Owning a rental property requires hard work, patience, and planning.
If you’ve entertained thoughts about renting out your home, you may be asking yourself a few questions: “Is it worth hanging on to this property?” “How will I feel about strangers moving into my home?” “Will my tenants be responsible?”
Owning a rental property can require hard work, patience, and planning. There’s the good to consider, like the potential to increase your income and build a steady cash flow. On the other hand, being a landlord may test your ability to deal with the unexpected, like emergency home repairs or unreliable renters.
Before you hand over the keys, here’s what you can do to make the rental process go smoother.
1. Research the market
Research the market in the neighborhood of your rental home to choose a rent amount that matches local rates while still helping you earn a profit. Consider the square footage and number of bedrooms and bathrooms.
You might also take into consideration any additions to the property and the age of the home. Don’t forget to factor in costs like pest control, lawn maintenance, and occasional home repairs.
2. Grace your home with curb appeal
To give your home a fresh look, rent a power washer, clean out the flower beds, and trim shrubs and low-hanging tree branches. Give your lawn a clean trim, your panels a new coat of paint, and your shutters a good cleaning.
3. Check to see if your prospective tenant is financially responsible
A credit check can offer insights into your applicant’s payment history and gives you a good idea if they’ll likely be a good or bad credit risk.
You may also want to consider hiring a reputable company that can perform a tenant screening on your potential occupants to find out if they’ve damaged previous rental properties or have a criminal record. You can also ask for referrals from past residences since this information won’t be included in a credit report.
4. Plan for financial emergencies
Renting comes with its own set of unexpected emergencies, from tenants suddenly vacating a property to their calling you on a Sunday about a broken water heater. These can be tough expenses to bear, and as a landlord, it will behoove you to set aside funds for such situations.
5. Get appropriate insurance coverage
There’s always the possibility that your tenants or one of their guests might have an accident or damage your property. You could also experience a loss of rental income due to an unforeseeable disaster. The proper insurance may cover these things along with legal fees if you end up taking your tenant to court.
For some, becoming a landlord is all about on-the-job training. It can be a challenge, but in the end, renting out your extra space can help you reap financial benefits.