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Renting your house can be a great way to earn extra cash. It can also help you downsize your current living space. However, it comes with responsibilities, such as screening tenants and complying with government codes. Here is a guide on how to rent out your property.

Renting your house can be a great way to earn extra cash. It can also help you downsize your current living space. However, it comes with responsibilities, such as screening tenants and complying with government codes. Here is a guide on how to rent out your property.

 

The Benefits of Renting Out a House

Increased cash flow is one of the most common reasons people lease their homes. This money can help cover your expenses. However, that’s not the only benefit. Here are some others to consider.

Greater Security

Some people need to relocate for work or inherit a family home. If you have an empty house, renting it out can be a good option. Vacant homes are often subject to vandalism or squatters. 

Leasing your home can give you better peace of mind knowing that tenets are maintaining it.

More Flexibility to Sell When You’re Ready

Selling your home is a big decision. You want to ensure you get the most out of your investment. This largely depends on current market conditions. Renting your property gives you the flexibility to sell when the time is right. It also allows you the freedom to look at different residences before making your move.

The Option to Move Back

Another perk of leasing your residence is that you can move back any time. If you have to relocate for work temporarily, renting allows you to keep your space. Just be sure to communicate with your tenants before returning home.

Property Value Appreciation

Your home’s value is likely to grow over time. Renting allows you to hold on to your house and sell when you can make the most profit. Do some research to figure out the potential appreciation value of your residence.

 

How to Market Your Home

 

 

When renting out a property, you want to make sure you advertise it effectively. Here are some ways you can help spread the word.

Focus on Prominent Features

Think about what features stand out the most in your home. Do you have hardwood flooring or updated appliances? Make these items a selling point when marketing your property. Here are some other things to consider highlighting:

  • Granite countertops or slate roofs
  • Stainless steel appliances
  • Maple and other hardwood features, like floors
  • Vaulted ceilings and skylights

Take Photographs

To spread the word about your residence, take pictures of the interior and exterior. For your outdoor areas, emphasize open space. Also, keep your lawn maintained by trimming your bushes and mowing your yard.

To showcase your indoor spaces, open curtains to let light in and highlight unique features, such as a fireplace.

Hold Virtual Tours

Potential renters can view your property from the convenience of their own space. It also allows you to attract renters who currently live farther away. Consider adding music or text to engage viewers. Another good idea is to make photos available to print.

Create Print Advertising

Signs are a great way to grab people’s attention and encourage them to contact you. Put up signs in your yard and see if your neighbors will allow you to put them on their lawn as well. They should include the cell phone number you want people to contact.

You can also advertise your house in the local newspaper to reach a wider audience.

Have an Open House 

Open houses are one of the most common ways potential renters search for properties. This can allow you to interact with potential tenants and highlight key features of your home. Be sure to advertise your open house schedule online and through print publications.

 

What You Need to Do Before Renting Out Your Property

Before you can start leasing out your residence, you need to do some background research. Here are some of the steps you need to take.

Understand Government Laws and Regulations

There are local zoning laws plus state and federal laws you must abide by to become a landlord.

The Fair Housing Act and the Fair Credit Reporting Act state that you must obtain permission before running a credit check. There are also regulations to ensure your rental property is safe and habitable for your residents. Be sure to look up all the local laws before you start looking for tenants.

Get Landlord Insurance

There are two relevant types of insurance — liability protection and property insurance. You want to invest in these to protect against financial losses.

Property insurance usually covers you if natural elements impact your exterior structure. If a tenant is injured, then liability protection will cover this. You typically won’t have to pay a deductible for this type of claim.

Figure Out How Much You Want to Charge

You want to rent at a competitive price. Consider looking at rental properties in your area to see what they charge. You can raise the price if you have valued amenities such as a washer and dryer.

Just be sure your price accurately represents the condition of your space. 

Take Out Landlord Deductions

You may qualify for certain property deductions. As a landlord, you can subtract interest paid on the mortgage or other types of loans you took out to buy or upgrade your house. You can also deduct any credit card interest paid on your rental expenses. This can lower your overall tax liability.

Be Aware of Rental Property Depreciation

You are likely to qualify for a deprecation tax deduction. Find this number by dividing the property price by its useful lifespan. An appraisal agent can help you with this. Taking this step could potentially save you thousands of dollars a year.

Write Your Rental Policies and Lease

Once you have done some background research on rental policies, it’s time to write up your lease. You want to determine which policies are essential to you. Consider addressing the following topics:

  • Do you want a pet policy?
  • How will you divide up common-area responsibilities?
  • What type of behavior is acceptable?
  • How will you handle late fees and lease breakage?

 

How to Screen Potential Tenants

You want to ensure you rent your property to people you feel comfortable with and trust. This is why it’s important to learn more about your potential tenants.

