are insurance policy and homeowner associations.
Varying policies depend on the type of mortgage loan. According to some policies, you have to spend a specific time period in a property before you transition it into a rental property. If you least out that property before that time limit, it might be considered a fraud. To avoid dealing with inquiries afterwards, it is essential to be aware of all the policies.
Some localities are administered by homeowner associations. Some associations limit the number of houses being rented. It is essential to check the policies before you leas out your property to avoid violation of any rules of the neighborhood. Generally, such associations do not allow rental houses after a specific number. However, you can still seek help in case of emergency, i.e., you are going through some financial crisis, or you want to move to another house immediately.
Involve a Lawyer
Your lawyer’s involvement is also essential while changing your house into a rental property. You need to get answers to the following questions:
- Your Liability
- Is the insurance policy enough?
- Is LLC is required to secure your finances?
You can go to your lawyer for leasing help. Following are some of the factors that your attorney can help you with:
- They can prepare a personalized lease agreement formulated on the policies you want your tenants to follow.
- You can ask them to formulate the documentations-applications or others. This way, you can rest assured that everything will be according to the rules and policies.
Do your Research
Research can take you a long way in any business. When you want to leas out your house, it is essential to perform in-depth research about other rental properties in the market. As people like to follow trends, going in line with the market trends will help you to attract good tenants.
Remodel your House
There is a difference between a regular house and a rental property. There will be specific changes you will need to make while giving your house on lease. There are following some of the ways to remodel your house:
- Modernize the kitchen by investing in new cabinets and countertops. You can also refurnish the oven, refrigerator, dishwasher and microwave.
- Reform the bathroom by converting your bathtub into a walk-in shower. You can also install new shelves to increase the storage.
- You should plant new flowers, paint the garden walls, or trim the already existing plants to upgrade the outside of the building.
- You can refurbish the flooring by installing hardwood, as it gives a modern and aesthetic look to the house.
- Modernize the paint to match it with the furniture. You can also allow the tenants to personalize it according to their choice.
- Do minor fixings like fix taps, cabinet handles, or doorknobs
- You have a significant budget; adding more room might also be a good idea.
- Add modern facilities like high roofs, air conditioning, or parking etc.
Hire a Property Manager
Renting out your property might be an uphill task. You have to manage several things simultaneously, like going through the applications, deciding the house’s rent, and moving back and forth for tenant screening. In such cases, it is wise to hire a professional. Lamar G Property On Us is a great website to help your property management in South Florida. Our management team will do the hard work for you. Here are some of the services that you can enjoy with us:
- We will help you with rentals by advertising and bringing new tenants, settling and executing leases, and strengthening security dimensions.
- Fixing rental rates by researching market rates and calculating extra expenditures, expected depreciation, taxes, and profit goals.
- Attract long-term tenants by advertising in the best way possible, getting referrals from existing tenants, and elaborating everything regarding location and services.
Pros and Cons of Renting out your House
When you want to leave the place you have been living in for several years, you can just rent it out instead of leaving it abandoned. However, before doing it, you will want to know some of the pros and cons this business comes with. Here are following some of the factors to consider:
One of the advantages of renting out your house is as follows:
Owing a house that you can turn into a rental property is an excellent perk as a landlord. It can help you cover your mortgage. If you are getting an amount more than the mortgage you have to pay, that is a way to earn a significant profit.
Following are some of the challenges that you might have to face:
Screening tenants is not an easy task. If you mistakenly select the wrong tenant who does not pay rent on time or the one who violates the community rules, you might have to bear a significant loss in the business.
There are some risks involved in the real estate business. A landlord has to be ready to bear unexpected costs, including maintenance or others repairs.
A Huge Responsibility
Being a landlord is a huge responsibility. Sometimes it might take a toll on you if you have to manage several things simultaneously.
Everyone likes surprises. There are many ways one could surprise their tenant to make them feel at home. For instance, you could leave a welcome basket at the door, giving them discounts, hand-written cards, Sending birthday wishes with cards or chocolates, pay their utility bills, etc.
These little acts of kindness could go a long way. It makes a tenant feel that they are safe and they will have someone to contact in case of any problem.
Provide Advanced Amenities
Some tenants prefer living in a place with modern facilities. The best thing you could do is providing them with the facilities, like a central air conditioner, stainless steel appliances, or hardwood flooring, etc. They will also make a home-like environment for the tenant.
Renting out your house is not an easy task. If you are thinking of renting out your house, it is better to plan ahead of time. An attorney, property manager and real estate agent can help you make the right decisions.