There are many reasons owners choose to rent out their home; for example, they have an investment property, they are moving in with a partner and don’t want to sell their home, or even travel or working in a new city or country – no matter the reason, renting out a home can be an opportunity to increase income.
Nevertheless, the job of a landlord brings unique challenges and requires regular communication with tenants, property maintenance, rent collection and so much more. These tips for renting out your home can help you optimize the return on your investment while avoiding some of the pitfalls of being a landlord.
Tenant Screening and Selection
Perhaps the most important thing you can do as a landlord to protect your property, maximize your income, and minimize headaches is careful tenant screening and selection. Choosing the wrong tenant puts you at risk of late or missed rent payments, damage to your property, and even lost income when a tenant vacates the property. Ideally, you want to choose a trustworthy tenant that will occupy your property for as long as you want to rent it.
Additionally, careful screening and selection can help you find a responsible tenant that will care for your property as though it were their own. Before renting your property do a credit check, gather references, and also ask for proof of income.
Know Your Rights
You need to know your rights, as well as tenants’ rights before you rent your property. Depending on your geographic location, there may be very specific local laws that outline the rights and responsibilities of all parties involved. These laws will often outline many of the terms in a rental or lease agreement as well as what you can and cannot do in case of conflict. It’s also worthwhile to discuss the rental legislation with your tenant so that you can be sure you’re both on the same page.
Protect Yourself
It is absolutely critical that you insure your rental property as a business asset and against liability or damage to the property. You should contact an insurance broker with experience insuring rental properties to find out the best way to protect your property, your investment, and yourself.
Consider Hiring a Professional
Being a landlord can be a full-time job.
For that reason, many homeowners choose to work with an experienced and qualified property manager so they can avoid the stress of managing their property alone. Depending on the property manager, you’ll likely pay about 10% of your monthly rental income for management services but you’ll also have peace of mind knowing that all the tasks associated with renting out your home is in the hands of a professional.
Property managers can do it all – advertise your property, select a tenant, negotiate and manage the lease, conduct property inspections and maintenance, and deal with conflict.
Property managers are a great resource for owners who do not have the time or skills to rent their home independently.