An excellent place to start is checking their credit history. Make sure you obtain their permission first, as stated under the Fair Credit Reporting Act. If they have a good credit score, it shows they are reliable with paying their bills. This can assure you they will pay rent on time.

Another thing you can do is search public records to see if any potential tenants have a criminal history record. This can help ensure you feel safe leaving your home with them. You also want to learn a little more about the potential renter’s expectations and lifestyle.

Here are some questions to ask them before they move in:

  • What date would you like to move in? Make sure you’re on the same page when it comes to move-in day. It also ensures you have the space ready for them in time.
  • Do you have pets? This is good to know if you or any other tenants have pet allergies. You also may need to make your home more pet-friendly before they move in.
  • How many people will live in the unit? You want to know ahead of time how many people are moving in, so you have enough space and amenities available for everyone. It can also help you better budget your finances.
  • How many people living with you smoke? This is good to know if smoking is a deal-breaker for you. Knowing this information can also allow you to set up boundaries, such as designated smoking areas, ahead of time.
  • What is your monthly income? You want to ask this question to get a rough estimate of their budget. It can also give insight into whether or not they will be able to pay rent on time.

 

How to Rent Out a Property

Once you’ve selected your potential tenants, you can start the rental process. Here are some tips to get you started.

Check With Your Home Association

You want to verify with your homeowner’s association that there aren’t any restrictions for renting out your home. For example, some associations only allow for a certain percentage of properties in the neighborhood to be used as rentals. You can make sure you’re staying up to code by figuring out this information ahead of time.

Secure the Necessary Permits

To operate your rental property, you need to obtain the required permits. This process usually involves an inspector coming to your house to ensure there aren’t any safety or public health hazards. They will then give you a report listing any changes or repairs that must be made.

Prepare Your Property

If you have a smaller space, you may need to add additional doors to close off parts of your house for renters. 

To ensure your house attracts renters, you want to have upgraded features. Start small and consider adding a fresh coat of paint. To add more value, also think about renovating more frequently used spaces, such as the bathroom. 

Along with upgrades, consider making repairs to your electrical or plumbing system. These systems must be working correctly for your renters.

Add a Laundry Unit

Another important thing to consider is creating a laundry space for your tenants. You will need to provide a washer and dryer. If your appliances are outdated, consider adding energy-efficient models when you upgrade.

High-efficiency washers are a good choice. To filter the water from your machines, consider investing in a drain trough. They are easy to clean and reduce plumbing issues for tenants.

Organize Your Garage

You’ll want to make sure your garage is available for potential renters to use. Many people like to keep their cars protected from natural elements. Consider these tips to keep your garage space functional and clutter-free:

  • Select a time to organize your garage: Find a time that fits into your schedule. Make sure to be realistic about how long the project will take.
  • Sort items into groups: You will want to divide them into keep, donate, and toss piles. When considering what to throw out, think about how often you use them.
  • Split the area into zones: Come up with categories for each section and place items into their respective compartments. This will help you know where things are if you ever need to access them in a hurry.
  • Brainstorm storage ideas: Maximizing space can help entice renters. Consider using plastic storage containers, built-in cabinets, and additional shelving to increase your storage capacity.

 

Keep Up With Maintenance

Maintaining a rental property involves time and effort. You need to ensure that appliances work correctly and your tenants feel safe. To keep up with regular maintenance of your rental, consider doing these tasks regularly:

  • Exterminate monthly: This will ensure you keep away unwanted rodents and insects.
  • Check for water damage or leaks: Catching signs of leaks early helps reduce mold growth and reduce long-term property damage.
  • Examine shower caulking and grout between tiles: Over time, the grout between your tiles can crack, and the caulk can loosen, causing water to leak through.
  • Test smoke detectors monthly: Make sure your smoke detectors are working properly to ensure you are prepared for a fire emergency.

Be Prepared for the Construction Process

If you’re subdividing your home, you want to ensure you follow all the legal steps to divide your house into each section. Here are the steps you want to follow:

  1. Do your research: This includes understanding zoning rules, fees, and any development permits.
  2. Get assistance: You will need to seek guidance from surveyors, property lawyers, building designers, and urban planners.
  3. Draw up your plans and meet with your local council: Your chosen experts will draw up plans for your subdivision to be shared by the commission.
  4. Apply for a development proposal: Once the council has given you feedback, you can adjust accordingly and submit a proposal.
  5. Get approved and start construction: As soon as you get the approval, you can begin the construction process.

 

How to Successfully Rent Out Your Home

Leasing a property can be financially beneficial. It can also provide you with more flexibility when you decide to sell your house. Before you rent your residence, do some research on the laws and regulations for rental buildings and make any necessary upgrades.

When you’re ready to open up your home, consider following this guide on how to rent out your property successfully.

 

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