If you’re looking for a new house, it’s likely that you’ve considered selling your old home. However, while it’s only natural that you’d want to sell your previous house, you may want to consider renting it out.
Putting your home on the market can be expensive, time consuming, and even stressful. Plus, depending on the state of the housing market where you live, your house may be stuck in listing purgatory for quite some time.
But renting out your home creates an additional source of income for you and your family. And on average, most people between the ages of 25 and 35 still rent. In the US, that’s about 52 million people just waiting for the right rental property to come along. But before you become a lessor, you’ll want to take care of a few key things.
Determine your goals
First, decide exactly what your goals are for your property. Do you want to rent out your home until the housing market swings in your favor again? Or do you want to keep the house as a long-term, lucrative investment? Remember that regardless of your motivation, you’ll still be responsible for the house’s general upkeep.
About 10 percent of the rent you collect each year should go towards basic maintenance. Renting your home in the short term is unlikely to turn a profit. However, if you decide to make this a long-term move, you’ll benefit from tax breaks and give the home time to build equity.
Conduct some market research
Before determining the amount of rent you’d like to charge, get an appraisal done on your home. A full appraisal completed by a professional can tell you the rent prices of similar homes in your area, as well as their market values.
Having this kind of information on hand will be advantageous if a potential tenant tries to negotiate your proposed rate down. Also research whether or not local competitors “sweeten the deal” by offering bundled utilities. Offering this kind of deal may be worth it for you for the tax breaks alone, but it may also attract additional lessees.
Invest in capital improvements
Prior to having your home appraised, you’ll want to invest in a few improvements to your home. From repainting the interior to recarpeting the living spaces to installing new cabinets, there are endless small changes you can make to the interior of your home that will attract (and keep) good tenants.
And don’t forget the exterior. Consider installing Everdrain™ panels to your home’s roof. This kind of fastener panel prevents your home from being exposed to ice or snow shedding. If your home features a deck, you should also consider reaching out to a PVC deck installer.
Keeping your home in good condition while it’s tenant-occupied can be expensive and time consuming. A PVC deck won’t need to be restained, sanded, or sealed. And it can stay in good condition for years without you having to worry about it.
Property management, or no?
If you’re a busy professional or a recent retiree, you may want to hire a property manager. Though this will be an added cost, the benefits are numerous.
A good property manager makes sure the rent is paid on time, decreases tenant turnover, and takes care of any necessary repairs and changes. Plus, they’ll stay up-to-date on tenants’ rights and associated laws, so you don’t have to.
Find the right tenants
Finding the right tenants is the most important aspect of renting out your home. Even if you’ve completed remodeled your home, perfectly aligned your goals, and had your home appraised and insured, if you don’t have the ideal tenants, it’s all for naught.
If you’ve decided to manage the arduous task of finding your tenants yourself, consider the benefits of using an online rental application. This online resource can help you keep track of tenants in one easy-to-use place. Online applications store tenant contact information, references, income and employment history, and any pet preferences.
Plus, online applications can be easily accessed from your phone. So if you’re meeting a potential tenant for a tour of your home, you can quickly review their application on your way to the walk-through.